Arizona shoppers paying with crumpled bills instead of plastic are about to see their totals get a tiny makeover. Gov. Katie Hobbs signed a bill on Friday that lets businesses round cash purchases to the nearest five cents, a change aimed at easing a statewide penny shortage. The law tells stores to use a method known as "Swedish rounding" on the final total so tabs move up or down by just a cent or two instead of hinging on exact change. Electronic payments made by card or phone are not affected.
The measure adds section 44‑7952 to the Arizona Revised Statutes and requires sellers to apply Swedish rounding to a cash transaction's final total after taxes and fees are calculated. The new statute is spelled out in detail in the Arizona Legislature record, including the rounding grid: totals ending in 1 or 2 cents, and 6 or 7 cents, are rounded down, while amounts ending in 3, 4, 8 or 9 cents are rounded up. The law also bans alternative rounding schemes, so businesses may not adopt their own method.
Retailers must post a notice at the point of sale informing customers that "cash transactions are rounded to the nearest five‑cent increment," and the state can enforce the rule through warnings and civil penalties handled by its weights and measures unit. LegiScan tracks the measure's progress and reproduces the enforcement language. Supporters say the guardrails are meant to keep Arizona from turning into a checkout patchwork as coins get harder to find.
How rounding works at the register
Under Swedish rounding, the math looks simple at the counter. A $10.01 or $10.02 cash total becomes $10.00, while $10.03 or $10.04 rounds up to $10.05. The pattern repeats across every ten‑cent band. Because the rounding kicks in only after taxes and fees are fully calculated, sellers still compute sales tax on the original, unrounded amount. For most shoppers the change will be a penny or two, but lawmakers say using one clear system should make transactions more predictable.
Why lawmakers moved now
The change follows a national squeeze on pennies after the U.S. Treasury halted production of the one‑cent coin last year, leaving banks and some retailers scrambling to keep enough on hand. The Associated Press reported that minting each penny costs about 3.7 cents, a lopsided equation that has prompted states to set their own rounding rules as inventories dwindle.
Lawmakers and business reaction
Rep. Teresa Martinez, the bill's sponsor, told colleagues she had been quietly tracking which businesses still handed out pennies and which kept the extra cents, according to Axios. The bill cleared the House 52–1 and the Senate 28–1, per LegiScan, and Gov. Hobbs signed it Friday. A Senate floor amendment added an emergency clause so the law takes effect immediately, according to Arizona Legislature documents. A small number of lawmakers opposed the measure, Axios reported.
What shoppers should know
If you pay with a card or a phone wallet, nothing changes. The rounding rule is for cash only. Customers using bills and coins should expect tiny adjustments at checkout and will see a notice at the register explaining the new policy. Businesses will need to update point‑of‑sale signage and train staff on the updated routine.
Arizona's move joins a wave of state bills aimed at a post‑penny era. For now the math change is modest, but lawmakers say a clear rulebook should reduce confusion at the counter and protect businesses from simply running out of coins.
