AB 1793 (Californians for Common Cents Act) requires merchants engaged in face-to-face, in-person sales in California to calculate a transaction’s total and, when the customer pays with U.S. coins or currency, round the final cent amount to the nearest five cents using a specified rule set. The bill defines "legal tender" as U.S. coins and currency, exempts very small totals and non-cash payments, and makes rounding gains or losses nontaxable.
This is operational legislation, not a pricing mandate: it changes checkout math for cash transactions and pushes implementation details to the Department of Financial Protection and Innovation. The practical effects include changes to point-of-sale software, cashier procedures, reconciliations, and customer-facing receipts — and it shifts small-dollar outcomes between customers and merchants depending on rounding direction.
At a Glance
What It Does
The bill requires an in-person merchant to compute the purchase total (after discounts and taxes) and, if the customer pays with U.S. coins or currency, round that total to the nearest amount divisible by five cents using explicit cent-ending rules (certain endings round down, others round up). It excludes totals of four cents or less and all non-cash payment methods.
Who It Affects
In-person retailers and service providers that accept cash, point-of-sale vendors that supply or maintain checkout systems, cash-handling banks and armored services, and consumers who choose to pay with cash. It does not apply to card, electronic, or other non-cash payments.
Why It Matters
The bill reduces the operational need for pennies at retail while creating a uniform rounding rule statewide; that simplifies some cash handling but also reallocates very small dollar amounts via rounding. Compliance will require software changes, training, and potentially new regulatory guidance from the state regulator on exemptions and edge cases.
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What This Bill Actually Does
AB 1793 instructs merchants who sell goods or services in person to first compute the transaction total by adding item prices, applying discounts, and then adding applicable taxes in the ordinary way. Once the total is computed, the law applies a cent-ending rule only if the customer pays with U.S. coins or currency: totals ending in 0 or 5 require no change; totals ending in 1, 2, 6, or 7 cents are rounded down to the next nickel; totals ending in 3, 4, 8, or 9 cents are rounded up to the next nickel.
Totals of four cents or less are explicitly excluded from rounding, and non-cash payments (cards, electronic transfers, checks, money orders, and similar instruments) are also exempt.
The statute clarifies that any gains or losses produced by rounding are not themselves subject to state or local taxation. The bill also gives the Commissioner of Financial Protection and Innovation authority to issue regulations to implement the law, including authorizing exemptions or exclusions for classes of transactions or merchants.
The text contains no dedicated enforcement provision, civil penalties, or criminal sanctions; it relies on the regulator to flesh out implementation details by rulemaking.Operationally, the law forces merchants and POS vendors to make a small but concrete change: systems must identify when payment is by cash at the time of finalizing the sale and apply the rounding rule to the pre-payment total. The bill does not require a separate receipt line labeled for rounding, nor does it direct how to treat returns, partial refunds, split tenders, or cash-back scenarios — areas the regulator's forthcoming rules will likely address.
Finally, because the statute limits coverage to face-to-face, in-person sales, online retailers and mail-order merchants are out of scope.
The Five Things You Need to Know
The bill applies only to face-to-face, in-person merchants; online, mail-order, and other non-face-to-face sales are excluded.
It defines "legal tender" as all United States coins and currency and applies rounding only when the customer pays with those coins/currency.
Rounding rules: totals ending in 1, 2, 6, or 7 cents are rounded down to the nearest 5 cents; totals ending in 3, 4, 8, or 9 cents are rounded up to the nearest 5 cents; totals of 4 cents or less are exempt.
Non-cash payments (credit/debit cards, electronic transfers, checks, money orders, and similar instruments) are exempt from the rounding requirement.
The Commissioner of Financial Protection and Innovation may promulgate implementing regulations and authorize exemptions; the bill also states that rounding gains or losses are not subject to state or local tax.
Section-by-Section Breakdown
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Short title: Californians for Common Cents Act
This section names the statute. Practically, the short title signals legislative intent to create a statewide framework for cent rounding; it also frames future agency regulations as implementing this act rather than separate pilot programs or local ordinances.
Key definitions: merchant and legal tender
The bill limits "merchant" to persons, corporations, or partnerships doing face-to-face, in-person sales, which excludes e-commerce and remote transactions; that scope affects which businesses must change POS logic. "Legal tender" is narrowly defined as U.S. coins and currency, so any rounding obligation triggers only when physical cash is used to pay.
Computation and rounding rules, and transaction exceptions
This is the operative provision. Merchants must compute the total (subtract discounts, then add applicable taxes) and then apply the legislated rounding matrix to the final cent amount for cash-paying customers. The statute exempts totals of four cents or less and all non-cash payment types from rounding. It also contains a tax rule: state or local taxes do not apply to amounts gained or lost through rounding; that simplifies reporting but raises questions about bookkeeping and retail tax remittances.
Regulatory authority for implementation and exemptions
The Commissioner of Financial Protection and Innovation receives broad rulemaking authority to implement the act and may authorize exemptions or exclusions. Because the statutory language leaves multiple operational details open (receipts, refunds, split tenders, signage, enforcement), the implementing regulations will determine how prescriptive the regime becomes and which transaction classes, if any, are carved out.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Consumers who primarily use cash: They avoid cent-by-cent change and the physical burden of pennies; for small purchases this simplifies checkout and may speed service.
- In-person merchants with heavy cash volume: They reduce the need to stock and process pennies, potentially lowering coin-handling costs and simplifying cash drawers and deposits.
- Point-of-sale vendors and integrators (potentially): Opportunity to sell or update software to manage rounding logic and reporting, creating a revenue stream for implementation services.
- State tax administrators: The statute’s explicit carve-out that rounding gains/losses are not taxable reduces ambiguity in tax remittance for trivial rounding differences and may lessen audit friction.
Who Bears the Cost
- Cash-paying consumers on aggregate: Because some cent endings round up, cash customers may pay marginally more over many transactions compared with exact cent totals.
- Merchants and POS vendors: They must update software, adjust reconciliation procedures, train staff, and possibly reprint receipts or signage — one-time and ongoing compliance costs.
- Banks and armored carriers or coin-processing services: Changes in coin flows could shift processing costs and logistics, especially for businesses that previously accumulated pennies.
- State regulator (DFPI) and implementing agencies: The Commissioner must draft regulations and potentially oversee compliance without express funding in the bill, creating an administrative burden.
Key Issues
The Core Tension
The central tension is between simplifying cash handling by eliminating penny-level change (favoring operational efficiency and lower coin use) and the fairness and administrative questions created by asymmetric rounding outcomes and open implementation details: the law solves the problem of pennies but shifts small monetary outcomes and significant operational burdens onto merchants, consumers, and regulators without prescribing how to manage refunds, receipts, and enforcement.
The bill resolves the immediate question of how to treat pennies at checkout by imposing a statewide rounding rule, but it leaves major implementation details unresolved. It does not specify enforcement mechanisms, civil penalties, or private-rights-of-action, so compliance incentives will depend largely on agency regulation and market pressure.
The absence of explicit rules for refunds, returns, split tenders, or how to reflect rounding on receipts creates operational uncertainty that will force businesses to wait for regulatory guidance or make ad hoc decisions with possible consumer friction.
There is an equity dimension: rounding to the nearest nickel is neutral in expectation only if half the eligible totals round up and half round down; real-world purchase distributions may skew toward one direction depending on pricing strategies, potentially creating a small but systematic transfer between merchants and cash payers. The bill’s exemption of non-cash payments preserves exact accounting for card and electronic users but also creates a two-tier checkout outcome that could complicate customer expectations and lead to complaints or inconsistent practices across stores.
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