It’s interesting, at least.

Gas prices is a good question. I’m still weary over how gas prices fluctuate based on the price of oil. I bet they could come up with a system where .01 and .02 increases just stay the same and .03 and .04 round up. Thus, we’d have few gas changes compared to where they seem to change multiple times daily now, usually over just a penny or two.

Finally, I think I’ve gotten you cleared now, so all your comments should go through immediately as long as you don’t do no@no.com =)

Wal-Mart did not get to be the way it is by not managing pennies. If you eliminate the pennies, it now has to think in terms of nickels. Imagine what Wal-Mart can do to the world with it starts thinking 5 times harder.

I agree with your logic of rounding up and down equally, I think I mentioned it towards the end of my comment. If not, I did intend to. It’s the most logical way of performing the adjustment. I just prefered the worst case scenario route. The info came from http://www.walmartfacts.com and a couple google searches.

But then what happens to gas prices with no pennies? Would it then jump a nickel with every increase, even if it would have only jumped .03 cents when there were pennies?

Your initial math had them gaining $8 billion a year off the rounding up alone, after offsetting for the rounding down prices. With my math, they break even, but again, let’s assume there were more items priced at “.99″ than “.96″, so they made an extra $2 billion or so. Sounds good for Wal-Mart, but now you’re assuming Wal-Mart is not running into any costs of their own. That added profit they make is offset by added price increases in raw products by manufacturers. Again, I’ve got no numbers (and wherever the hell you’re getting your numbers, do share), but you’ve got to remember that Wal-Mart is going to be subject to new prices as well beyond just the old “raise prices, lower wages.”

But even looking at your math, you had them gaining $8 billion dollars off prices and losing $45 million off wages if they rounded up. Big deal! As I see it, if they are making a few extra billion, they can certainly afford the $45 million “dent” in their labor side. Even with my cautious math, I gave them a $2 billion profit, which could still more than account for the added labor cost. I highly doubt they would run the risk of a media backlash against their blatant corporate greed just to squeeze a measly $67 million when they are already making a profit from the switch.

It’s not my fault a company chooses to round prices up, yet round salaries down when they don’t have to. That’s an entirely different debate centered around business ethics and morals.

So now we have a product that has risen .03 cents in cost. Let’s use a trip an average trip to Wal-Mart.

Everyday more than 176 million people visit a Wal-Mart, Sam’s Club, Supercenter, etc. If Wal-Mart raised the price of thier products just .03 cents to an even dollar amount that would result in $5,280,000 added profit to Wal-Mart everyday. $5,280,000 a day x 363 days a year (I’m excluding Christmas and Easter which are much lighter than average shopping days) = $1,916,640,000.

You just made Wal-Mart an extra $2 billion dollars a year. And thats assuming each of those 176 million people only bought one item. I can’t find any info on what the average number of items purchased on each ticket is for Wal-Mart but I think we can safely assume it can be at least 10 items (but I’m assuming it be a significantly larger number seeing as how many items a family purchases for groceries). Even so, if the average number of items purchased for each customer was 10 items. You’ve just made Wal-Mart an extra $20 billion dollars a year.

Now if Wal-Mart reduced their prices by just .02 cents and a rounded .95 price ending, then the company loses $3.5 million per day. $3.5 million x 363 days = $1.2 billion dollars per year that Wal-Mart would lose each year. If each person bought an average of 10 items then they have lost $12 billion each year.

Now that’s just one company. Imagine if every company in the United States increased their prices by only a couple of pennies. Look at the extra money it makes them.

Then we as consumers won’t complain because it’s only a couple of pennies and we wouldn’t notice it.

Or would we?

Now take into consideration the wages. The average Wal-Mart wage is $9.68/hour. Wages would either have to be increased to bring the average wage to $9.70 or decreased to $9.65. There are 1.8 million Wal-Mart associates. Raising the average wage .02 cents would cost the company $36,000 per hour. (That is of course inflated because there are not 1.8 million people working 24 hours a day). But lets assume that 20% of employees are full time (40 hours per week). That’s 360,000 employees. A .02 cent wage increase cost Wal-Mart $7,200 per hour for these employees. $7,200 x 2080 hours (the # of hours in a 40 hour work week for a year) = $14,976,000 a year. Raising the wages of just 20% of it’s staff cost them almost $15 million dollars.

Assuming the the rest of the staff works an average of 20 hours per week then you are looking at an extra $28,800 per hour. (1,440,000 x .02). Now then, $28,000 x 1040 (20 hour work week for a year) = $29,952,000.

For all of it’s employees Wal-Mart has just spent an extra $45 million dollars per year just off a .02 cent pay raise.

If they dropped the average wage to $9.65/hour they would cut $67,392,000 annually from their employees paychecks (using the above information).

Because you wanted to get rid of the penny you have made Wal-Mart an extra $20 billion dollars a year and taken away $67 million dollars from the people that keep the company running.

Imagine what this does to the entire population if you spread it out over all the business that don’t price products in non penny forming prices. You have essentially taken perhaps billions of dollars out of the hard earned paychecks of the people in this country.

I say we keep the penny. Either that or you reimburse me the money it’s going to cost me in the end. Which is $116.40 per year, roughly. $62.40 a year in lost wages, and $54 dollars per year in increased grocery bills at Wal-Mart. That’s not even including all the other things I buy at places other than Wal-Mart. You probably cost me an easy $500 a year because pennies annoy you.

There’s a million ways to do the math to say whatever you want it to say. You can even say that the prices remain the same as they already are and when the total rings out to be $126.96 then the bill just get rounded up to $127. Thus costing me an extra 4 cents for no reason.

Bottom line is, not all things can be done at profitable level. Some things just are unprofitable. It’s all the other things that are profitable that make up for the losses you take. When you buy your new computer at Best Buy, Best Buy is actually losing money on the computer. There just isn’t a mark up on computers. Computers themselves are just not proftable. They make up that loss when you buy a USB cable for $30 dollars when they only payed $3 for it.