MANY consumers have unknowingly lost money when paying with credit or debit cards due to an unnoticed yet significant practice which is price rounding.
While rounding mechanisms for cash transactions are common since the one sen coin is no longer in circulation, it should not occur in digital payments, where the exact amount can be charged.
However, in many cases, consumers find that their final bill is still rounded up.
This may seem like just a couple of cents, but it is a quiet strategy that benefits retailers unfairly.
How much are consumers losing?
A simple calculation shows the impact:
If a loaf of bread costs RM1.98 but is rounded up to RM2.00 when paid with a credit card:
- The consumer loses RM0.02 per purchase.
- Over a year (365 days), this adds up to RM7.30 for one customer.
For large supermarkets handling 5,000 credit card transactions daily, the numbers become staggering:
- RM0.02 x 5,000 transactions = RM100 per day
- Per month: RM100 x 30 days = RM3,000
- Per year: RM3,000 x 12 months = RM36,500
If a nationwide chain processes 50,000 transactions daily, the extra profits from this "small" rounding practice could reach RM365,000 annually, a massive sum collected silently from unsuspecting consumers.
But do retailers ever lose out?
Some may argue that retailers occasionally have to round prices down, causing them to lose money. However, the reality is that these cases are rare, as most pricing strategies are designed to result in upward rounding, ensuring retailers gain more than they lose.
Is this legal?
No. The Consumer Protection Act 1999 (CPA 1999) explicitly prohibits misleading and unfair pricing practices.
- Section 14(1) of CPA 1999 states that providing misleading price information is illegal.
- Section 10(1) of CPA 1999 prohibits unfair trade practices, including hidden charges.
What should consumers do?
- Always check receipts after using credit or debit cards. If rounding has occurred, question the retailer.
- Report unfair rounding practices to the Domestic Trade and Cost of Living Ministry via their hotline 1-800-886-800 or their official platforms.
- Spread awareness—inform others so they are not unknowingly overcharged.
Two sen may seem insignificant, but when multiplied across thousands of transactions daily, the losses to consumers and the silent gains to retailers add up to hundreds of thousands of ringgit annually.
Consumers deserve transparency and fairness in pricing. The amount displayed should be the amount charged, no more, no less.
Zulkifli Bujang is a Bersatu Supreme Leadership Council Member.