California Mandated Nickel Rounding for Cash Sales
Retailers must now round cash transactions to the nearest five cents following new state legislation.
Updated on Oct. 1, 2026 in Retail
Live Poll
Do you support mandatory rounding of cash transactions to the nearest nickel at retail stores?
Governor Gavin Newsom signed the California Common Cents Act, known as AB 1793, requiring merchants to round cash payments to the nearest nickel. The change addresses persistent penny shortages that followed the U.S. Mint's decision to stop production.
Why it matters
The shift simplifies cash management for operators by eliminating the need to process pennies, which became increasingly scarce after federal production halted. This requires point-of-sale adjustments to ensure compliance with the mandatory rounding increments.
The California Common Cents Act mandates a standard 5-cent rounding increment for all cash transactions. This change responds to the supply gap created when the U.S. Mint ceased penny production in November 2025.
The players
Gavin Newsom
The Governor of California who signed AB 1793 into law.
U.S. Mint
The federal agency responsible for coin production that halted the manufacturing of pennies in 2025.
The details
Under AB 1793, merchants are required to round the final cash portion of a sale to the nearest nickel. Transactions ending in 1, 2, 6, or 7 cents must round down, while those ending in 3, 4, 8, or 9 cents must round up. Operators must update their point-of-sale systems to reflect these rounding rules automatically for cash payments.
Timeline
The U.S. Mint ended penny production in November 2025.
Governor Newsom signed the legislation on September 30, 2026.
Market Landscape
This legislation follows a growing trend of North American jurisdictions moving to eliminate low-denomination coins from circulation. The state action marks a departure from reliance on federal currency standards by implementing a mandatory rounding mechanism for local cash commerce.
Operators must update their cash handling procedures and point-of-sale software to reflect the required rounding logic. Review your current inventory of penny reserves and consult with an accountant to document the transition in your cash reconciliation processes.
The takeaway
The move to a nickel-based rounding system necessitates an immediate update to store-level accounting and payment software. Operators should track their remaining penny reserves and prepare for potential changes in daily cash drawer balancing procedures.
Further reading
For more updates on shifting regulatory requirements for store operations, visit our Retail section.
Source note: This article includes information reported by Bloombergtax.
Live Poll
Do you support mandatory rounding of cash transactions to the nearest nickel at retail stores?
