Here's what the Common Cents Act means for businesses, consumers

The U.S. House of Representatives has passed the Common Cents Act, a legislative response to the ongoing phase-out of the penny. The bill, now heading to the Senate, aims to establish clear rounding guidelines for cash transactions, offering businesses and consumers a framework to follow when exact change is unavailable.

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a win for restaurant operators who have been contending with the phase out of the penny.

Currently, businesses face potential litigation if they cannot provide exact change, even when rounding in a customer's favor. Business advocacy groups, such as the National Restaurant Association, have praised the act's passage. Sean Kennedy, chief advocacy officer for the association, highlighted the legal liability businesses face when a customer pays with cash and the register lacks pennies for exact change.

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When a customer pays in cash and a register doesn't have a penny available to give exact change, it can create a legal liability for businesses.

The Common Cents Act directs the Treasury to cease minting pennies and mandates that cash transactions be rounded to the nearest five cents. While pennies will retain their value, the practical effect is a shift away from exact cent calculations. For example, a $10.02 purchase would round down to $10, and a $10.04 charge would round up to $10.05.

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We are asking for a national rounding standard. What most businesses do is round to the nearest nickel, either up and down, which sounds like common sense.

Kennedy noted that the penny's phase-out has been challenging, with some regions experiencing shortages while others have surpluses. He emphasized the need for a national rounding standard, stating that most businesses already round to the nearest nickel. The legislation provides the legal certainty sought by businesses to minimize customer and operational frustration. While rounding down due to penny scarcity could cost restaurants an estimated $168 million annually, the bill's protection against litigation is seen as a significant benefit.

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But there isn't a federal law that allows for that. What we are looking for is certainty, and to minimize frustration for customers and businesses working in cash.