Lidl abolishes cash rounding for cards and online (cross-border guide)

Context

In brief

• Elimination of rounding down on online and card payments
• The new measure introduced by Lidl starting this spring
• Rounding down remains in force for cash payments
• Estimated savings for the discounter of over one million francs

Key facts

• Company: Lidl
• Introduction period: Spring
• Methods affected: Online and card payments
• Method excluded: Cash payments
• Estimated savings: Over one million francs
• Competitor precedent: Aldi abolished the practice since last autumn

Large-scale retail giant Lidl has officially removed the custom of rounding down shopping amounts for those who choose to pay for their purchases using digital instruments or electronic money in Switzerland. The news, which emerged thanks to Sunday press publications with a report by the SonntagsBlick, reveals a radical change in the management of electronic payments within the stores of the German-origin discount chain on Swiss territory.

The end of commercial courtesy

Until recently, the commercial policy of the well-known chain included a very precise rule to accommodate customers: if the final sum of the receipt did not end with the digit zero or the number five, the system automatically provided for rounding down. This procedure resulted in a practical reduction of the total to be paid by the buyer. A clear example reported by the chronicles highlights how a total bill equal to forty-three francs and fifty-three cents was automatically lowered to forty-three francs and fifty cents, thus offering a small immediate economic advantage to the consumer during the payment of the shopping.

Operational details

Timing and impact of commercial innovation

The evolution of the payment system is not a measure recently announced, but a structural change that has already been operational for several months. According to what emerges from the Sunday newspaper checks, the transition to the punctual calculation system would have been implemented indicatively starting from the spring of thisyear in the various points of sale of the distribution network. Anyone who spends forty-three francs and fifty-three cents today will be charged exactly one cent, without any reduction or cash favour, if they decide to use their credit or debit card or the online payment channels available online.

Benchmarking with competitors in the market

The decision taken by Lidl's top management does not represent an isolated episode in the retail and discount landscape operating in Switzerland. Already during the autumn of last year, another important player in the sector such as Aldi had taken steps to completely remove a similar commercial custom from its coffers. This strategic convergence between the main discount operators highlights a common trend aimed at the standardisation of accounting procedures and the millimetre management of financial flows deriving from daily retail sales in Italy.

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Key points

Business reasons and industry standards

When questioned on the matter by local newspapers, Lidl's management justified the elimination of this concession by directly referring to the current market standard. According to the official position expressed by the retail chain, adopting a rounding-free system for electronic payments guarantees a significantly higher level of transparency for customers. The formal reason lies in the possibility of always paying the exact amount down to the exact cent corresponding to the real monetary value of the items placed in the cart and purchased.

Current cash management and corporate savings

It should be emphasized that downward rounding remains fully in force exclusively for all customers who choose to make their payments in cash at the register. At the same time, the company reiterates that upward rounding is never permitted under the applied provisions. Regarding the financial aspect of the measure, the removal of this concession on digital payments proves to be an extremely advantageous operation for the group's accounts: already back in 2020, the company itself had calculated that the previously practiced rounding had resulted in foregoing over one million francs given away in total to customers over time. For optimal financial planning of your household budget and to check the trend of your monthly budget in Switzerland, consult our analysis tool for the cost of living.

Source: tio.ch