Montgomery, Ala. (WDNews) — A new state law is now in effect across Alabama, giving retailers the option to round cash transactions to the nearest five cents.
Gov. Kay Ivey signed Alabama Act 2026-548 on April 16, and the law took effect immediately.
The change comes as the U.S. Treasury moves to halt penny production, creating challenges for businesses trying to maintain enough coins for everyday transactions.
Under the law, retailers may round the final total of a cash purchase to the nearest $0.05. The rounding happens only after all taxes are added. Totals ending in 1, 2, 6, or 7 cents are rounded down, while totals ending in 3, 4, 8, or 9 cents are rounded up.
The rule applies only to cash payments. Credit cards, debit cards, and other electronic transactions are not affected.
Officials say the law is optional, meaning businesses can choose whether or not to adopt the practice. Those that prefer to continue handling exact change can do so without penalty.
The Alabama Retail Association has created a downloadable notice sign for businesses that choose to implement rounding. Retailers are encouraged to post the sign at checkout areas to help inform customers.
The association said the goal is to provide flexibility for businesses while maintaining transparency for shoppers.
