Does your business handle a lot of cash? Does it do a high volume of individual transactions, particularly single-item? Do you currently or have you considered adding tax-included pricing to your mix?
What is tax-included pricing?
It may seem like a silly question; self-answering even. It’s when you take the price of something (a glass of beer or a sandwich, for examples) and round the price to an even unit: $4 for instance. The “real” price might be $3.71 (in Reno, NV at 7.725% sales tax) but the customer sees a convenient, even number and your front-end staff don’t have to worry about delivering (or even having) that 29 cents change.
Why would you use it?
If it’s appropriate for your business, there are several benefits to incorporating tax-included pricing, including:
- simplified menus
- increased speed of checkout
- improved accuracy of totals
- fewer trips to the bank for coin replenishment
- increased customer confidence in the purchase total
What kinds of businesses really benefit from this?
The most common place you’ll see this sort of pricing is in prepared food, particularly mobile or small. Taco trucks, sandwich carts, delis, and brewery tasting rooms are just a few of the clearer examples where the increased speed and clarity during checkout improve the experience for everyone. Some less obvious examples? Laundry services such as shirt or suit cleaning (where such services are taxed), temporary market stalls, particularly craft fairs, for non-food (candles, oils, crafts, and the like, where patrons are less likely to be aware of the local tax rates), and home party sales or other mobile sales where it’s cumbersome to carry large numbers of coins.
What about tax reporting?
Including the tax in your pricing makes life easier for your customers and your clerks. What about the regulatory requirements, though? This is where it’s critical to use a system that understands this method of selling. SMBple Sell was built from the ground up to understand three different types of transactions: taxable, tax-included, and non-taxable. You decide what your pricing is and how tax should be applied; Sell handles the rest, both during the transaction and in the email sales reports, where the totals are easy to find.
What tax rate is applied?
Understanding your local jurisdiction(s)’ taxing policies per product or service (is it taxable?) is an important task for your business. What we do to help is to use geolocation to determine your current Zip Code (US only) and look up the appropriate tax rate. We’ll cover more details on this in a different article.