The danger in round numbers

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With the introduction of Euro coins, outraged Italians became convinced inflation was out of control. Overnight, the price of an espresso in Milan went from around 0.52 euro (1,000 Italian lira) to 1.00 euro. It was simpler for café owners to take a single coin for a coffee, so they rounded up the price. (A 1,000 lira coin existed before 2001). The price jump created a perception of wild inflation.
Last year, US vending machine snack price inflation was over 13% y/y, higher than any other food inflation. Some vending machines in the US still take cash (about half in 2021), and rounding up makes dollar bill cash payments simpler.
In the UK last year, prices were rounded up to the nearest pound for 33% of individual items with a price increase of 2% or more. If an item’s price rose more than 50%, rounding up was used a majority of the time.
Rounding up a price often creates sudden sizeable inflation for an item. When people spent cash, setting prices that could be paid with a single coin was convenient. With today’s digital payments, rounding up serves no purpose (other than boosting profits). If smaller, frequent purchases are rounded up in price, consumers start believing inflation is higher than it actually is.