I just returned from lunch at an upscale restaurant that recently opened. The bill was $20.95, and I gave the waiter two 20s. When he brought the change, I set out the tip, and then looked for the nickel (the change came in a leatherette folder, and sometimes they stick the loose change under the inside flap). There was no nickel. I told the waiter about it, thinking it had fallen out, and he ran to get me a nickel. When he came back he had a dollar in his hand - he explained that they weren't set up to "do change," so he was giving me a whole dollar back. I asked him if the lack of change in the house was because they were just open, or because I was there so early in the day, or was it, perhaps, a policy of theirs to round up so they don't have to deal with change? Neither he nor the manager that followed him out would say which it was. They just repeated, "We just don't have any change."
Years ago a restaurant chain here in Chicago called "Chances R" got into trouble with the State of Illinois for doing something similar. They had waitresses who carried a "bank" with them, and customers paid the bill and the waitresses made change right there at the table for them. So that the waitresses wouldn't have to be weighted down with coins, Chances R was rounding up or down (can't recall which - maybe it was both), and they were reported to the state, and they had to adjust theoir policy, to give people exactly what they were owed, no more, no less. I don't know what point of law this was based on.
So my questions are: how prevalent is this practice? Is it actually illegal, or just nervy?