Making Change from a Purchase

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  • 0:00 Selling
  • 1:01 How to Make Change
  • 2:24 Customer 2
  • 3:15 Customer 3
  • 4:22 Lesson Review
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Lesson Transcript
Instructor: Yuanxin (Amy) Yang Alcocer

Amy has a master's degree in secondary education and has taught math at a public charter high school.

Watch this video lesson to learn the process of making change so you give your customers the least number of bills and coins as possible. See how you need to work your way from the largest bill or coin to the smallest.


Meet Jim. Jim works at his father's toy store. Jim is in charge of all the sales that happen in the store. So, Jim is the person people go to see when they want to purchase a toy.

making change

Not only is it Jim's job to make sure that people are able to find what they are looking for, it is also Jim's job to process the sale and give the customer whatever change he or she needs. The word 'change' here means the extra amount paid for an item that needs to be returned to the buyer.

When customers buy, they usually give more money that is needed. This is because many times, the customer does not always have the proper amount of dollars and coins needed to make the exact amount. For example, the customer wants to purchase a radio-controlled airplane that costs $14.50 but only has a $20 bill. The customer purchases by overpaying with $20. Jim would need to give the extra amount paid back to the customer as change.

How to Make Change

There is a process that Jim takes to make sure that he gives his customers their change using the least amount of bills and coins. It's a simple process. Jim starts with the largest bill or coin possible and works his way down.

So to give the right amount of change back to the customer who just bought the radio-controlled airplane, Jim first calculates the change that is needed. He subtracts the cost of the toy from the amount paid. He gets $20 - $14.50 = $5.50.

Now that Jim knows how much change to give, he looks at the amount and asks himself what is the largest bill or coin he can take out of the change. His choices are $20 bills, $10 bills, $5 bills, $1 bills, quarters, dimes, nickels, and pennies. The largest of these bills and coins that he can take out right now is a $5 bill. He can take out one $5 bill.

What does this leave him with? He is now left with $0.50. Jim asks himself what is the next largest bill or coin he can take out? Looking at the $0.50 that is still needed, Jim sees that he can use quarters. How many quarters does it take to make $0.50? Jim needs two quarters.

So to make change of $5.50, Jim needs one $5 bill and two quarters. Jim hands it to the customer, and the customer walks away happily with his radio-controlled airplane.

Customer 2

Here comes another customer that wants to buy a 500-piece puzzle for $7.97. The customer hands Jim a $10 bill. How does Jim figure out the change for this customer? Let's see.

Jim starts by subtracting the cost of the item from the amount paid. He gets $10 - $7.97 = $2.03. This is the amount of change that is needed.

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