I think it’d be totally awesome to introduce a farting coin.
My wife just got her award letter from the Social Security folks, who will be electronically direct depositing her monthly benefit to our checking account. The letter states the monthly amount including cents, less a deduction for Medicare, and then ‘rounding - we must round down to a whole dollar’. There’s certainly no technical reason they can’t process the payment to include fractional dollars, so someone somewhere decided to round off, and always down, of course…
Why did your in-laws roll pennies to the zoo?
Calm yourself, you’re gonna break something.
More fun than playing hopscotch on the way?
What prevents merchants from rounding totals even if the penny is not discontinued? This is not just a rhetorical question. There may be various state or local consumer protection laws that hinder this. Many consumer protection laws require that the sales amount shown on an item match the amount paid at the register. I can think of at least a couple of ways to avoid conflict with these laws:
- Always round down. Retailers tolerate fees for electronic transactions so why couldn’t they tolerate these losses if they really don’t want to deal with pennies? It could even be used as a nifty advertising slogan – “Sometimes pay less but never pay more at the Ynnad Store!”
- Consumers insistent on getting their pennies could be required to use a penny self-service device at the counter. The cashier would not keep pennies in the register. It could be on the honor system or it could be a simple mechanism that limits the number of pennies dispensed per transaction. Something similar already exists with the take a penny/leave a penny trays.
For the most part, merchants could refuse to accept pennies as payment. Although pennies are legal tender for a private debt, there is no debt created when you are purchasing goods for cash at a merchant. All you have is an offer to make a purchase and the merchant can simply refuse to sell. Some local governments have enacted laws that require merchants to accept cash in addition to electronic payments. These laws were written to protect people who, for whatever reason, are unable to maintain a relationship with a bank. In these localities, maybe merchants would have to accept pennies.
The real problem with the penny is not its low value. The problem with the penny is that its manufacturing costs exceeds it face value. Certainly, the current negative seigniorage resulting from today’s penny specifications is unsustainable. That is why I proposed a penny with manufacturing costs less than face value so that every penny minted will make a profit for the government.
Several posters have said that they just throw pennies in the trash. If a penny’s costs are less than face value then this is a good thing from the government’s point of view. Every time a penny is irretrievably lost or destroyed, that is one less cent that the Treasury is obligated to honor. With the aluminum penny I proposed, the government could subtly encourage this activity with such slogans as, “When discarding your pennies, remember to place them in the recycling bin.”
From what I have read, even if you ignore the figures thrown out by the Americans for Common Cents organization, about 30 to 40 percent of Americans want to keep the penny. Are the anti-penny posters in this thread suggesting that up to 30 or 40 percent of Americans don’t know what they are talking about? Oh wait, never mind. Nonetheless, there are solutions that would keep both the penny-haters and the penny-lovers happy.
Eliminating the penny would make buying thoughts too expensive.
Most people overpay. Even two thoughts for a penny is too expensive.
It’s done by including sales tax in all prices and rounding them to whatever value they want. I know a pizza place that prices everything in increments of 25¢. They only change they carried was quarters. It’s a little tougher to do for stores that carry the few remaining products that are worth less than 25¢.
Sales tax, sometimes called gross receipts tax, throws a monkey wrench into the whole thing. Forty-five of the fifty states have a sales tax. Many require the sales tax to be charged separately. Some states may have a way around this. Texas is the only one I have researched so far. In Texas, if a merchant displays prices including the sales tax then it must have a sign stating it is doing so and must also supply the customer with a written statement of that effect. In addition to states, many local governments such as cities and counties also have a sales tax. Thus, sometimes the total tax rate can vary from store to store in a relatively small geographic area. Also, local sales tax rates often changed at a greater frequency than the state sales tax rates. Can you imagine some chain store such as Dollar General trying to include sales tax in pricing so that everything came out to the nearest nickel or dime. Prices would be different from store to store and might need to be changed at any time. Also, some states allow some customers to be exempt from paying sales tax for various reasons.
If you think things are crazy now, look back about 100 years ago when sales taxes were first introduced. People were worried about getting cheated out of even a fraction of a penny. As mentioned by DrDeth and Sooner earlier in this thread, some states issued sales tax tokens denominated in mills (1/10 of a cent) so that consumers would not be ripped off for a fraction of a cent when making small purchases. From the Sales Tax Collectors website taxtoken.org:
You can imagine that if the sales tax rate is 3% and a child buys a 10c piece of candy there is no way to collect the three-tenths of one cent. If you rounded down that meant that the merchant could not collect anything for the tax. If you rounded up the state was gaining 7 tenths of a cent on every 10 cent sale. You can see that if the merchant sold 100 pieces of candy he was loosing 30 cents a day in tax revenues to the state, so the token was born. This allowed the merchant to take 11 cents for the first piece of candy and give change back in mills. The next time you wanted to buy a 10c candy you could present the merchant with the 10c and a token and complete the transaction. This allowed the merchant to collect the sales tax on each transaction.
Googling, sales taxes were first introduced in the United States in 1930, and using an inflation calculator, a penny then would be worth $0.19 now. So concerns about fractions were obviously a bigger issue.
That’s even more true of the nickel than the penny. I understand a nickel costs the Mint about 14 cents to make.
A pizza place I once worked in tried something like that. We were supposed to round everything up to the nearest 25 cents. Due to complaints, that lasted about 3 days.
That would be the worst possible way to do it. They could round down, or just like this place price everything include sales tax in 25¢ increments and then there wouldn’t be complaints.
It’s easy to put up a sign that tells the customers all prices include sales tax and with modern cash registers put that on the receipt too and even detail the actual taxes paid. I don’t know why a state would stand in the way of doing that.
OTOH you’re quite right that the varying sales tax rates around the country would be a problem for nationwide retailers. The sales tax rate can vary a lot from state to state, including states with no sales tax, and most states have their own set of exceptions for certain items.
Weird. Guess it’s what you’re used to. It reasonably common here to see fast food stand/food truck prices to the nearest quarter, sometimes 50 cents. To the penny is probably less common than to the nickel. (And this isn’t anything new. My local hot dog stand in the 80s had everything to the nickel. Even they knew pricing to the penny was stupid.)
The relevant question would be, why are those 30-40% in favor of keeping it? Tradition? Inertia? Fear of somehow being ripped off at the store, a couple of cents at a time?
Many people (myself included) have opinions on things, that either (a) aren’t really grounded in reality, and/or (b) are purely emotional. And I suspect that most of the people who “want to keep” the penny have opinions on the matter which line up with one or both of those.
No, it doesnt. The penny rounding only occurs on your final bill, not on the price of each object for sale.
Yeah, but a penny back in 1900 had the purchasing power of like 35-40 cents. So, a mill was not a lot less than a nickel.
I went back to 1900, your figures are likely better.
Where did you read that 30 to 40 percent of Americans want to keep the penny? I’m curious why they want to do so.
This was a response the proposal to keep the prices of each individual item to the nearest nickel or dime to avoid any rounding for the total purchase. Sales tax is an impediment to that proposal.
(neverevermind; already covered)