We never think about it for two reasons: first, every company does it, so every comparison is on even terms. If I want to compare gas price rates, I can look at two billboards and compare $3.45[sup]9[/sup] or $3.52[sup]9[/sup]. If that 9 is always there, then it doesn’t really matter that what I’m comparing is really more like $3.46 to $3.53 than it is $3.45 to $3.52. So it’s a wash.
Second point, we see the final actual total on our bill. So it doesn’t matter that the stated per gallon price is masked by the .009, the total result is what we see. So again, it doesn’t matter.
FWIW, I was in Mexico last winter and every place I went (except one) had prices in whole number of pesos. Most restaurants, for example, on the menu it would say the price is 40 pesos and then when they bring you the bill, it says 40 pesos. Tax is included in the menu price. A peso is about .08 USD. The one exception was the supermarket, where prices on each item were given in pesos and hundredths of a peso. But when you got to the counter, they added up all the prices and then rounded it off. So if the total came to 87.79 MEX, they would smile and ask you for 88 pesos. I saw half peso coins in circulation but they were not common. I found a .20 peso coin (roughly .02 USD) lying in the dirt and nobody wanted it.
In my locksmith shop, we don’t bother with pennies. Nearly everything in the store is priced at a whole number of dollars, with a few smaller items which cost .50 or .25 USD. There’s no sales tax in Oregon. On rare occasions, I might have a customer who buys $22.50 worth of merchandise and then presents a 10% off coupon. But frequently we can go an entire month without taking in a single nickel or dime, let alone pennies.
I can see that the transition would be difficult. You go into Kroger to buy $17.53 worth of groceries (including sales tax) and then they say “okay, you owe us $17.55” and you’d get mad because they rounded it up to the nearest nickel. But if they rounded it down to the nearest dime and asked you for $17.50 you’d be happy, although the person in line behind you would be upset when their $22.18 got rounded up to $22.20. Eventually, people would get used to it. But I totally see that most stores wouldn’t want to be the first to make the switch.
Nope. The gas tax varies by state and there is a federal tax. However, the federal tax is 18.4 cents per gallon. That’s not the .9th of a cent we see at the pumps. Other states charge different rates, so the tax varies. Rarely does it end in .9 cents.
Gas isn’t sold at the supermarket in gallon sized containers. Instead, I pump until my tank unit it’s full even if it means that i’m not buying whole gallon units. 1/10 of a penny pricing really doesn’t do too much.
When gas cost about 15 cents per gallon, the government slapped on a 2% tax. If someone bought 5.28 gallons of gas, they would have been charged 792 cents which would have been rounded down to 79 cents. Add in that 2% tax, and the customer is now charged 81 cents.
The gas stations could have charged the end user a 2% surcharge after fill up, but we’re talking gas station attendants – not exactly the group I associate with math prodigies. Instead of adding that tax on the end of the bill, the stations simply added that 2% to the price of a gallon. That worked out to 3/10 of a cent.
When there were lots of stations, and they posted their prices to entice the public to choose one over the other, a station posting .24[sup]9[/sup] cents per gallon did way better than their competitor who posted .25 cents per gallon.
Here in the Netherlands most stores already round the total to the nearest 5 cents. The cash register does it automatically and nobody cares. In fact, there’s one supermarket chain that does still use cents (and two-cent coins) and most people think they’re a pain in the behind. And a eurocent is worth a bit more than a dollarcent.
BTW, gas stations here also tack on the .9 cents, just like stores are more likely to price something .99 cents instead of 1 euro. It feels cheaper that way.
Thailand has one-baht coins worth $.03. It also has half-baht and quarter-baht coins which are never seen at all, except when given as change by big retailers like 7-Eleven. (And if the retailer is out of these tiny coins, they just round up in their favor.)
In Israel, the smallest bank note is the 20 Shekel note worth a bit over $5 1/2. The rest are coins going from 10 shekels down to 1/10 of a Shekel (worth about 3 cents).
They need a 10 Shekel note, and even a 5 Shekel note which would be worth about $1.50 dollars.
Maybe I’m use to those worthless dollars, but I use paper dollars and don’t end up with too much change by the end of the day. In Israel, I usually end up with pockets bulging with about 200 shekels worth of coins at the end of the day ($50). When I pay for stuff, I have to remember to dig through my pockets for change.
In Germany in the late 90s, the US base exchanges did not use pennies. They rounded down for 1 or 2 cents and up for 3 or 4. If someone came in with pennies they would take them (usually new transfers in). Prices would still ring up to the correct amount and the cashiers would adjust up or down.
Pennies are not welcomed on the New Jersey Turnpike or the Garden State Parkway. The tolls on both are to the nickel. There are signs on the booths telling you they don’t take pennies. You pay a toll of $2.55 with two dollar bills, two quarters, and five pennies, they won’t accept it. Even if you’re in the Exact Change lane, they will insist you give them a five and they’ll make change over taking pennies.
If you insist, saying that’s all you have, they’ll take the $2.50, but dump the five pennies on the ground.
Anything under 10 baht I want to get ride of ASAP, although if I have 5 baht coins at least they’re good for the baht busses.
Similarly in China, anything under 1 RMB isn’t worth the work it takes to carry around. Honestly China is worse. Due to rampant counterfeiting the largest denomination available to the public is only 100 RMB. Thats about $16. It sucks paying 18000 RMB rent with 100 RMB notes.
In the U.S., all notes above the 100 were discontinued in 1969. The worry wasn’t counter fitting as much as illegal transactions. If I’m running a million dollar drug sale, ten packets of $1000 bills (100 bills in a packet) is quite doable. You could store it in a small bag. However, 100 packets of $100 bills would be a lot harder to carry. There’s even talk about doing away with the $100. Most people who need to pay large transactions would use checks or electronic payments.
At one time, there were $10,000 and even $100,000 notes in the U.S. There weren’t used for the general public, but for transactions between banks.
It’s estimated that 9 out of 10 $100 bills are located outside the U.S. – mainly for people who want to keep their money in a safer place than what their own economies can offer.
It’s thought that Europeans have purposefully made the €200 and €500 notes in hopes that the euro will replace the dollar for those who save at the First National Bank of the Coffee Can Buried in My Backyard.
If you’re calling the American currency “hyperinflated,” you really, really don’t understand hyperinflation. Normal, run-of-the-mill inflation like the kind we have isn’t causing any problems that re-basing the currency would actually fix.
It’s one thing to say their coin receptacles don’t accept pennies, etc. but to “dump pennies on the ground” is one of the reasons the US mint is forced to produce 13 billion pennies a year.
I can see why they would prefer not to have to process and store pennies and try to discourage people from using them but they should accept them when it happens.
Even if they were to stop producing the penny,(which they've done here in Canada.), it will remain legal and recognized currency and should be accepted as payment.
‘Hyperinflated’ is not the right word, but I am having trouble thinking of a better one to describe a currency that is worth less than 1% of what it once was. The only difference is that the inflation occurred over a much longer period of time than a hyperinflation.
Not causing any problems? How about worthless coinage?
Look, coins cost a lot less to produce than bills because they last a lot longer. The dollar is getting to the point where it costs more to print one and keep it in circulation than it is worth.
So we really have a choice: re-base the currency or coin dollars (with coins up to $100 in value) and call them the new penny. That is what it comes down to.
That’s just regular old inflation. And some inflation is a good thing. It keeps people from hording their money (since if you do, it’s goiing to depreciate), and keeps that money circulating and growing the economy. Rebasing the economy and/or reminting an entirely new scheme of coins is going to be way more expensive than just eliminating the penny, particularly since cash is much less important as a physical object than it has ever been in history.
There was even a brief discussion on The West Wing about discontinuing the production of pennies to save the Mint some money. One aide noted sagely, however, that the Speaker of the House was from Illinois, that Illinois’s favorite son Abraham Lincoln was on the penny (yes, I know he was born in Kentucky), and that pennies were thus going to keep getting minted no matter what.