I have done this and just to be sure: Coinstar still gives full value gift card codes to places like Amazon.
There is no excuse except for laziness not to get rid of an unwanted pile of change.
The US penny is kept alive solely by the zinc people. Congresscritters can metaphorically be bought for pennies. Similar reasons explain 99% of American politics.
Any proposed change regarding pennies has to come from a lobby with more money than the zinc folk. Logic and our opinions do not matter.
This is exactly what happened in Canada. The government announced that they were ceasing production of the penny, and recommended rounding up or down to the nearest 5 cents for cash transactions. The banks would send pennies they received back to the Mint to be recycled.
Stores took their own choice on what to do. Most rounded to the nearest 5 cents. A few always rounded down and loudly advertised the fact.
Within a year, pennies were very rare in circulation. The ‘take a penny, leave a penny’ dishes on the counters of convenience stores vanished. Our pockets got lighter. Retailers gradually reconfigured their cash drawers, putting something else in the penny compartment.
Nobody misses the penny, except maybe coin collectors. I’ve heard more grumbling about the switch to plastic banknotes.
This. All 3 of the banks I use have change machines in the lobby. Swipe your debit card so the machine knows who to credit the deposit to and dump the bucket of change in the hopper. Goes straight into my checking account at full value.
Yes this is all pretty obvious and what happened in almost every other country ever discontinuing small denomination coins. Especially in an age of fiat money with positive long term inflation*. It’s not a good idea to invalidate outstanding money unless there’s a really good reason. You just stop producing it. Which also allows a gradual transition naturally. Then in a few years nobody will miss pennies.
The only theme of the thread I disagree with is pinning it on lobbying by companies. As already pointed out it would not in fact cut to the heart of Coinstar’s business model not to have pennies, that would only happen if people stopped using coins, which is gradually happening due to technology and the main thing for Coinstar to worry about. Coinstar has machines in plenty of countries with more valuable smallest denomination coins than the US. And the amount of Zn used is trivial in the big picture. Sure whoever supplies it would like to keep doing so, but if the public at large didn’t have silly notions like ‘it will make prices go up as they all round up’, pennies would already be gone, and would have been gone sooner in Canada. It’s inertia facilitated by pandemic public economic illiteracy and other ‘down home’ but silly ideas (people should waste time putting pennies in rolls? it’s good for their souls or something? 
).
*which means a nickel now is worth less than a penny was within living memory. So if the US didn’t need fractions of a penny in 1967 when a penny was worth ~$0.07 in today’s money, why do we need pennies now?
Here’s a link to the John Oliver segment on zinc lobbying:
https://www.youtube.com/watch?v=_tyszHg96KI
Without getting into the credibility of John Oliver as a source in general, just because a small industry lobbies for or against something doesn’t mean it would happen or not if the public didn’t agree with the lobby. This always comes up with guns. The relatively tiny ‘gun industry’ of course lobbies for its interests, but if a big chunk of the voting public didn’t fervently oppose more gun control, the part of the public which favors more gun control would surely prevail. In this case it’s a much more minor issue, but the same general principle applies. A lot of the public, albeit not a really big deal for them, thinks ‘companies will rip us off if prices are rounded to the $0.05’. The tiny part of industry depending on penny production therefore doesn’t have to lobby much to keep things as is. If the public didn’t have such economic populist superstitions, or was actually concerned with govt efficiency (almost everyone says they are, few really are), the penny would be gone soon.
Not quite.
IMO **Corry El **just above nailed it. Twice.
The critical showstopper reason we can’t get rid of the penny is ignorant folks who’ll raise a stink that it’s all a UN black helicopters plot to ruin our money. In a heck of a lot of congressional districts those are substantially the only kind of people. It’s cheaper to keep making useless pennies, nickels, and dimes than it is to risk all those congressmen getting removed. Or so they tell themselves. It’s cheap electoral insurance.
I’d be perfectly happy to have all cash purchases round the post-tax total to the nearest quarter, with $0.01 through $0.12 being the only total allowed to round up by more than 12.5 cents. Or, pay by card like a 21st Century person and get the actual total to the nearest $0.01 just as now.
The idea has been around long before the movies. I first heard about it in a computer science class back in the 70s. Some teacher talked about how someone apparently had done it with calculations of bank interest, where the fractional cents all went into the programmer’s account. However, the teacher didn’t mention the name of this programmer or what bank he had done it at or when he’d done it. So I’m wondering whether it actually happened or not. It could have; banks typically hush these kinds of negative publicity up. It could have been as done as early as the first half of the 50s.
When I was at school the smallest coin was a farthing - a pretty copper coin with a picture of a robin on the reverse. Farthings came a four to a penny and this was the ‘old’ penny of which one needed 240 to make a Pound. A farthing back in the 1950’s probably had around the same purchasing power as a cent today.
Why note revalue the money?
Even if we say that we want to get rid of the concept of a dollar/cent division, and just have a dollar, eventually inflation will grow to the point where the dollar is valueless and should be abandoned. Eventually, the thousand dollar coin will be valueless and should be abandoned.
The result of all of this is that you’re left with useless zeroes at the end of your prices.
Eventually, the money will be revalued. They’ll move the decimal or they’ll divide by 5 or something, but it will be revalued at some point in time.
If we feel like the lowest unit is not worthwhile now, then why not revalue now? Why accept the short-term solution? What’s wrong with starting on the path of the long-term, dependable solution that we’re going to end up with anyways?
It’s a solution in search of a problem. Spend your pennies as you go and they’ll never pile up. Unless you’re one of those people who just stands there while being rung up and then acts surprised that they have to pay, it adds ZERO time to the transaction.
For those who are concerned about the trouble it takes to roll up the pennies in 50 coin rolls, check with your bank. My bank made me take them out of the rolls last time I brought them in. They only take loose change-in sacks. They appreciate it if you leave them with the tellers so that the tellers can dump them into the coin counters during slow times and credit your account at the end of the day. But if you want to be anal about it they will take the coins back to the machine right then.
Pennies are just another coin. They are no more trouble or less trouble than any other coin. I don’t know why people fuss about them.
I am amazed that my bank refuses to count my coins anymore (Chase). I mean, I can see why they do not want to but my perhaps naive view of banks tells me they should take my coins.
You are right that Coinstar is a colossal rip-off. IIRC they take 11% to cash out at my local grocery store.
That said they do allow free Amazon credit. So, 100% of your coins will become a credit to buy things off of Amazon.
Presumably you mean to spend the money and considering Amazon almost certainly sells something you need to buy it is a good choice instead of losing that 11%.
I’d be OK with eliminating the penny, while also eliminating the paper one and having only coin dollars. Then we move all the coins in the drawer over one slot, with the nickels taking the former penny slot and dollars taking the former quarter slot. We also then get to move all the bills over, with $5 going where the $1 used to, and then a slot each for the $50 and $100 instead of putting both in the same slot as we do now.
But no doubt many of my fellow citizens would regard that as the End Times.
At the store where I work (a hypermarket) about 1/3 of the transactions I handle daily are still entirely cash. The highest cash purchase I’ve handled was $900+, and many daily are in the $100-200 range. Still get a lot of checks, too. Plenty of mixed transactions as a combination of cards and cash. (Once had a lady pay with, in order, WIC, EBT, two gift cards, and some cash).
So while cash is getting less common it is by no means entirely dead.
The Australian solution built in the rounding rules as part of the process of decommissioning the low-denomination shrapnel. It wasn’t just a recommendation, IIRC, it was a rule binding all commercial outlets. 5c coins were retained, so the rounding was to the nearest 5c. And the rounding rule was set so that rounding was done to the nearest 5c except in cases where the sum ended in 3 or 8 cents, in which case it was always rounded in the customer’s favour. The thought that people might get a half cent for free every so often was sufficient to dispense with the nostalgia of the cute little animals on the copper coins.
As to Big Zinc opposing the idea, every status quo has lobbyists to preserve it, but that doesn’t mean nothing ever changes. Sometimes lobbyists lose.