Is there any (vaguely legitimate and reasonable) reason to save the pre-1982 US pennies that have a high copper content?
Background: Uncle died recently (not very close to him; he lived a full life and it was his time) and he told my aunt that he wanted me to have first dibs on all the stuff in his garage, and then to feel free to toss what I didn’t want. Part of the cache are two 5 gallon pails of pennies. And to go one step further, my uncle sorted the pennies by pre-1982 (with the higher copper content) and post-1982 with the much less copper content. He apparently even sorted the 1982 pennies that were made both ways.
I’m about ready to trot these to coin star and score an amazon gift card (to avoid the 12.9% boning), but I’m getting some major push back because I’m not saving the copper pennies which some of my cousins think of as a major investment opportunity. I think it’s nuts to keep them because they can’t be (legally) melted, and the cost of copper is not going to exceed inflation even if I wanted to keep them.
Am I missing something on these copper pennies or are my cousins part hoarders / part dooms day candidates?
Trade in the post-1982 pennies to get an idea as to how many pennies are in the jar, say, $100. Tell them you’re taking the other jar to the bank/coinstar machine next week, unless they’d like to buy it for $100.
If they think it’s such a great investment, they should jump at the opportunity to buy them at face value. I’ll bet they don’t take the offer.
While you’re at it, that goes for anything else you find in the garage that anyone says ‘you can’t throw that out…’. Anything anyone tells you not to throw out, offer to drop it off at their house this afternoon. That usually shuts down those comments.
If they don’t want it thrown out, they can have it. Let it collect dust in their basement, not yours.
Did your uncle sort the pennies to determine it any were valued by collectors?
Many years ago I collected the wheat backs and put them in those little books that have a place for every year. Of course it had empty slots for the very rare ones. Never checked their value. Gave them to my sil. He checked the value for collectors. Don’t remember how many coins I had. He said the value for collectors placed the collection at $100.
Your cousins [ETA: and your uncle] probably believe that “some day” Congress is going change the law and allow them to be melted, like the silver pre-1964 dimes and quarters, and when that happens those old pennies are going to spike in value (because the metal content is worth more than one cent).
This was actually a plot line* on an episode of Pawn Stars once. Supposedly the Old Man was hoarding pre-1982 pennies because he believed some day it would become legal to melt them, and when it did he was going to cash in. That’s somewhat plausible since on the show they’re sometimes shown buying old silver dimes and quarters for the melt value, and being a pawn shop they would have had the connections to know where to take them to be melted. Except when they showed his bucket of pennies on camera many of them were obviously new ones with the shield design, making it obvious it was just staged for the show, but that should probably be discussed in another thread.
Being very generous with my assumptions, that is, 5 gallons of pure copper at today’s spot price is only worth $118. If that exact 5 gallons of pure copper came in as pennies, it’d be worth $76, so copper value is indeed more, but that $76 invested 10 years ago would be worth a heck of a lot more now assuming non-stupid investments.
How much natural gas would be required to melt the copper? We can calculate gas cost. Probably need some moulds to form ingots. Safety glasses.
I’m not sure any reasonable person would want to plan for such a meaningless windfall.
That could very well be the case. I was thinking more along the lines of them thinking they’ll be worth something as collectables. But again, even if they are, you still have to sell them or store them. It’s like having a Silver certificate. I used to run across these from time to time and people couldn’t understand why I’d dare spend them. You know how much a $1 silver certificate is worth…one dollar. Maybe an extra few dollars if it’s in good condition and I want to track down a buyer, but it’s not worth my time.
I agree that it’s a stupid investment, but no one is suggesting you smelt pennies into ingots in your garage. Like any scrap, you’d sell it to a scrap company. I worked for a printer that recovered silver and aluminum from photo plates. We didn’t melt it ourselves. We had a service that picked it up, weighed it, and gave us cash.
Right, but somebody has to pay those costs to melt it, so there are extra costs converting $76 face value in pennies to $118 of copper ingots. If you do it yourself, you pay those costs directly. If you pay a service, you pay their (lower, because they’re more efficient) costs but also their profit margin. Assuming efficient markets that works out about the same.
The problem with saving pennies is that they’re not very value-dense. The amount of space and effort to store and move them very quickly overwhelms any value you might get out of them.
A pound of silver quarters is worth like $200 more than face value. A pound of copper pennies is worth like $1 more than melt weight.
Imagine the service that’s going to come buy that. Let’s say they take 20% of the value recovered. You’d have to have hundreds of pounds of pennies for that 20% to even cover the cost of the guy to drive a truck out to pick up your pennies! For them to make a reasonable profit margin and cover other costs, you’d probably have to have thousands of pounds of pennies.
Machinery I use at work counts money based on weight. A penny weighs 2.5 grams according to the scale I’m using. So a pound of pennies would be around 180-182 pennies (damage means a few wind up underweight in any batch). And even copper pennies aren’t pure copper (unless they are VERY old, in which case you’re probably better off selling them to a collector).
So… given current valuation a pound of copper pennies is going to have a face value of $1.80 or so and no way is the copper in them going to be worth a dollar more than that. Part of that “It takes 1.7 cents to make a penny” is labor/machinery costs, not just the cost of the copper going into it. They’re mostly zinc, in fact. Not much copper left in a penny these days.
You would need TONS of pennies to have any chance of recovering an economically useful amount of copper (and you’d be selling tons of zinc for salvage value, too). I am sure there are firms that do that sort of thing, but they won’t be interested in small amounts like a jar’s worth you’ve had under your bed for a decade.
Let’s say it takes “x” hours to melt down all those pennies and sell them. I’m guessing that in the same amount of time, a person could make more money panhandling.
But scrap dealers exists. They are real entities. Metal has a scrap price. Even copper. I could go to a scrap dealer right now in Baltimore and sell copper scrap, provided I had any. Generally for non-precious metals they have a minimum weight that they are willing to buy, but they still buy it. Like I said, penny hoarding is a poor investment, but I don’t have to imagine costs of this or that to convert scrap metal into salable ingots, there is an entire industry that already does it.
So how long would it take to manually sort thru 10g of pennies, to pull out the pre-82s? Or, would there be any other rare pennies that might make it worth the effort of sorting thru them?
I’m no numismatist, but iit is hard to imagine any payoff being worth the effort.
It’s a poor investment, but there was a guy in the 90s who would go to the bank, get all their pennies, sort them by machine, zinc pennies are lighter, keep the coppers, roll and exchange the zincs. He smelted and sold the coppers as ingots. He referred to himself as a miner, and his operation was more efficient than smelting copper ore, as noted in the New Yorker. The feds noticed the unusual demand for pennies in his area, and shut his operation down. Eventually we will stop minting pennies and the hoarders will sell there pennies for scrap. They will the realize that they should have exchanged them at face value for treasury bonds.
But these Elvis plates from the Franklin Mint are sure to be worth something someday.
Your overall point is well made, but just to correct the math, 5 gallons of pure copper is ~170 Kilograms and Wolfram Alpha estimates it’s worth about $1517.80. Wolfram Alpha uses USGS, MorningStar, and other sources for pricing data, which I find suspect. Not the sources, but maybe how Wolfram Alpha parses those soruces(some of which don’t update frequently) and calculates it. I trust their calculation of the volume and mass of the copper much more than the valuation. So let’s say 170KG of copper per 5 Gallons. At the current spot price of $6.22/KG that’s about $1057.40. Now there’s some market analysts who think copper could go to $10/lb in which case the ~374lb of copper that fits in 5 gallons would be worth ~$3.7k. Still less than half a crappy car, so not really a retirement strategy.
Also, pennies don’t fill a full 5 gallon space(cause they’re not a liquid), and of course pennies are worth less than pure copper(even the pre 1982 pennies). Found a video on youtube of someone rolling and cashing in a 5 gallon bucket of pennies and it came out to about $260. So between the ~70% less value of coins vs copper and the inefficiency of packing coins vs a full liquid, you lose a lot of value in keeping pennies vs the copper. Working backwards from this, 26,039 pennies have a mass of about 65.1 KG. So knock off 5% because of the zinc(assume no smelting costs), you’ve got ~61.9 KG of copper now. ~$384.68 worth of copper. So significantly more than the $260 they’re worth as currency, but also nothing to write home about. If copper goes to $10/lb then the copper in those pennies will probably be worth ~$1360. If it’s just the one bucket with the pre-82 pennies then I don’t think it’s worth family strife over. But it could be a fun project to melt them down. Just don’t tell the government you did it.
For pricing, you should just go to the website of your local scrap dealer. Mine is paying $1.90 a pound for #2 copper, $2.20 for brite copper. Even if we pretend you can get $2.20 per pound ($4.85 per kg) that’s only $300. Buy a savings bond.
Wouldn’t surprise me if someone out there has trained a computer vision system to churn through piles of pennies and look for rare ones. Just knowing which dates have rare variants and filter those out so a human can check is probably pretty easy.
Assuming there are enough in circulation to pay for the electricity to run a conveyor belt a camera and a CPU, I bet the Coinstar people do something like this.