I was very surprised to read that the last American penny was minted this week. Over the years it has come up for discussion several times as to whether they were useful or necessary. Now they are gone and nobody seems to even be noticing. There is little to no press coverage in my bubble.
I was born early enough that finding a penny was an actual stroke of luck when I was a kid. You could get a piece of bubble gum for that, or a caramel. And it didn’t take all that many of them to get a candy bar. I think it’s safe to say most kids at one time or another went through a phase of scanning their parent’s change for “special” pennies, with dreams of striking it rich with a real find.
It’s the right decision, but I’m sad to see them go all the same.
By 2025, the only reason pennies exist(ed) is to keep you from getting more of them. Your total at the register is $21.33? Scrounge up three pennies else you’ll be getting two back.
It is long overdue and the nickel should also go. Pennies have stayed around for no reason for far too long.
I do have a bunch of wheat pennies I had collected when young and some very worn older Indian Head pennies that my grandfather had collected from when he was a cabbie. Their value is apparently about a penny as they are very worn.
Somewhere there is a related thread to this, but this should be fine as an additional stand alone.
The typical circulated, worn wheat penny is generally worth about 5 to 15 cents, while the average circulated indian head penny ranges from $1-$10. Just based on their copper content alone, they’re worth about 2.5 cents.
Now, if they’d just ditch the paper $1 bills for coins, we’d be in business.
Note pennies will still be with us for the foreseeable future given how many of the buggers are still out there, circulating or not. I wonder if there will be a deadline past which no financial institution will accept them anymore?
Some of the articles I ran across mentioned some stores already seeing shortages and asking customers to use exact change. I, at my little store, have 3 boxes, or 7500 pennies, on hand and I’ll pick up more this week. I have no idea how long it’ll take before my area starts seeing them run out, I just don’t want to be the first. I want to make sure I have enough on hand to see what other businesses are doing first. Or, more specifically, I want to see what the general public decides is the right and/or wrong way to handle rounding. That’s not a facebook argument I want to be on the wrong side of. Also, I’m hoping our POS (Clover) updates their software to handle it. I think it can be set to round cash, but it needs to be able to round card payments (or at least SNAP payments) as well.
SNAP payments are going to be an issue, unless, or until, POS systems can round them the same way they round cash. Retailers aren’t allowed to charge SNAP paying customers more than cash paying customers. There’s workarounds, but they’ll come with their own set of problems that I’d prefer to avoid.
Canada eliminated the penny over a decade ago. Cash and debit transactions are billed to the exact value because it’s just digital numbers bouncing from bank to bank and it doesn’t matter.
Cash transactions are rounded, with the most common rules being the following:
The rounding is not done on each individual item, but on the total amount, with totals being rounded to the nearest multiple of 5, i.e., totals ending in 1 or 2 round down to 0, totals ending in 3, 4, 6, or 7 round to 5, and totals ending in 8 or 9 round up to 10.
I can’t seem to follow the link to the story itself (probably archived), but when I googled for the rounding rules I saw one headline of someone who tracked a year’s worth of purchases and it worked out in his favour for a grand total profit of $0.89.
It must be just your bubble. I’ve seen tons about it. Most of the articles on Facebook are filled with people complaining that it is the end of the world: everything will be more expensive, and it is just the first step for The Government to force you into a Cashless Society and take away Your Freedom. (Plus many people not understanding which years have much copper and which don’t, and at least one smug asshole insisting that the US one cent coin isn’t called a “penny”.)
It is a fiendishly sinister prospect, once you realize just how much control it could give them. 20 years ago I would have thought it was silly to be worried about it. Now I know the gov can change before my eyes, and I’ll never trust it again.
Over in the U.S. military community in Germany, they eliminated the penny over thirty years ago, reportedly because they were spending too much money shipping pennies overseas—because even then, they received far fewer pennies in payment than they returned in people’s change. Like in the U.S., it was basically a one-way transfer into people’s change jars.
So anyway, from experience, you don’t need to change anything with the cash registers (or POS devices). They only thing that changes is the how the cash transaction is conducted.
If the sales price with tax is $8.12 and the person pays with a $10 bill, they get $1.90 in change. Note that the receipt still says $8.12 with change due of $1.88. The person just simply gets more cash change back. And if they pay by card, they are still charged $8.12 (not $8.10).
Similarly, if the sales price with tax is $8.13 and the person pays with a $10 bill, they get $1.85 in change. Note that the receipt still says $8.13 with change due of $1.87. The person just simply gets less cash change back. And if they pay by card, they are still charged $8.13 (not $8.15).
At least this is the mathematically fair way to do it. Exactly the same number of transactions round up as round down, so it averages out to an wash over the long run for someone always paying cash.
But I see your point with SNAP payments. They probably need to update the law and or regulations to make it clear that this allowable, because some cash customers are technically being charged less half the time.
And this problem is likely compounded because, in an effort to avoid complaints from people, I’ve heard some businesses here in the U.S. are rounding all cash purchases down to the nearest $0.05.
I always thought that if the U.S. got rid of the penny, the government would issue clear guidance on how to handle it like the U.S. military did for overseas communities decades ago. But I guess that was too much to expect from the current administration, which has evidently simply ceased production by executive order, with no legislation or official guidance on how to handle cash transactions going forward.
The one thing I just found was this from blog post from the Federal Reserve Bank of Atlanta, which describes the issues and recommends the “symmetric rounding rule” I described above for cash payments. It also notes there are as yet no official rules or guidance.
From a value point of view, you are correct, of course. The negative seigniorage for nickels is even worse than it is for pennies. (Only allayed by the fact that there are far fewer nickels in circulation than pennies.)
But it makes the rounding rules much more difficult, because you can’t do symmetric rounding like I described in my previous post. It also makes cash transactions harder because we have quarters (25-cent pieces) instead of 20-cent pieces.
These issues are also talked about in the federal reserve blog post I linked to in my previous post.
It sucks, because getting rid of the penny is exactly the sort of thing we (evidently) needed a brash authoritarian leader to just take action and ignore all the noise. But our particular authoritarian doesn’t have the capacity for strategic thinking to also get rid of the nickel, dime, and one dollar bill. So we lost the penny, which is good, and kicked the can on actual making our money make sense, which is frustrating.
Plus, you know, all the other bad parts of this particular authoritarian.
I still think that this is a short-sighted solution.
Eventually, every currency will need to shift the decimal point over. There’s really nothing gained by putting that off, if the time has definitively come.
