Thinking about the US dropping pennies. Many other countries have done similar coinage changes, so what happened there?
Do they round off amounts or simply state all charges in round numbers?
Can you still make charges and write checks for amounts with odd cents, even though they wouldn’t be convertible to coinage?
Finland abolished its one cent coins a few years ago. I believe they are still minted, but only for collectors. Of course this does not result in a total abolition of the coin in Finland since the coins minted by other countries of the euro zone in accordance with the ECB are legal tender in Finland.
The effects of a total abolition, I believe, would be miniscule. In cashless payments, cent amounts could still be used - after all, in interbank transactions and currency exchange rates, even fractions of cents are used although corresponding coins have never been minted. In cash transactions, it’s sufficient to round the total amount you have to pay to the nearest multiple of 5 cents (assuming this was the smallest denomination which continued to be minted). You wouldn’t have to round every single one of the prices you add up to get your total amount. Look at gasoline prices, for example, which are often computed in tenths of cents per liter or gallon.
Given today’s price level, I doubt there’s any article you can reasonably buy in retail for prices smaller than five cents anyway. Envelopes. for example, used to be sold individually (high-quality envelopes still are, but cost more than five cents), but nowadays all you get are packs of at least ten of them.
Of course the Master has already addressed this issue before.
Australia used to have 1 and 2 cent coins. Now, prices in shops are given in cents (including tax), and the total is rounded to the nearest 5 cents if paid in cash. (1,2,6,7 go down; 3,4,8,9 go up). Credit cards still get charged in cents, and cheques can be written in cents.
Israel:
[ul]
[li]Smallest denomination is 5 Agorot (100 Agorot = 1 Shekel)[/li][li]Cash amounts are rounded off to the nearest 5 ag.; so 0-2 -> 0, 3-7->5, 8-9 -> 10 (add a unit to the 10 ag. column; carry further as required.) This is calculated automatically by all (except perhaps for the oldest and cheapest) cash registers.[/li]Credit charges and Checks can be (and are) made/written for unrounded Agorot values.[/ul]
Just to expand on this, the abolition of one and two cent coins did not do away with the insulting practice of ending prices in -.99 (now with NEW added insult!)
Oh yes, and there are also dropkicks who think they’re “sticking it to the man” by pumping petrol to two cents over the even dollar. I guess it makes 'em happy.
Venezuela lost not only its cent but all currency up to 5 units (Bolivares). So 10 Bolivares is the minimum coin (and very rarely used or found as it is about 3000 Bolivares to the US$). There are still tons of products with prices that are not multiples of ten and totals always end up rounded off in favour of the merchant.
I remember visiting Italy in the days before TheEuro when they were still using Lira. It was an exchange rate of about 1 UK pound = 2000 Lira. There were no 1 lira pieces, but there were some odd prices of goods, such as 931 lira.
The odd 1 lira would usually only be charged if I bought several items, if I bought 10 items, the odd 1’s would accumulate to a round number. Otherwise they would round the price down to the nearest round number. They never rounded up.
Just as a thought, how about getting rid of both cent and “nickel” (universal North American name for the five-cent piece, which was first struck in a nickel alloy)? Nothing but convention says that prices must be written $5.00, as opposed to $5.0 or $5.000 – we could move to prices expressed as the nearest tenth of a dollar, with the dime as smallest coin in value as well as size.
And this, by the way, would make way for higher-denomination coins in cash registers, vending machines, etc., to replace the smaller bills.
I’ve thought of that, too, but we have a very popular coin denominated at $0.25, which then becomes awkward. If we had gone with a twenty cent coin, as Jefferson proposed, this wouldn’t be a problem.
(Of course, there was a twenty cent coin minted for a while, which was very unpopular. It was too close to a quarter in appearance. Sound familiar? And it was minted for political reasons rather than as an ideal solution for the problem it was intended to address - lack of small change in the western states, hence difficulty making change for a quarter on a dime purchase. Western mints were not allowed to mint pennies and nickels, and the silver lobby did not want them to be authorized to mint a non-silver coin. Hence, the silver twenty cent piece.)
No, he addressed what the US should do, but makes no mention of how other countries dealt with it, except to note that they had.
This is the funny thing about such questions in US politics, that nobody ever seems to notice the rest of the world has experience, so the points are debated as though new to history.
One interesting point, though, is that Cecil says the 30’s penny was worth a 90’s dime. So how did Americans buy small items then, with no smaller coins?
In the 1930s, there wasn’t much that cost less than a penny that was sold. There was penny candy, which was just as the name implied.
There’s a scene in “The Grapes of Wrath” where a waitress in a roadside, who seems to dislike the travelling Okies that come by, but when asked if the jar had “penny candy” says “no, those are two for a penny.”
South Korea no longer mints the 1 won coin. For transactions at the register, all prices end in either a 5 or a 0 (the five won coin is the lowest value coin minted). For banking transactions, the amount may end in any digit.
On the US military bases here in South Korea, prices at the register end in any digit and the customer may present pennies to make up the exact amount or round off to the nearest nickel using standard rounding rules. If they tender an amount greater than what is due, the cashier will make change to the nearest nickel using standard rounding rules–there will be no pennies given to the customer in change.
Norway got rid of the 1 and 2 øre (1/100th of a krone) three years before I was born. Everything was rounded off to the nearest 5 øre. When I was seven we got rid of the 5 and the 25, rounding everything off to the nearest 10 øre. The last coin to get the axe was the 10 øre in 1991. Cash payments are now rounded off to the nearest 50 øre (~8 cents), for electronic payments (i.e. most payments) 1 øre values count.
The Danes got rid of the 1 and 2 øre at the same time we did, but went a slightly different way and only got rid of the 5 and 10 in 1988. So they round off to the nearest “quarter”.
Sweden also has the 50 øre as the smallest coin.
I’m reminded of this brief conversation in an episode of the West Wing:
“Heya, what are you guys up to?”
“We’re attempting to put an end to warfare in the Middle East. What are you up to?”
“Abolishing the penny. I guess I’ll talk to you later.”
“Seeya later.”
This is something I have never understood. Italy was the worst, but several European countries had currency units small enough that the smaller coins were essentially worthless - the legacy of high inflation levels in the years after WW2. Along comes the Euro and a golden opportunity to start again and put things right, and what do they do? They set its value so low that the 1 cent and 2 cent coins were pretty much worthless right from the start. They could have set its value at ten times as much, and rendered the small coins capable of actually buying something.
You have to remember that the modern concept of having such tiny increments of purchasing power embodied in physical coins is a modern concept. In the good old days, if an amount of money wasn’t enough to make an actual purchase of some sort, then you didn’t need a coin for it. That’s why they had no coins worth a tenth of a cent, although half-cents were minted in the 19th century. Understandably, this might have created an issue with the pricing of very cheap articles, but this worked itself out somehow. Retailers probably accepted smaller profits or even losses on some items, if stocking those items brought customers in to buy the more profitable ones. Just like today.
As long as the set of circulating coins includes ones with high enough value to buy things, the smaller ones don’t tend to accumulate as much. In pre-Euro Germany, if you could actually pay an inexpensive restaurant bill with two coins (2 5DM pieces), you were much more likely to also bring out a couple of pfennigs if the final bill was 8.02DM, since you usually kept your 5DM and pfennig coins in the same place (hip pocket if male). This why the pfennigs didn’t accumulate. The value of a the pfennig was indeed a joke, but they usually didn’t become the sort of nuisance that pennies do in America today, and to a lesser extent, correspondingly small coins in other countries.
as a sidenote, Venezuela eliminated those coins (from cent to 5 bolivares) because they were worth so little that people were melting them as their scrap value was more than their face value. As an interim solution, the government issued paper bills for those denominations (!). They were stupid enough to print them in light colours so people started stapling them together and using them as notepads. After that, they got the hint and eliminated them.
The old slogan applies.
“Use it Up,
Wear it Out,
Make it Do,
If you don’t have any,
Do WITHOUT.”