See scenario #2 in the OP, which falls apart if businesses do not cooperate.
We’re at the point where even nickels don’t make sense:
To answer the OP: pennies, nickels, and dollar bills will all stick around until physical currency itself becomes obsolete. We really aren’t that far from that point now. It is a problem that will solve itself.
Scenario #2 would have buisinesses not accept pennies or give them in change. Why would they need to adjust prices when much of the time the sales tax would throw it off anyway? Businesses could continue to price things however they want and everyone would round to the nearest 20th of a dollar. Plus, I would wager that the trend is for more and more gas purchases to be paid for with credit card at the pump or, like most of the stations near me, pay in advance.
CaveMike: I don’t entirely agree that physical currency will become obsolete, but even if I did, why not stop wasting the money spent on minting pennies now?
How could one buy a 44 cent stamp at the Post Office without pennies?
And don’t say “round up to 45 cents”. Because that means the effective postage rate is 45 cents, not 44 cents. And that means a 1 cent increase in postage, which needs to be specifically authorized.
Does anyone stand in the long line at the post office to buy 1 stamp?
I’d like it if we got rid of both pennies and nickels, but it won’t happen. Americans for Common Cents (aka the zinc lobby) make it too difficult. I think the time and effort needed to eliminate the penny is greater than the time and effort remaining to move to a nearly cashless economy.
Many people get by today without cash, in another generation most transactions will be cashless. Bills and coins can stay just as they are since the penny, nickel, and dollar coins won’t bother anyone. The only people that will have them are banks and grandparents (and grandchildren on their birthdays).
From the Wiki
“There has never been a coin in circulation in the U.S. worth as little as the penny is worth today. Due to monetary inflation, as of 2007, a nickel is worth approximately what a penny was worth in 1972.[11] When the United States discontinued the half-cent coin in 1857, it had a 2008-equivalent buying power of 11 cents.[12] After 1857, the new smallest coin was the cent, which had a 2008-equivalent buying power of 26 cents. The nickel fell below that value in 1974; the dime (at 10 cents) fell below that value in 1980;[11] the quarter (at 25 cents) fell below that value in 2007.[12]”
its worded a bit weird but the quarter is now worth less than either 26c or 11c due to inflation.
I throw my pennies away, usually in the street, I figure some kid with be excited enough to pick them up.
Back in the mid-80s, I waited tables, and finding $70+ in singles in my pocket at the end of the day wouldn’t have surprised me, and that was at a midlevel restaurant and at a time when most people only tipped 10%.
I have, on occasion. Not a 44 cent stamp for first class, but a stamp for a single letter to Canada, or to Europe, because I don’t send letters to those places very often.
Nuts, I’m sure Congress and the President were itching to completely overhaul our currency system, only to be stymied by postage pricing. If only there were a way for them to change the Post Office’s rates.
The PO could sell 1 cent stamps along with their 44 cent stamps, they sold half cent stamps long after the half penny was discontinued.
The question is how to discontinue the penny, not how to eliminate the concept of 1/100 dollar.
Anyway, scenario #2 isn’t going to happen. Not because businesses want to screw their customers over a penny here and a penny there. Because people are idiots, and will throw a fit the first time you round their prices up, and deny them their precious penny. They could add up every lost penny from every cash transaction they make in a year, and be lucky to have enough money to buy a Big Mac Combo. That’s not even including the fact that for every lost penny there’s likely a gained penny from transactions rounding down.
I’ll tell you this - I count the daily bank deposit for the c-store at which I work, and can tell you that daily, we deposit a minimum of 150 one-dollar bills. I have deposited over four hundred on more than a handful of occasions. This is part of a usually $7500+ deposit. If the dollar bill is eliminated, we’ll just be depositing heavy-ass coins instead of bills. Even if the customers were forced to use coins instead of bills, the one dollar unit of currency will still be used to the same extent as it is now. Depositing what is essentially sixteen rolls of 25 one-dollar coins, along with all the rest of the hundreds of larger bills, into a night deposit box will be a major pain…
Joe
Ever heard of tips? Nightly, I am paid by several waitstaff in singles for gas, between 10 and twenty dollars each, sometimes more, sometimes less.
Joe
Where I work, our Marlboro cigarettes, all styles, used to come to, after tax, $5.26. If I gave everyone who bought a pack using 6.00 in cash .75 change instead of $.74, my register would be short probably a quarter over one shift. Over a day, maybe a dollar. Over a month, $30 profit, down the shitter.
I’ll grant you, Staples was probably selling almost no single bottles of Wite-Out as a whole transaction, but pennies really do add up.
Joe
Pennies have only two purposes:
- Hoarding until they’re worth actual money.
- Using to avoid the acquisition of more pennies.
They should have been abolished decades ago. Anyone who thinks they have any place in a civilized society should (a) explain why we don’t also need a tenth of a penny coin, (b) go read the Wikipedia page on rounding to discover how you’d end up with neither more nor less money than you have right now and (c) hit themselves in the face with a sock full of pennies.
Only if it’s not offset by other totals that are rounded up. And since you mention taxes, the gas station is already losing or gaining up to half a cent due to rounding on each sale.
Yes, businesses that only have sales that are rounded down will suffer. So will customers who only make purchases that are rounded up. Thankfully, the penny would be abolished in the real world where that doesn’t happen.
Both the penny and the nickel are out of date. Getting rid of both takes care of any rounding issues.
Only if all prices drop the last place and there’s no sales tax. If there’s a sales tax, there will almost always be rounding, just as there is with a penny.
Getting rid of the nickel would probably also necessitate getting rid of the quarter or replacing it with a 20 cent coin or something else, too.
Just make the quarter the lowest coin. Increase minting of the half dollar. Increase the $1 coin. Drop the $1 bill. Increase printing of $2 bills.
I’d make the quarter the lowest denomination coin and eliminate the one-dollar and five-dollar bills in favor of one-dollar and five-dollar coins. I’d also like to see a larger high-value bill, like maybe a $500 or a $1000 paper bill. A large amount of money in one-hundred dollar bills is so bulky to carry.
I have that problem all the time, too.