Well, Australia solved that problem: postage rates are in multiples of 5 cents (including GST, or excluding GST for international mail). In 1992 it increased from 43 cents to 45 cents, and it’s been a multiple of 5 cents ever since.
The US used to mint 3 cent coins and $3 coins because the cost of postage in those days was 3 cents. Maybe they ought to start cranking out 44 cent coins and $44 bills for nowadays
One reason I remember that 1c/p coins are still in use is because it’s more difficult for the cashier to pocket the money if they have to register the transaction to give change.
If you paid exactly a multiple of a quid/buck/euro/dinar for most things, and didn’t require any change and hot-footed it out of the store before a receipt was offered, those transactions might soon disappear from the register.
Hell why bother to punch the PIN? Just process as credit and save a step.
This is an excellent point, which had never occurred to me before.
Now, here’s where perception meets reality: I suspect many people may oppose dropping the 1c piece because of their perception that prices which now end in .99 or .98 will suddenly cost one or two cents more. But the reality is that this will be true ONLY if you buy just one item AND there isn’t any tax on it.
Once you have put several items in the basket together, it’s probably pretty random whether the final total will get rounded up or down (though I admit that’s jsut a guess). And if there is tax, the customer could be the winner even on a single item. Example: Sales tax in New Jersey is 7%. On a 99-cent item, that is 7 cents, and the total comes to $1.06, which will get rounded DOWN to $1.05!
Now suppose that same item had been marked at exactly $1.00. With 7% tax, the store will now lose two cents to the state government. All of a sudden, he needs a whole new strategy for pricing his stock, and I’m wondering if more opposition comes from business than from the consumers!
Apparently everyone you associate with are whizzes at mental mathematics.
I think most people get as far as, .99 will cost me a dollar :eek:, OH CRIPES I DON’T WANT ANYTHING TO DO WITH THIS!
Hbns, we are total agreement. You are referring to what I called “perception”, and we agree that most people don’t think through the reality of the math.
The UAE has coins for 1Dh (about 30 US cents), as well as 50 fils (1/2 Dh) and 25 fils… so the smallest coin is about 7 cents… seems to work just fine.
“Rounding” is still conceptually inelegant, even if its real effect is minimal.
I think approaches like this make it conceptually harder. If we overhaul the currency system, it feels like setting prices should change.
If we’re going to abandon cent coins, we may as well abandon cents entirely, and keep account in dollars and dimes.
And between what might be better for most of the people, and the interests of a powerful lobby, guess who wins, every time?
Back in the day it seems like there were whole arrays of merchandise or services that were priced at one or two of each denomination.
Penny - weigh yourself, buy some loose candy, or go to the - er - penny arcade.
Nickel - Cheap cigar, pack of smokes, pack of gum, streetcar/bus/subway ride.
Dime - Candy bar, popsicle, call on a pay phone; in fact there were these stores known as “dime stores”, i.e. there were whole stores full of stuff that cost a dime or two.
Quarter - Burger and drink, though both were small by today’s standard. Parking the car downtown for at least an hour. Glass of beer.
And so on…
But as for countries that keep their “pennies” along with high-denomination coins, I’ve usually found that the pennies or cents don’t accumulate as much as they do here. When you’re pulling coins out of your pocket to pay for stuff, you’re much more apt to use the 1c and 5c pieces that are there.
The problem with adopting a 10 value coin as the lowest is that either the customer or the store ends up losing out due to uneven rounding. So it becomes an even tougher sell to people than switching to a 5 value coin. A look at the different options:
1: Status quo for most countries
5: An even amount of numbers between each 5, so you can have an equal number of roundings in each direction
10: An odd amount of numbers between each coin. If you round 5 up, it’s to the sellers benefit. If you round 5 down, it’s to the buyers benefit. You can do this of course, but it makes the change an even tougher sell.
15: Clean rounding as with 5, but few currencies have a 15 cent coin as far as I know, or whatever else the country is using. So you’d have to invent a new coin to make it work. The coin would also go 6 and 2/3 to each dollar, euro, or whatever you’re using.
20: Same problem as with 10.
25: Could potentially work, but the problem is that we have many things that cost between 10-25 cents. We don’t have anything that would cost 1 cent or 1 penny. If I bought 1 item costing 12 cents, I would presumably not get it for free. How about if my bill was 11.15$. Then I could buy another thing costing 20 cents, and pay the same price.
From my perspective having the lowest coin as either 1, 5, or 25 would work out the best if you use a rounding based system. Other numbers of course work if you force individual prices to be already rounded to the smallest coin.
If we make it so all prices must be set in dimes or 10 cent intervals, the pricing system must change, so there is real effect to the cost of things. If we simply adopt a rounding system, prices can remain the same even if it is a little conceptually inelegant.
That’s not right.
The only decimal coins that were circulating before the switchover day (Feb 15 1971) were the ones that had an exact equivalent in predecimal currency: the 5p coin (equivalent to 1 shilling), 10p coin (equivalent to 2 shillings, i.e. a florin) and 50p coin (equivalent to the 10 shilling note).
Yes, prices had been marked in both systems for a while before “D-Day”, so a price might have been marked as “7d (3p)”, but you couldn’t physically pay 3 new pence until the new coins were released on Feb 15.
The changeover period, during which both sets of coins circulated, was meant to last six months but in practice the decimal coins won out very quickly.
You can replace cent with a lot of other currencies here. I mostly took it as an example because it’s used in several major economies like EU, USA, and Canada. Even if some countries do have their lowest denomination coins as being useful for purchasing some, clearly a lot of countries do not. This topic was about the countries where inflation has made a single lowest-denomination coin essentially useless for anything.
The metal content of these coins is often of greater value than the actual face value. The US mint passed a law prohibiting the melting or exportation of pennies, because they were worried about people selling them as scrap for profit. Having to regularly replace the coins would come at a cost to the government and the taxpayers. In Canada it’s estimated that making a single penny coin costs 1,5 cents, and getting rid of the penny would save 130million dollars.