Yes. That was my point. We already have both available, and the American public has overwhelmingly chosen to keep using the dollar bills rather than the coins. If coins really were so much better, I would expect that, over time, people would be using them more and more.
Let’s say a manufacturer has a new formula for their detergent. But the only way they can get people to use it is to discontinue the old version. When both were available, people overwhelmingly chose the old version.
Surely you’d think that the new detergent was inferior to the old one in the ways that mattered to its users.
The reason why we’re confident Americans would embrace larger coins if the issue were forced is because we heard all of the exact same arguments against them as appear in this thread prior to getting rid of small bills in Canada, and after a few years later people were overwhelmingly in favour of the transition. Moreover, this pattern has been repeated in other jurisdictions. Unless American Exceptionalism encompasses a lasting preference for raggedly mostly worthless paper currency, there’s every reason to expect the pattern would hold in the US as well.
Now I just don’t care anymore. I keep a single 50 in my wallet for the contingency of payment networks being down, but it’s been in there for over a year at this point. Physical currency just doesn’t matter if you never use it.
I’ve heard the argument that one reason why dollar coins haven’t succeeded is that cash drawers have five slots; one each for pennies, nickels, dime and quarters and the last for stamps and/or rolled coins or whatever. Ideally, getting rid of the one-dollar bill and the penny might encourage adoption of the one-dollar coin.
To extend the analogy, suppose the manufacturer has a new formula for detergent, and that new formula costs 1/10 the price to produce. The price of detergent is regulated by law/very strong market forces so that both formulations sell for the same price. That price is such that the manufacturer loses money on the old formulation, but makes money on the new one.
Under those circumstances, it makes sense to discontinue the old formula and use only the new one, even if the market preference is for the old one. People would definitely prefer that the manufacturer keep making the old money-losing product, but “do whatever the customer prefers” is not a viable business strategy.
(FWIW, I also think that American’s distaste for dollar coins is overstated, and they’d eventually get used to them like so many other countries have. But the transition is rational even if this is not true.)
There’s also the inertia problem for vending machines. As prices got higher, they spent a lot of money to retrofit machines to accept dollar bills, and now the sunk cost fallacy makes them resist retrofitting again to use dollar coins, even though coin processing would almost certainly be cheaper over all.
I’m pretty sure that the vending machine industry was already involved in the design of the Susan B Anthony and Sacagawea coins, so that most vending machines are already able to accept them.
It seems hard to imagine now, but for a long time, it was possible to pay for a subway or bus ride or a newspaper or a soda or candy bar from a vending machine, and needing only one coin for many of these transactions. Inflation and the low value of coins makes that impossible today, though it’s also true that hardly anyone actually buys a paper newspaper, and mass transit has switched to electronic payment methods.
Again, it’s not an assumption, it’s an opinion: I gave reasons for my position, assumptions are not things you give reasons for.
I get that some here are maybe reading this as “I know what you need better than you do”, so let me double clarify.
When it comes to currency, whenever there are changes like banknote to coin, decimalisation, cotton to plastic or removing 0.01 and 0.02 coins, etc etc people complain a lot in the run up to the transition, then it happens and no-one cares. Pretty soon no-one can imagine going back.
So that’s one reason I’m saying, in my opinion, if the US had switched out the $1 bill few people would be reminiscing about the convenience of it now. Instead they’d be grimacing whenever they saw natty old bills in old movies.
This isn’t what happened in my part of Canada. Machines were mediocre at recognizing bills in good condition. All were easily changed to accept new coins of different weight, since they already accept coins. I don’t know any that don’t take toonies, though on campuses some now take plastic, perhaps since they sometimes charge north of four bucks for a beverage or snack.
That’s what we did in Australia even before the polymer banknotes. Got rid of 1c and 2c pieces and the $1 and $2 note and introduced $1 and $2 coins. If the value of a purchase came to a number of cents you just round it up or down to the nearest 5c.
And this is the opposite of the point that I was making earlier. If what “the American public” wants is the basis of every policy decision, then what you have is a super-democracy that is invariably going to be short-sighted or just downright stupidly uninformed, with policies focused on mostly doing nothing, on the lowest possible taxes, policies that give people free money, and environmental neglect to the point of catastrophe. Sometimes doing the right thing is different from doing the popular thing. Eliminating low-denomination banknotes is not a huge deal one way or the other, but it’s objectively better because it saves the taxpayers money that can be put to better use, without actually inconveniencing anyone much or at all. The alleged problems with coins are more imaginary than real, and are mostly fabrications by those resistant to change (no pun intended).
Actually, sez Great Britain, Canada, Australia, and a few dozen other countries that I can’t be bothered looking up. The smallest banknote denomination is £5 or $5.
Well, i prefer dollar coins. I’ve used them in Europe and in Canada, and i think they are way more convenient than crumpled bills. But i never used them in the US because i never got them in change. I don’t want to carry twenty of them around, i want to break a twenty, and have a couple of $5 and a couple of $1 coins in my pocket until i spend them and have to break another twenty.
So i think they never caught on with the general public because the general public never had a chance to use them.
I’ve heard both that there wasn’t a slot for them in cash registers and that they were too similar to the quarter (because vending machine companies didn’t want to have to swap in a larger coin feeding mechanism.)
So i don’t know. But what i DO know is that we don’t actually know what consumers prefer, because consumers never got a real choice.
Your opinion is supported by the experience of other countries that did exactly that, and followed up with abandoning the $2 note as well. The whiners whined, the transition happened anyway, and now everything is back to normal again with a better system.
Better make sure Tucker Carlson doesn’t hear about how well Canadian money survives the washing machine, he’s likely to report Canada is a haven for money laundering operations.
