WHY should the US use more coins?

I’ve seen arguments that the US should follow the example of many other countries and rely more on coins for day-to-day transactions. In Europe, for example, the smallest paper bill is the €5, which is worth about $7.50. Seven and a half times the value of our smallest note.

We could eliminate the $1 and $2 bills (as well as the penny, nickel and dime, but that’s another thread), and introduce a $2 coin. Hell, if we really wanted to be progressive, we could also eliminate the $5 bill, and introduce a $5 coin.

My gut feeling is that this would be a good change*. But I have trouble articulating just why this would be good. I can only think of one objective reason: in the long run, it must be cheaper to mint coins than print bills. A $5 coin would last for 50 years, but a $5 bill must be destroyed and reprinted every 18 months or so.

But there are also subjective reasons that are harder to articulate. When the currency system was conceived, you could get through your day-to-day spending without ever pulling out a paper note. You could buy a meal, pay for a haircut, hire a taxi, etc. without ever using paper money. That feels like a better system to me. Is it?

What are the arguments in favor of basing more of our (Americans’) day-to-day transactions on coins? Arguments against?
*No pun intended. I swear to god.
Old threads on similar topics:
One and two dollar bills? or coins?
New $1 coins - here we go again!
How would you redesign American currency?

Right now, we can pay for everything in bills, and clean out the coins when too many accumulate in the bottom of our purses (this is what I do). I think that’s better than having to futz around with coins.

I use my credit card instead of cash whenever I can, so it doesn’t really matter that much.

How about this:

Would you accept a 25 cent bill? Of course not. So what’s so special about 1 dollar that it has to be a bill? Especially if, if you really think about it, in purchasing power terms a dollar today is worth what a quarter was a few decades ago.

The fact of the matter is, the U.S once had a commonly-used dollar coin. It was called the quarter.

I don’t carry change, ever* - it’s a pain in the butt. Paper stores more value in a much smaller space per unit and can be kept sorted for convenient access in a way that coins can’t. Why do you think that avoiding the use of paper money would be a good thing?

  • On the relatively rare instances that I pay with cash and get change back, I just dump it in my pocket to pile on my dressertop and ignore forever thereafter. It’s certainly not worth holding up the line to dig out and count out pennies when just handing over another dollar is an order of magnitude more convenient.

It saves money for the US mint. If you want your hard earned tax dollars wasted on printing paper money, go ahead, but if you think the your money is better spent minting coins, then you must be one of those weird folks who believes that fiscal responsibility is something the governmaet should oppose at every opportunity.

I’ve wondered if there’s a psychological thing with people finding coins easier to spend. Since we’ve had the $1 and $2 coins in Canada, I find that spending them feels less like I’m spending actual money. If I’m at the mall, I might buy a coffee or something on a whim if I have a toonie for it, where I wouldn’t if I only have bills.

The purpose of switching to coins is purely cost. Coins last much, much longer, and so would save the government a great deal of money.

That’s pretty much the one and only reason countries are going to coins. Canadians weren’t very happy about going to a $1 coin, but the government stomped ahead with it anyway, because it saved a lot of money - hundreds of millions of dollars.

I will echo RickJay. This is why you should switch to a $1 coin:


The only reason the US is not saving $500 million per year, is that some people don’t like change. (pun intended)

The way the government should accomplish the change is simple - start producing lots of $1 coins, and slowly remove the bills from circulation as they wear out. Tell people that this is the way it is going to be. Put out a few ads that show grumpy old incontinent men complaining about it, and imply that all complainers are old fashioned and pathetic. Let people know that if they don’t want the dollar coin, then they are in favor of wasting $500 million per year.

Despite being strenuously opposed to coinage, the existence of debit makes it hard to care about this. Let 'em make cash inconvenient to the point of worthlessness if it’ll let 'em save a few (billion) pennies - I’ll just use it that much less.

This is not to say that there are any *other *reasons to switch to coins aside from cost. There aren’t. But whichever.

Here in Oz, we are a country that has gone down this path. I doubt anyone would want to go back. The smallest note is the $5, and we have eliminated 1c and 2c coins. People like the $1 and $2 coins. They are small, and you can find you have a quite useful amount of money in coin form. For vending machines, parking meters, and many other uses the coins are very convenient. Objections about having ever more coins in your pocket/purse don’t actually make sense - so long as you eliminate the useless low denomination coins.

I always find it quite odd how in the US there is an entire second tier currency of grubby worn one dollar notes. The fact that you can tip with a note, and still be appallingly stingy, is perhaps something in their favour.

As society moves to a cashless base for many more purchases, the pressure for coins may well actually increase. Cashless is a pressure pushing out notes, but it doesn’t help so much when it comes to more trivial purchases. The infrastructure needed for widespread micro-payments may simply be too costly for its return. So a breakpoint where automated coin based machines are good for low value purchases - vending machines and the like, and electronic transfers for higher value. With a breakpoint of (say) about $10 that would suggest that $1,2,5 coins might be a very handy way of going.

Aren’t there? I guess that’s the central question here. How about this:

With the current system, any time you want to make a purchase, you have to deal with two kids of currency: notes and coins. That is to say, you hand the cashier a bill, and he hands you back a few more bills, and some coins. Usually putting the bills flat in your hand and dumping the coins on top of them. You then have to distribute the bills into your wallet, and put the coins into whatever you use for coins.

If we made coins more valuable, you would tend to have more transactions where you hand the cashier coins, and he hands you back coins. This simplifies the transaction for everybody.

See? Benefit!

I assess the cost of counting out coins to exceed the benefit of not having to slide bills into my already-open (since I paid in cash) wallet, especially since the counting must be done before the purchase, slowing the line, and the storing of the bills is done afterwards. (The effort to slide the coins into my pocket remains the same, of course). So it sounds like a net loss to me.

Nice try, though, and yes, that is the sort of thing this thread is asking for. You could also maybe make an argument that the vending machine manufacturers would prefer larger coins; I think I heard somewhere that coin sorting is easier than verifying a dollar (though I’m not sure of that). I would expect them to grumble during the transition period, though. Regardless, this still isn’t a benefit for the consumer.

Yes, Canada switched to dollar coins by the simple expedient of not making $1 bills any more. Ditto for $2 bills. They made them (unlike Susan B Anthony) a fake gold color to tell the difference between quarters and dollars. The Toonie ($2) has a gold center and silver outside. So much more convenient.

One of the biggest pushes for them was vending machines. Almost nothing in Canada has bill changers; everything is coin operated, since the smallest bill is a $5. (And there’s the occasional push to dump that, as well as the pennies.) You can accumulate some serious money pretty darned fast when you change comes in $2 lumps. It’s the small coins that are annoying. I do find it amusing that the USA has those frequently argumenative bill-changer machines for simple $1 purchases.

Australia and NZ have dumped the penny; everything is rounded to the nearest ickel, or whatever it’s called over there. (fi’pence?)
There’s the joke that when the one-pound coin came out in Britain many years ago, the wags suggested it be called a “Thatcher” - because it’s thick and brassy and thinks it’s a sovereign.

I think you really have to have lived outside the US to appreciate how much easier and more convenient $1 and $2 coins are.

I still cannot even begin to fathom why you guys still have 1c pieces, for example. You can’t buy anything useful for 1c anymore, after all.

$1 and $2 Coins are easy to carry, worth a useful amount, and they’re generally very handy for vending machines, parking meters, and that sort of thing. Once you get used to the idea of looking in the change pouch in your wallet for $1 and $2 coins for small purchases, you find they’re a lot handier than having a wallet stuffed with notes that aren’t actually worth that much.

5c pieces don’t have nicknames in Australia or NZ, FWIW.

That isn’t how it would work.

Let’s say you keep your coins loose in your pocket. And let’s say you just bought a sandwich for $5.50.

Current system:
Step 1: Pull out your wallet. Open it. Select the $10 bill. Or two fives. Or a five and a one. (Note that you have to make sure you’ve got the right bill, etc.)
Step 2: Hand it over.
Step 3: Receive 4 one-dollar bills and two quarters.
Step 4: Put the bills back in your wallet.
Step 5: Dump the coins in your pocket.

Proposed system:
Step 1: Pull out your pile of coins from your pocket. Open your fist. Select the $10 coin. Or two $5 coins or whatever. (Note that you have to make sure you’ve got the right coins, etc. This step is no more effort than with bills.)
Step 2: Hand it over.
Step 3: Receive 4 one-dollar coins and two quarters.
Step 4: Dump that all back in your pocket.
Step 5: There is no step five. You’re done. Enjoy the sandwich.

That’s great. It reminds me of the Canadian toonie also being called the “moonie” because it has the queen on the front with a bear behind.

Australia got rid of the one and two cent coins in 1991. The lowest denomination coin in Australia is currently the five cent piece. New Zealand has gone even further and discontinued the five cent coin. Its lowest denomination coin is now the ten cent piece.

As for the one and two dollar coins: the experience in Australia was similar to that in Canada. The Reserve Bank held an inquiry into the idea of eliminating the one and two dollar notes and replacing them with coins. On balance, as RickJay notes, the cost savings resulting from the longer-lasting coins were considered to outweigh any costs of conversion. So production of the notes was ended, and we all switched to coins, with minimal fuss.

My bills are sorted. No digging around.

And around here that sandwhich will cost $5.83 (sales tax). So, I get back 4 dollars, a dime, a nickel, and two pennies. So, the next time I have to pay for anything, I have three times as many coins and types of coins in my pocket. As the purchases continue, the size and assortment of my pocketful of metal will increase, with increasing pressure to try to use some of these damned metal filings, leading me to start holding up lines trying to pay in exact change just to get rid of it.

If you were only using these things for exact purchases with prices that with tax were all multiples of 25 cents, that’s one thing. But that thing doesn’t much resemble reality as I know it. Even the vending machines around here charge $.65 or other similar cockeyed amounts for things. (No pennies though, which is something at least - but not enough to make me want to mess around with coins.)

With Ted Kennedy gone, the likelihood that the US will ditch $1 bills is more certain. The big reason why $1 bills persisted for so long: his lobbying on behalf of Crane Paper, which is in Massachusetts.

First, I only pay with coins when there is no line of people for me to be holding up – I’m the only one at the cashier. It happens more often than one might think.

Second, I use coins all the time, for example in vending machines and parking meters.