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Phasing Out the Penny, Cost of Production Exceeds Value

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http://articles.moneycentral.msn.com/News/TimeToKillOffThePenny.aspx?GT1=8376

 

 

In May, the U.S. Mint informed Congress that the cost of making a penny and a nickel will soon exceed the actual value of each coin. Thanks to the high cost of materials that go into the making of the coins -- zinc, copper and nickel -- the Mint estimates that by the end of the fiscal year, the cost of producing one penny will come to around 1.23 cents, and the cost of making a nickel will be 5.73 cents.

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This is a pet peeve of mine.  Long ago Margaret Thatcher updated Britain's coinage at great savings.  They eliminated the 1-pound note and replaced it with a coin.  All the other coins were significantly reduced in size.  Their old dime, nickels and pennies were big and heavy.  Now they are thin and tiny.  Only the 1-pound coin is thick.  It makes sooo much sense once you see it in action.  Apparently the vending machine industry here has a strong lobby, as they are against any changes.

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I have a hard time understanding how we would phase out pennies; they're pretty important. Almost every store has merchandise ending in 99, 97, 49 cents, etc. Everything would have to be multiples of 5. Sales tax would have to be rounded up, and cause a huge surplus of money.

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actually they talk about this all the time, if you get your hands on pre 1982 pennies their worth about 1.79 c, beacuse they have more copper in them. to deal with the 99 c  items " Kolbe's 2001 legislation proposed that cash transactions ending in 1, 2, 6, or 7 cents should be rounded down to the nearest 5 cents, while transactions ending in 3, 4, 8, or 9 cents would round up. Credit and debit card transactions could still be valued to the nearest cent. "

 

http://money.cnn.com/2006/06/01/news/newsmakers/penny/index.htm

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This post is coming back from the dead.

 

Many of you have probably already seen this, but here is a really good explaination as to why pennies should be finished. Canada stopped producing pennies in May of this year.

 

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Guest j3shafer

This is a pet peeve of mine.  Long ago Margaret Thatcher updated Britain's coinage at great savings.  They eliminated the 1-pound note and replaced it with a coin.  All the other coins were significantly reduced in size.  Their old dime, nickels and pennies were big and heavy.  Now they are thin and tiny.  Only the 1-pound coin is thick.  It makes sooo much sense once you see it in action.  Apparently the vending machine industry here has a strong lobby, as they are against any changes.

 

I don't think you could make pennies, nickels, and especially dimes much smaller and not have them be a huge pain to keep track of. Nickels could maybe be made to be a bit thinner. Plus, Americans hate coins. There is a reason that the 50 cent pieces and dollar coins are not used by the majority of the country. Now, obviously, if the mint forced the issue we wouldn't have a choice.

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Can we PLEASE get rid of stupid pennies now? And while we’re at it, the nickel needs to go as well. This should have been done 30+ years ago. 
 

“National coin shortage may affect how you can pay at Meijer, Lowes and other retailers”
 

https://www.cleveland.com/metro/2020/06/banks-and-retailers-like-meijer-lowes-weather-coin-shortage-caused-by-the-coronavirus.html

 

 

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Why don't retailers price goods to the nearest dime then, and include the sales tax in the price!

 

My European friends always marvel at why we put up with price tags that don't reflect the actual price.

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It's going to be an uphill battle. Visa, MC, Amex, FirstData, and Elavon lobby the crap out of politicians to save pennies, nickles and dimes since they make people choose plastic more often so that they don't have to deal with worthless coins. Possibly the armored car companies too since delivering coins generates more work for them.

Edited by GCrites80s

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If we got rid of pennies, what would we use to flatten and stamp into cheap tourist mementos?

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If we get rid of the penny, we should definitely get rid of the nickel at the same time. Retailers can repurpose those slots in the till for dollar coins and half-dollars.

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15 hours ago, Foraker said:

Why don't retailers price goods to the nearest dime then, and include the sales tax in the price!

 

My European friends always marvel at why we put up with price tags that don't reflect the actual price.

 

I think that's in large part because their sales taxes are more national in scope, or at least state/province-wide.  It's tough to put sales tax into the displayed price of everything in the U.S. when the sales tax is different in every county.

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6 minutes ago, Gramarye said:

 

I think that's in large part because their sales taxes are more national in scope, or at least state/province-wide.  It's tough to put sales tax into the displayed price of everything in the U.S. when the sales tax is different in every county.

 

I pity the poor small businesses that can't afford the high tech required to create "local" price labels but still have to pay their sales taxes...

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As much as I'd like the price on the label to be inclusive of tax, the sales tax system in the US (by county) would have to be completely redone to make that feasible.  Which would make it exponentially more difficult to achieve.  Therefore, I believe the rounding method for cash transactions mentioned up-thread is the best solution.  Getting rid of pennies (and nickels) is a simple, effective way to cut wasteful government spending.  It's so frustrating that this didn't happen years ago.

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If you get rid of nickels you have to get rid of dimes as well actually and round to the nearest quarter since you would wind up with awkward amounts like 85 cents that you can't fix with available coins. Unless you add a 20-cent piece like the EU has. You'll be handing people tons of dimes all the time if you don't.

Edited by GCrites80s

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1 hour ago, GCrites80s said:

If you get rid of nickels you have to get rid of dimes as well actually and round to the nearest quarter since you would wind up with awkward amounts like 85 cents that you can't fix with available coins. Unless you add a 20-cent piece like the EU has. You'll be handing people tons of dimes all the time if you don't.


We would not have to get rid of dimes. Just handle that with rounding. It isn’t THAT complicated, especially compared to the tremendous savings it offers. 

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