Unless I'm reading it wrong, they do think of it that way (on coins at least):
>Fortunately, dimes and quarters are cheaper to make, costing less than their monetary value. So the Mint makes up the losses incurred on pennies and nickels with its 10- and 25-cent coins, and last year reported making $391.5 million in seigniorage.
Also, paper money isn't produced by the Mint, it's produced by the Bureau of Engraving & Printing
The author of the article thinks of it that way, but I have to think the article is written from a misguided premise. The Mint may publish those numbers in the form of a balance sheet as a novelty, but as far as I understand, they don’t govern the money supply any more than the Bureau of Engraving and Printing does. Their scope is to strike currency, and I would think the exact monetary value of it is immaterial to that mission.
Seigniorage used to be an important revenue generator for governments. This has largely subsided with the transition to bank notes which don't operate under the same market dynamics. But the historical inertia is still there.
"Making" and "creating" are pretty ambiguous here.
The mint literally creates physical money (coins). But in the end, the government actually does generate revenue, that gets calculated into a profit or loss for the country:
$100 bills DO generate profit. Pennies generate a loss. If you look at all of the currency in aggregate, it generates positive revenue for the country.
$100 bills do generate profit for the person printing them, but in aggregate they inflate the currency as a whole. This inflation, in theory, cancels out the wealth "created."
So when people print money, they aren't generating any wealth - it's just a wealth transfer from people who have paper money to the people who print it.
$100 bills generate close to 0 profit for the United States Treasury as they are sold to the Federal Reserve Banks at manufacturing cost.
However coins are sold by the United States Treasury to the Federal Reserve Banks at face value and can generate a profit/loss based on the difference between the face value and the cost of manufacturing.
For some acceptable price yes. This isn't unbounded though. At some point they most certainly would stop producing a unit of currency if it cost way too much vs it's value.
Yes they did make $98.50, and it is profit. The job of the Mint (and the Bureau of Engraving & Printing) is to use the monopoly of seignorage to make money out of thin air. As much as there is demand for coins and bills, they will sell into the market. The job of maintaining (the value of) the US currency is in the hands of the Federal Reserve.
Pennies are not effective as currency. You can't use them in places you typically use coins (parking meters, vending machines, automated road toll collection) so we're using tax dollars to fund the creation of useless zinc circles.
So get rid of them. At one point in my life, a long time ago, things could be purchased for a penny. That time has long passed. Now pennies are used just to make the math work out. Round everything up a nickel ($0.05) and call it a day.
Or look at it another way: inflation has made the nickel from my youth into today's penny.
What can you buy at a shop with just a nickel? I don't think I've purchased any item at a shop for less than ten cents in my thirty years; and it's rare to see anything that costs less than a quarter.
I remember buying some of these inidivudal sour patches candies at a local deli for 10 cents a pop about 10 years ago. I wonder what the price is now. Probably a quarter I'd guess.
I used to buy Bazooka bubble gum for 5 cents from the store as a kid in the early 90's. Since then I can't think of anything else for that amount of money
Argh. It used to be 2¢ in the late 70s. My 9 year old self went in to buy 50 pieces with my birthday dollar bill - and on that day learned about sales tax. (Tax was $0 on a single piece, 8¢ on 50...) I asked the guy to ring me up 50 times, but he declined...
The camp store at a place we go every year still has candy that is 5 or 10c. They also have mini tootsie rolls that can be purchased for 2-3 cents (used to be 1)
No. Most purchases are not made with cash and fewer people are using cash every year. You're basically saying that all consumers should pay more with every purchase so that the mint can make <2% more revenue, a negligible amount in relation to the federal budget.
I bet in general it would save money. Many things price ends in .99 to trick people into thinking it is cheaper. All those things would switch to .95 in order to preserve the trick.
That isn't the point; he's talking about the psychological difference we ascribe to seeing gas pegged at $4.00 a gallon versus a mere $3.99, since the first digit is the most significant.
Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping.
(And actually gas stations take it a step further. The $3.99 you see on the sign isn't the actual price, it's $3.99 + 99/100 cents. If you look closely, you'll sometimes see the extra fraction of a cent in superscript.)
> Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping.
I grew up on the border of Maine (sales tax) and New Hampshire (no sales tax). There, tax is frequently used as a metric for comparison shopping. In fact there’s an entire street over the bridge into NH colloquially known as “gasoline alley.”
Then if we could pass a law mandating that prices be displayed inclusive of sales tax, that'd be great. One of my favorite parts about going to Europe is being able to add up prices in my head and have it match up exactly with the final total. The US system is nonsensical and shouldn't be used to justify other nonsensical policies like the continued use of the penny.
The problem with all prices being shown inclusive of tax is that the amount of the tax becomes forgotten over time. By having tax added and called out on the receipt at the register, everyone is reminded many times per day how much sales tax they're paying.
For bricks and mortar stores, if the majority of people due to pay the tax are capable of rounding up a posted price of $fee + tax, the minority eligible for tax exemptions are capable of rounding down a posted price of $fee - tax
Might be a little different for online stores where tax can't be calculated until they know which of the many different local tax codes the sale is being made under, but as you've already noted computers can handle updating the price before people confirm the purchase.
European online retailers that expect significant sales to both businesses and consumers (e.g. computer components) either show both prices with different fonts, or have a button somewhere to switch between with- and without-VAT prices.
Except for businesses, there isn't the situation as in the US, where the retailer is responsible for verifying that a customer is tax-exempt. People on the equivalents of food stamps pay the VAT; yes the money just goes in a circle back to the government, but it's probably easier accounting for everyone.
Nothing is stopping you from having the computer back-calculate the tax and display it on the receipt. I seem to recall the ones I got on my last European trip showed the VAT as a separate line item despite the price tag including the VAT. I mean, isn't that the whole point of having an electronic POS.
The problem is that there are a lot of situations in which tax is exempt and/or variable depending on the customer.
i.e. Joe Sixpack is going to pay 7% on his loaf of bread, but Jane Wicstamps buying the same loaf of bread with food stamps does not get charged any tax.
Additionally, some municipalities will do things like say there's a general 7% sales tax on everything, except groceries, which are taxed at 2%...until next year, when the general tax goes up to 8% and the tag on literally every item in the store needs to have the price adjusted.
We cope just fine with variable tax rates and rules for who pays tax in the UK. The general rule is that all prices are inclusive of VAT (sales tax), if you’re VAT exempt as is the case for many businesses then you claim that money back. Some businesses allow you to provide proof of VAT exemption and sell at the price before tax to avoid having to claim back.
For things that don’t have different VAT rates, such as food or children’s clothing, it’s the retailers responsibility to price that in - most people probably couldn’t even tell you which particular goods are VAT exempt.
What I've been reading in the comments about this story on reddit is Canada and other countries already did this (eliminate the penny) and the final price is rounded to the nearest nickel, not always up.
Cash purchases in Canada are indeed rounded to the nearest nickel; it is not always up. Credit/debit purchases are still to the penny, as there is no reason for them not to be. All cash purchases average out to no change over time, and I don't know anybody who misses pennies. I wish they'd drop the nickel next.
Non-cash transactions would still be commonly made in $0.01 increments. $53.47, for example. The difference is, if you wanted to purchase a dozen things that total $53.47 at a store, if you use cash, you'd end up paying $53.45 or $53.50, depending on the store's policy. Many may end up rounding down, what a deal! Or they'll choose to be greedy and trade in that goodwill for three measly cents.
Surely there must be a law outlining how rounding of sums will be done, rather than leaving it to the store owner's discretion?
(Here in Norway, we've gotten rid of the 5, 10, 25 and 50 øre (cents, if you like) coins since I was a kid; the smallest denominations coin now in use is the 1 krone.
Stores round like any mathematically inclined would -.01-.49 sums are rounded down, .50-.99 sums rounded up.
It’s actually the people who use credit/debit cards to make purchases who raise the prices on all goods/services for people who pay cash.
The average merchant pays 2.3-3.5% per swipe, as a result prices are increased across the board and passed on to consumers, no matter if they pay with card or cash.
Fair enough. But it doesn't follow that we should increase prices further by rounding up (as per the comment I responded to) because credit cards charge a fee.
Those costs have been driven down by Stripe and cash isn’t without its own costs. I used to favor cash myself but a couple of local businesses here recently started requesting credit cards because it’s cheaper than dealing with counterfeiting.
I had clients in the early 2000s with 1.9% rates, as well as one with 2.5% and no fixed per-transaction fee, and these were small mom-and-pop businesses - the Targets, Costcos, Apples, etc. of the world likely go way lower on volume.
Stripe's selling point was never low fees. It was "you can be up and accepting cards in just a few minutes of coding", and that was well worth paying an extra percent or so.
My friend, who owns a very cash heavy retail business, tells me that he pays the company that regularly picks up cash much, much less than what the credit card processors charge.
And in the Eu card issuers have been raising prices to defeat the recent clampdown on interchange fees which cost me almost £20 a month due to loss of rebates.
You claim this, but cash has its own costs. Such as running the risk of getting robbed, wrong change (and the retailer losing out), a safe, the costs and time included in physically getting the cash to the bank - either by employees driving it or paying a service to do it. Having enough change on hand can be an issue.
Now, I don't know if all of this equals out to the same as the credit card fees, but it isn't like cash is cost-free.
So are prepaid credit cards - the type you do not register. They can theoretically be hacked, but so can your bank account.
And it depends on what you are buying. Most stores have cameras. There are a slew of transactions that require ID as well. You generally need to show some sort of ID to get your cash as well - few employers will pay in cash. Major cash purchases are sometimes either refused or require ID and forms to finish.
And you are simply out of luck if you happen to lose it somehow. It can get damaged to the point of being worthless as well.
Then again they can offset these costs by having a much larger customer base (i.e. people without cash on them) from which to help them realize greater volume discounts.
Here in the UK, most banks charge business account holders about 1% when they deposit or withdraw cash. Add in the labour costs of cash handling, the risks associated with cash on the premises and (in many cases) the costs of a secure cash-in-transit service and it's potentially more expensive to take cash than cards.
Multiple studies have found that customers are more willing to spend and typically spend more per transaction when using cards rather than cash, so the merchant charge is usually a sound investment by the retailer.
You're basically saying that all consumers should pay more with every purchase so that the mint can make <2% more revenue
I basically said what I said. I want all consumers to pay more so I don't have to have pennies rattling around everywhere, which I eventually accumulate to the point that it's worth going to bank to get rid of them.
You mean tack on 2-3% processing fees on every transaction?
is quite self-centered.
* ahem * . All I'm asking is $0.04/transaction at most, regardless of transaction size. But because you don't want to use cash, you'd like much more than four cents tacked on?
> You mean tack on 2-3% processing fees on every transaction?
No. The price you're paying at the store doesn't change for you just because you pay without cash. If you walk into Walmart or Target or a local convenience store, they're not changing all the prices at the POS if you pay in cash vs card. And your paying with cash isn't having a meaningful impact at reducing prices as a share of payment, cash is too far in the minority at this point and that's going to get worse.
Coins: the busy work of business, that's why they mostly switched to credit cards, for similar logic you're using regarding pennies.
Stores don't typically raise their unit prices when they decide to accept credit cards; they benefit from efficiency (and lack of theft) and receive more volume in sales as a result.
Canada has already phased out the penny. Electronic transactions are not rounded. Cash transactions are rounded to the nearest nickel. It hasn't been a problem.
As a customer you can 'abuse' this by paying with card when the price would be rounded-up, and cash when it is rounded down. But it's not really worth the effort.
It's always worth paying with a card, as you can get 2% cashback with a decent card. Even if you purchase something for $1, you'll get at least 2c back.
Coins seem largely used anymore for tax. How common would any coin smaller than a quarter be without a percentage-based sales tax? Virtually every price is close to either the $.50 or the $.00 mark -- it's the tax that creates the need for more combinations of change.
Most soda machines are charging $0.60 or $0.65 these days. Rounding to either $0.50 or $0.75 would be annoying.
That said, I think it'd be totally reasonable to eliminate all coins other than the nickel and quarter.
(If I really had my way, I'd also eliminate dollar bills (replacing with a dollar coin that doesn't suck, replace with some more valuable and small.... like dime-sized pure copper. Then eliminate all bills except the $5, $20, and $100).
I was with you until you wanted to eliminate cash in favor of more coins. How is someone supposed to carry those in their wallet? Many use thin wallets or money clips for card/ID/cash. Plus if I'm leaving someone a tip, I'm sure they'd hate to have their pockets jingling while they serve food or valet. Cash is also a lot easier to count, flip through, harder to lose.
The entire EU eurozone manages to do it. There's a 1 Euro note, but I've never seen it and as far as I know nobody uses it. Using 1 and 2 euro coins works great. I personaly just keep them in my pocket. I don't think jingling is a real problem.
Same goes for the UK and the pound. Nobody uses 1 pound notes.
I'd be happy with only going down as far as quarter dollars. There's a convenience store in the lobby of my building and the guy prices everything rounded to the nearest quarter. It makes everything faster and easier.
> Round everything up a nickel ($0.05) and call it a day.
This already happens at convenience stores around the country, too. The "pennies for everybody" trays are the physical manifestations of our collective irritation with the penny. I know I only ever get change back rounded to the nearest 0.05 because I always leave my pennies in the tray. And since I often never have pennies, I'm only prepared to make transactions to the nearest 0.05.
Many of us are already doing it, but just in a roundabout way that requires more effort for no reason.
yep i mean not even just the trays but a good %age of small local businesses (ie basically everywhere where employees feel like they have the latitude) will chop the pennies off the price in the name of sanity. so literally everyone involved hates pennies so much that they will willingly give them away. better keep minting them at all cost (literally)?
ahh maybe it’s just a way to keep prices “fair” for cash users, since businesses have to pay interchange on card transactions but charge everyone the same price? (/s)
10%? Try a bank; at least in the US I've never been charged, and for how often those jars fill up it's worth a Saturday drive to the bank once or twice a year.
Gas is a fluid, so it doesn't matter. Even if it costed $99.999, rounding is made after multiplying by the volume purchased, compounding that insignificant value into a real change.
That's what Australia did ~2 decades ago. There used to be 1 and 2c coins; they were seen as useless, so they were axed. All prices are rounded up to the nearest 5c.
I find it easier to manage a jar of coins on my nightstand, than a wad of cash with a bunch of half-crumpled 1-dollar bills. It's not like I need to carry a bunch of small denomination currency anyway.
The 1 and 2 dollar coins are larger and are made of different materials so it's not hard to pick them out of the jar if I want to use to pay for coffee or something.
But instead of keeping your cash in a wadded-up crumple, you can neatly stack them and slip them into a wallet, or neatly stack them and fold them in half and put them in a money clip. Coins are a lot harder to compress.
If I'm going to use cash, I'd rather keep loose change in the pocket and keep my wallet as thin as possible. $1 bills have a tendency of taking volume in my wallet.
The greatest thing about this comment (besides being a fact and a very valid point) is that it comes second after a bunch of apparent Americans fighting over why the penny can’t or shouldn’t be removed as though nobody knows what it would really be like.
I have American friends and co-workers and I continue to be amazed that smart people can’t look across the border and say “Oh, that works” and copy.
Canadians can be almost as blind, the recent battle to legalize marijuana was a good example, I can’t count the number of times I said “that’s not what happened in the US”
Health care is particularly bizarre. I’ve had Americans tell me about Canadians dying in droves in Emergency Rooms while standing on the shore of the St. Lawrence. I felt like screaming “Canada is right there, you can see the flags!” How could they know so little about us when they shop and go to the theatre in Montreal?
They've done some of that in the past. The United States had a half-cent coin until 1857. When it was coin was eliminated, it was more valuable than the penny is today[1].
There is also a US $1 coin. They were widely used in Equador when I visited in 2005, because their currency was pegged to the US dollar. I spent a day in Miami on my way back home and I left a few as tips. People were very confused by them. It seemed kind of funny to me that a US coin was more commonly used outside the US than inside.
When the half penny was decommissioned in 1857 it was worth the equivalent of 10-15 cents in today's dollars. It was decommissioned because inflation had made it nearly useless and the metal was worth more than the coin.
We should get rid of everything below the quarter. All we need are some rules for rounding up (or down). Then we could also drop the $1 dollar bill for a coin. A lot less confusion with only two main coins in circulation.
We've had $1 coins for a hot minute. You can almost only ever find them at the bank, post offices, and some other government places (the Sound Transit ticket kiosks here in Seattle spit them out, I found out last week), but they exist.
We also have/had a 50c coin, but it's huge and I believe out of circulation these days.
I think we have a similar problem here in the UK with 1 & 2 pence coins costing more than what they are worth.
It's not entirely clear though as The Royal Mint doesn't reveal their production costs, but it really wouldn't surprise me if making the 1/2p coins run at a loss
There are people storing up closets full of the old full-copper pennies waiting for the day that the penny is discontinued and they can get scrap value that is higher than the face value. For now they aren't allowed to deface money so they're just storing them. I don't even know if it's worth the time spent sorting, but everyone needs a hobby.
Additionally, they're a real pain to melt down profitably, even if it were legal. It only makes sense at very large scale, which means only the companies that invest in big foundries will be making real money if it ever becomes legal to use copper pennies for copper.
A good analogy would be like collecting aluminum cans XD
So Europeans were sending 2 euro coins for recycling to China. The kind with two metals, white metal in the center surrounded by a yellow metal ring. To destroy them first, they just punched out the center inner white metal. Enterprising Chinese recyclers, instead of melting the metals, were putting them back together :)
When I visit America, pennis are the most useless thing to carry out. All they do is add tons of weight and bulk in change without providing any utility.
Am I the only one who views pennies like an extreme annoyance? I would rather throw pennies in the trash than have them. They are literally THAT worthless. They take up far more space and weight than they offer in value. It seems like such a massive waste to continue using valuable metals to create something so worthless.
Honestly, I think quarters should be the only coin we have.
Yes and no. No in the sense that you not the only one to see pennies as an extreme annoyance, they really are. But you are alone thinking the annoyance is easy to get rid of.
They are a very good reminder of the currency history/direction, and cheap if you think about the consequences of letting this go unchecked.
I've moved beyond that. I discard all change, ruthlessly. If there's somebody nearby who wants them, I give them the whole handful of change. Otherwise it all goes in the trash on the way out of the store.
Used to wear holes in my pants pockets, get stuck in dryer etc. Cost more than it was worth, in wear and tear, and in emotional energy to manage it.
You can't imagine the freedom you feel when you discard your first handful of change! Just toss it and walk away!
Most people in the country live in cities though, so it's not really unreasonable to be surprised that some people never encounter the extremely destitute. Maybe it is you who should leave your bubble of wealthy suburbanites?
I live near Iowa City. I encounter several folks wanting a donation every time I go downtown. A couple I know, I always put a buck or two in the can and pass a comment on the weather or whatnot.
Pretty much anyone who doesn't live in a major city doesn't encounter homeless people on a daily basis. I maybe see one or two a month, and they're usually holding a sign up at a busy intersection. Our downtown areas don't really have them, usually.
The only time I've encountered someone begging for change this year was when I went to larger city for a convention a few weeks ago.
>I wonder where these people live where they don’t experience homeless people begging for their change daily.
As someone who lives in New England, I personally never see any homeless people unless I'm visiting a major city like Boston. Even then, the amount of homeless there is shockingly low compared to the amount I saw in Madrid when I visited Spain and strongly suspect this is due to the climate and population (I presume this is the same reason for California's homeless problem, though housing costs might be a larger factor).
Frankly the fact that you seem to assume everyone passes homeless people daily is very "out of touch" in itself.
> You can't imagine the freedom you feel when you discard your first handful of change!
I get this from gambling, actually. A $20 haircut or $30 dinner feels like nothing compared to blowing $2300 at a casino so I never complain about petty expenses. It annoys me to hear people in my life (who have healthy incomes) complain about the costs of things or talk about saving a few bucks at costco. It just doesn't matter.
None of my friends gamble. So you're correct they don't have my perspective. But I don't make money gambling either, so we make about the same amount. And I know that saving $3 on strawberries at the grocery store isn't going to make or break them so it seems irrelevant and petty to even talk about.
The thing is, though, small differences in daily spending do matter, when summed over your adult life, and can make a meaningful difference in when (or whether) you can retire, especially if your savings rate is near zero. But sure, if you're tossing away thousands at a time for fun, then you've probably got some lower hanging fruit you can cut than saving a bit at Costco.
If the trash has a flat top, I leave it on top. Otherwise, gone. Any other behavior means, again, investing emotional energy to figure out what would be best. And my whole point is to be free.
As a numismatist, I cringe. But I also understand the frustration.
I actually enjoy getting coins. I always check them for key dates. For example, any quarter or dime 1964 or older has a decent amount of silver content, and can easily be flipped for a couple bucks each.
Im in a similar situation. I keep quarters since they are occasionally useful, but in general when lose change becomes an annoyance i chuck it in the closest baristas tip jar.
Same. And maybe I'm(we're) out of touch, but some people act so shocked like I'm a crazy person or generous, I'm not sure which. Change is a hassle. It gets stuck in my keys, falls out everytime I change positions, etc etc. That said, I pay mostly by card these days so it's like like I'm giving away tons of change per year.
They are so not worth hurting my fingernails trying to scoop them up from my cup holder. I either put them into the little container some shops have next to cash register or I just throw them in the trash.
Quartz is really owning this genre of badly misunderstanding what the mint does. The cost of manufacturing coins is an expense that has no bearing on the denominated value of the coin.
The point of currency is to facilitate commerce and pennies don't do that. You can't use them in parking meters or vending machines (for example) so we're spending tax dollars to create objects with no function.
I've joked to my pals that if the POTUS (a) eliminated the penny and (b) moved gov't to A-series(ISO 216) paper sizes (biz would then follow) at least then I could feel this presidency is a net (aggregate) neutral from a utility PoV.
A nickel is fine-grained enough for current goods pricing.
While we're at it, let's get rid of the dime, too. They are too small to fish for in pockets and purses. In fact, one famous US retailer has a policy of not stocking dimes in their cash room because the founder believed "dimes lose money."
Here in Canada we got rid of the penny some years ago. If you're paying with cash, the total just gets rounded at the register. Honestly I don't miss it.
A durable, historical, innovative new channel that also makes minting pennies profitable. Everyone loved collecting those state quarters they made a few years back.
Of course, if this is successful we can move upstream to other coins and eventually dollar bills. Alternatively, we could allow rich people to put their face on the penny instead of that old president guy on there now.
Just the media exposure alone to be the first company to sponsor the penny would probably yield a positive ROI.
And think about how jealous the CEO of McDonalds will be when forced to dispense Burger King branded coins from their automated robot cash registers.
We still have the penny because Jardin Zinc Products (the manufacturer of penny blanks) lobbies the government and pays for astroturf campaigns to keep the penny.
I throw all pennies and nickels away or leave them with the cashier. I don't pay with cash all that often so it adds up to a few dollars a year.
One wonders how much retailers spend paying people to fetch pennies and nickels as change, or waiting for people to dig out the right number from their pocket or purse. I am sure it is an order of magnitude larger than $69 million.
Obama's only objection to removing the penny was Abe Lincoln. Let's put him on the dime, and Roosevelt on the $20, and Jefferson on the $50, and Grant on the $2. Andrew Jackson's descendants may have tears, a trail of tears.
How about we forget the insane idea we need to divide the dollar into 100 parts and back it off to 10 making the dime the new penny and getting rid of the whole 1 and 5 cent steps.
So, it gets rid of of the penny, nickel, and quarter. We could save a lot of money just by converting the 1 and 5 bills to coins.
I don't understand what you mean. They removed the paper money the explicit said "this is good for one silver dollar and can be exchanged at the US Mint at any time" (those were called "Silver Certificates" and look a lot like the dollar bills around nowadays, without the promise. Now it says "backed by the faith and credit of the US government" (or similar) ....so "backed by a bunch of hot air" basically.
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[ 4.2 ms ] story [ 257 ms ] threadThe purpose of the mint is to maintain the US currency. It's a cost center, not a profit center.
>Fortunately, dimes and quarters are cheaper to make, costing less than their monetary value. So the Mint makes up the losses incurred on pennies and nickels with its 10- and 25-cent coins, and last year reported making $391.5 million in seigniorage.
Also, paper money isn't produced by the Mint, it's produced by the Bureau of Engraving & Printing
The mint literally creates physical money (coins). But in the end, the government actually does generate revenue, that gets calculated into a profit or loss for the country:
https://www.investopedia.com/terms/s/seigniorage.asp
$100 bills DO generate profit. Pennies generate a loss. If you look at all of the currency in aggregate, it generates positive revenue for the country.
So when people print money, they aren't generating any wealth - it's just a wealth transfer from people who have paper money to the people who print it.
However coins are sold by the United States Treasury to the Federal Reserve Banks at face value and can generate a profit/loss based on the difference between the face value and the cost of manufacturing.
Or look at it another way: inflation has made the nickel from my youth into today's penny.
Not that I've ever gone in and tried to only buy a single washer. I'm guessing the old guy might just smile and say "it's free."
Or galvanic corrosion.
https://www.frbsf.org/cash/files/figure-3-2015dcpc-share-of-...
Tax is always going to be the same no matter which station in town you use, so it's not a useful metric for comparison shopping.
(And actually gas stations take it a step further. The $3.99 you see on the sign isn't the actual price, it's $3.99 + 99/100 cents. If you look closely, you'll sometimes see the extra fraction of a cent in superscript.)
I grew up on the border of Maine (sales tax) and New Hampshire (no sales tax). There, tax is frequently used as a metric for comparison shopping. In fact there’s an entire street over the bridge into NH colloquially known as “gasoline alley.”
Computers can deal with the latter, signage can't.
Might be a little different for online stores where tax can't be calculated until they know which of the many different local tax codes the sale is being made under, but as you've already noted computers can handle updating the price before people confirm the purchase.
Except for businesses, there isn't the situation as in the US, where the retailer is responsible for verifying that a customer is tax-exempt. People on the equivalents of food stamps pay the VAT; yes the money just goes in a circle back to the government, but it's probably easier accounting for everyone.
The till receipt or invoice breaks down the VAT element for you, and most places even pick out what is zero rated or exempt should you care.
https://en.m.wikipedia.org/wiki/Electronic_shelf_label
Every receipt breaks out the VAT and rate. Food, books and children's clothes (and a few other things) are exempt (UK).
All online purchases show VAT in the checkout and basket, and in the invoice after purchase.
i.e. Joe Sixpack is going to pay 7% on his loaf of bread, but Jane Wicstamps buying the same loaf of bread with food stamps does not get charged any tax.
Additionally, some municipalities will do things like say there's a general 7% sales tax on everything, except groceries, which are taxed at 2%...until next year, when the general tax goes up to 8% and the tag on literally every item in the store needs to have the price adjusted.
For things that don’t have different VAT rates, such as food or children’s clothing, it’s the retailers responsibility to price that in - most people probably couldn’t even tell you which particular goods are VAT exempt.
(Here in Norway, we've gotten rid of the 5, 10, 25 and 50 øre (cents, if you like) coins since I was a kid; the smallest denominations coin now in use is the 1 krone.
Stores round like any mathematically inclined would -.01-.49 sums are rounded down, .50-.99 sums rounded up.
The average merchant pays 2.3-3.5% per swipe, as a result prices are increased across the board and passed on to consumers, no matter if they pay with card or cash.
Merchant accounts have long been below that, they were just a pain to get, and generally required hardware from the bank.
Stripe's selling point was never low fees. It was "you can be up and accepting cards in just a few minutes of coding", and that was well worth paying an extra percent or so.
CNP transactions (which stripe does) cost bit higher than CP transactions which require POS machine at mom/pop shops.
Now, I don't know if all of this equals out to the same as the credit card fees, but it isn't like cash is cost-free.
And it depends on what you are buying. Most stores have cameras. There are a slew of transactions that require ID as well. You generally need to show some sort of ID to get your cash as well - few employers will pay in cash. Major cash purchases are sometimes either refused or require ID and forms to finish.
And you are simply out of luck if you happen to lose it somehow. It can get damaged to the point of being worthless as well.
Multiple studies have found that customers are more willing to spend and typically spend more per transaction when using cards rather than cash, so the merchant charge is usually a sound investment by the retailer.
I basically said what I said. I want all consumers to pay more so I don't have to have pennies rattling around everywhere, which I eventually accumulate to the point that it's worth going to bank to get rid of them.
Pennies: the busy-work of finance.
Asking everyone to pay more so you're not inconvenienced with change, even though you're asking for it by using cash, is quite self-centered.
If you don't like pennies, then just give them away as soon as they're handed to you.
You mean tack on 2-3% processing fees on every transaction?
is quite self-centered.
* ahem * . All I'm asking is $0.04/transaction at most, regardless of transaction size. But because you don't want to use cash, you'd like much more than four cents tacked on?
> You mean tack on 2-3% processing fees on every transaction?
No. The price you're paying at the store doesn't change for you just because you pay without cash. If you walk into Walmart or Target or a local convenience store, they're not changing all the prices at the POS if you pay in cash vs card. And your paying with cash isn't having a meaningful impact at reducing prices as a share of payment, cash is too far in the minority at this point and that's going to get worse.
Stores don't typically raise their unit prices when they decide to accept credit cards; they benefit from efficiency (and lack of theft) and receive more volume in sales as a result.
As a customer you can 'abuse' this by paying with card when the price would be rounded-up, and cash when it is rounded down. But it's not really worth the effort.
IMO Canada should've gotten rid of the nickel as well. One step at a time, I guess.
Most soda machines are charging $0.60 or $0.65 these days. Rounding to either $0.50 or $0.75 would be annoying.
That said, I think it'd be totally reasonable to eliminate all coins other than the nickel and quarter.
(If I really had my way, I'd also eliminate dollar bills (replacing with a dollar coin that doesn't suck, replace with some more valuable and small.... like dime-sized pure copper. Then eliminate all bills except the $5, $20, and $100).
Same goes for the UK and the pound. Nobody uses 1 pound notes.
(£1 notes still exist in Scotland, but since 2001 are only issued in small numbers for collectors.)
The soda machines I see charge $1.25. Where are you?
round(total price + tax) is the obvious solution to this. If you gain or loose 3 cents in the round off who cares.
Here is how other countries solved this ages ago https://en.m.wikipedia.org/wiki/Cash_rounding
This already happens at convenience stores around the country, too. The "pennies for everybody" trays are the physical manifestations of our collective irritation with the penny. I know I only ever get change back rounded to the nearest 0.05 because I always leave my pennies in the tray. And since I often never have pennies, I'm only prepared to make transactions to the nearest 0.05.
Many of us are already doing it, but just in a roundabout way that requires more effort for no reason.
ahh maybe it’s just a way to keep prices “fair” for cash users, since businesses have to pay interchange on card transactions but charge everyone the same price? (/s)
The same argument could be made for the nickel and the dime. (How many of us collect them in a jar, and pay a 10% royalty to turn them into dollars?)
We all know that the real reason we hold on is that we know the price of everything will go up. Skinflints!
I also admittedly rarely use cash.
What were 3 or 4 such things?
These things used to literally cost one penny, hence their name.
We’re not that dissimilar from the US but they seem to have an inability to make these kinds of systemic changes.
That said, I probably use cash a handful of times each year.
Getting rid of the penny was smart though.
The 1 and 2 dollar coins are larger and are made of different materials so it's not hard to pick them out of the jar if I want to use to pay for coffee or something.
We Americans are so stupid.
Canadians can be almost as blind, the recent battle to legalize marijuana was a good example, I can’t count the number of times I said “that’s not what happened in the US”
Health care is particularly bizarre. I’ve had Americans tell me about Canadians dying in droves in Emergency Rooms while standing on the shore of the St. Lawrence. I felt like screaming “Canada is right there, you can see the flags!” How could they know so little about us when they shop and go to the theatre in Montreal?
Zimbabwe could have invented the metric system, but they still have billion zimbabuwe dollar notes. One thing has no relation to the other.
The argument is not about comparing dollars to meters.
There is also a US $1 coin. They were widely used in Equador when I visited in 2005, because their currency was pegged to the US dollar. I spent a day in Miami on my way back home and I left a few as tips. People were very confused by them. It seemed kind of funny to me that a US coin was more commonly used outside the US than inside.
[1] See CPGrey's "Death to Pennies". https://youtu.be/y5UT04p5f7U
We also have/had a 50c coin, but it's huge and I believe out of circulation these days.
It's not entirely clear though as The Royal Mint doesn't reveal their production costs, but it really wouldn't surprise me if making the 1/2p coins run at a loss
Pennies and 2p became copper plated steel for the same reason. Pre 92 bronze ones are worth about double.
Coppers can't be worth keeping around much longer. I doubt even penny sweets still exist.
A good analogy would be like collecting aluminum cans XD
https://www.law.cornell.edu/cfr/text/31/82.2
http://www.spiegel.de/international/germany/precious-metal-s...
What is your height and weight?
Honestly, I think quarters should be the only coin we have.
They are a very good reminder of the currency history/direction, and cheap if you think about the consequences of letting this go unchecked.
Used to wear holes in my pants pockets, get stuck in dryer etc. Cost more than it was worth, in wear and tear, and in emotional energy to manage it.
You can't imagine the freedom you feel when you discard your first handful of change! Just toss it and walk away!
I have absolutely no question about what to do with my extra change.
This might top the list of most arrogant and out-of-touch HN comment threads I’ve seen.
Most places in the country? You appear to be in somewhat of a bubble - you really should get out once in a while.
The only time I've encountered someone begging for change this year was when I went to larger city for a convention a few weeks ago.
As someone who lives in New England, I personally never see any homeless people unless I'm visiting a major city like Boston. Even then, the amount of homeless there is shockingly low compared to the amount I saw in Madrid when I visited Spain and strongly suspect this is due to the climate and population (I presume this is the same reason for California's homeless problem, though housing costs might be a larger factor).
Frankly the fact that you seem to assume everyone passes homeless people daily is very "out of touch" in itself.
I used to give quarters, years ago; now I'll only give bills unless I don't have any.
Not SF, Seattle, or NYC? Here in the Eastside suburbs (Redmond/Bellevue), I'd have to make the drive to downtown Seattle to deposit my change.
I get this from gambling, actually. A $20 haircut or $30 dinner feels like nothing compared to blowing $2300 at a casino so I never complain about petty expenses. It annoys me to hear people in my life (who have healthy incomes) complain about the costs of things or talk about saving a few bucks at costco. It just doesn't matter.
But ironically I do keep my change!
A $30 dinner every day is $11k at the end of the year.
I actually enjoy getting coins. I always check them for key dates. For example, any quarter or dime 1964 or older has a decent amount of silver content, and can easily be flipped for a couple bucks each.
US nickels cost seven cents to make. Scientists may have a solution
https://qz.com/1316940/us-nickels-cost-seven-cents-to-make-s...
As the parent said, the manufacturing cost is orthogonal.
A nickel is fine-grained enough for current goods pricing.
While we're at it, let's get rid of the dime, too. They are too small to fish for in pockets and purses. In fact, one famous US retailer has a policy of not stocking dimes in their cash room because the founder believed "dimes lose money."
"A Penny Save is a Penny Earned - Chase Bank"
A durable, historical, innovative new channel that also makes minting pennies profitable. Everyone loved collecting those state quarters they made a few years back.
Of course, if this is successful we can move upstream to other coins and eventually dollar bills. Alternatively, we could allow rich people to put their face on the penny instead of that old president guy on there now.
Just the media exposure alone to be the first company to sponsor the penny would probably yield a positive ROI.
And think about how jealous the CEO of McDonalds will be when forced to dispense Burger King branded coins from their automated robot cash registers.
Having private banks print money is a lot different than selling ad space to McDonald's on your dollar bill.
https://www.leftovercurrency.com/wp-content/uploads/2016/11/...
http://www.post-gazette.com/business/businessnews/2007/08/15...
https://www.publicintegrity.org/2014/07/02/14959/saving-penn...
No real issues either (it still remains legal tender). Non-cash transactions are still denominated to the cent, the rest is rounded.
On the positive side the mint has more coin in their bank now!
One wonders how much retailers spend paying people to fetch pennies and nickels as change, or waiting for people to dig out the right number from their pocket or purse. I am sure it is an order of magnitude larger than $69 million.
Obama's only objection to removing the penny was Abe Lincoln. Let's put him on the dime, and Roosevelt on the $20, and Jefferson on the $50, and Grant on the $2. Andrew Jackson's descendants may have tears, a trail of tears.
At least you could give them to a homeless person or some children to buy some candy with or something.
You don't understand something very basic about life.
Waste not, want not.
Someday you may remember your actions if you ever end up broke and homeless.
Say what you want to about a various coins, but this is just stupid.
Does QZ think a coin is used just once? Coins average three decades of use. Reporting minting as if it has some sort of net loss or profit is idiotic.
(By that logic, how much revenue did the US Mint have last year from $20 bills?)
So, it gets rid of of the penny, nickel, and quarter. We could save a lot of money just by converting the 1 and 5 bills to coins.
HUGE DIFFERENCE.