Dollar Coin Program Ending

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Dollar CoinIt looks like the dollar coin program is dead and it’ll “save” $50 million a year. They’re killing it because there are tons of dollar coins sitting in vaults and it’s a waste of space and money. Unfortunately, had we gone to dollar coins instead of constantly using dollar bills, we’d have saved even more money over the long run (GAO said $5.5 billion over 30 years).

Why are the coins a failure? My gut feeling is that coins are just not popular. Coins are heavy, noisy, and more obviously dirty. How often do people drop their change in a tip jar by the register because they don’t want to carry them? I use a credit card on small purchases because I don’t want to get change. A cup of coffee? Swipe. Magazine? Swipe. To be honest, I don’t really like small bills either because I don’t need them because everything goes on a credit card. They’re dirty, they smell, and they take up space. I suspect that people don’t love the dollar bill, they just like them slightly better than dollar coins.

If the government really wanted to popularize dollar coins, they’d do away with paper dollar bills. We don’t have 25 cent bills or ten cent bills, why have two versions of something? People don’t care that a paper bill has an extremely limited lifespan because they don’t see the cost. If you want the dollar coin to work, you have to kill the dollar bill.

Why do you think dollar coins aren’t more popular?

(Photo: lrargerich)

{ 22 comments, please add your thoughts now! }

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22 Responses to “Dollar Coin Program Ending”

  1. Shirley says:

    In some instances a credit or debit card is not an option. I don’t carry much change because it is too heavy so I certainly would not carry 12-15 one-dollar coins.

    Can you imagine tipping a server with a $5 bill for a $5 sandwich because you don’t have two one-dollar coins on hand?

    While it would be economically correct, completely replacing the one-dollar bill with one-dollar coins to force their use would likely lead to the same in higher denominations and then to more check writing.

    • Strebkr says:

      Europe has the 2 euro coin. At first it seemed a little weird, but 5 or 6 coins can get you lunch or on a bus. I don’t carry coins in the states, but they seem to work there. Probably because the smallest paper bill they have is 5 euros.

  2. Glenn Lasher says:

    Like so many things, we did this wrong. The right way would have been to withdraw dollar bills when issuing the coins. Canada is proof that this approach is effective.

    • Aaron B says:

      Canada even gets along with $2 coins. While that would probably make people’s head explode here, I think if the US had bumped up circulation of the $2 bill, and eliminated the $1 bill, the dollar coin would be doing just fine right now.

  3. echidnina says:

    I think if people had only taken some time to get used to the dollar coins, most people wouldn’t mind them. I agree that the solution is to take the bills out of circulation – after some time, everyone would be fine with the coins. After my time in the UK (where there are £1 and even £2 coins), I actually prefer the idea of being able to pay for small purchases all in coins, and it’s kind of nice that your pocket change is actually worth something at the end of the day!

  4. ziglet19 says:

    I also agree that the solution is to remove dollar bills from circulation. I think the dollar coin didn’t catch on because people don’t like carrying around change.

  5. Kathy says:

    I never used dollar coins except as ‘tooth fairy money’. They just blend in too well with quarters.

    Even though larger coins might be a nuisance, I think they needed to make them larger than quarters to help them become more easily recognized. I suppose that would have made them not useful at vending machines though.

    But I do agree, if they d/c’d the paper $1 the coins would have been forced to be used more and might have become a permanent coin in the system. (People are stubborn but do adapt when forced to)

    • Shirley says:

      “… They just blend in too well with quarters.”

      I agree with you, Kathy. As a bookkeeper for a large supermarket for ten years, I can say that many dollar coins were mistakenly given and taken for quarters. Some of the older vending machines that called for quarters would even take them as quarters.

      As they became a bit more popular customers and checkers became more cautious and it was not at all unusual to overhear one or the other saying, “That’s a dollar.”

  6. Jonathan Ira says:

    Unlike the author, some of us are not so well off that we shun small change or even dollar bills. I like dollar coins and a local bank gets me as many as I want, which I spend on smaller purchases. When I first started spending dollars coins years ago, they were a novelty and many store clerks did not recognize them. Today store clerks accept them as a normal item of currency

    • ziglet19 says:

      I think the author was really just trying to say that he didn’t find them convienent to carry around.

      I had a few dollar coins recently, and went I used them at the drug store, the poor girl at the checkstand just seemed confused by them.

    • Strebkr says:

      I think you probably interpreted the authors text the wrong way. Anyone who has read more then an article or two of his knows he wouldn’t throw money on the ground out of inconvenience.

  7. JP says:

    I use dollar coins all the time, at the store, the vending machines at work, the bar, for tips, everything. If I get a dollar bill in my change [not often] it goes on top of the dresser until I go to the bank for more coins. The Treasury Department made a major misstep here and should have kept the program going so that we have a large enough reserve for when we actually do stop printing the bill.

  8. Dave says:

    I don’t think it has anything to do with coins vs. bills. The US $1 bill is an icon of our country. When I think of “money”, I think of the $1 bill with ole George on it. I don’t think that image can be replaced by a goldish coin with a native american on it, or whatever president that happened to be issued every few months. I think no one really wanted to give up the $1 bill because of what means, not because people didn’t like a coin…

  9. MikeZ says:

    I’d say they aren’t popular mostly because of businesses rather than the general population. I have NEVER received a dollar coin as change for something I bought other than the odd US Postal Vending machine.

    So even the most die-hard dollar coin fanatic couldn’t use dollar coins regularly without constantly going to the bank to get more. If you have to go to the bank to get them. I usually withdraw money from the bank in $100 increments so. The true comparison 5 $20 dollar bills, or 100 $1 coins? There is no real comparison there. Now if they went crazy an indtroduced a $20 coin, I’d give that a shot.

  10. Scott says:

    I would add to the argument that while introducing the dollar coin, they should have killed the penny too. So in a standard cash drawer, dollar coin replaces penny slot and $50 bill replaces $1 slot. Inflation will someday make all this a necessity I think but apparently we aren’t quite there yet.

  11. Bob Wright says:

    If we wanted to make the dollar coins work the dollar bill would have to be pulled and not printed in the future….Canada did it some time ago and nobodoy misses it there…I am comfortable with looneys ($1) and tooneys ($2) coins in my pocket when there, they spend well.
    The mint should have worked with the casino industry too, it would be popular there instead of using slugs in some…of course tho, the casinos are more interested in paper slips so it would have taken special exception to have some old fashioned (real) dollar machines. I would have liked it.

  12. admiral58 says:

    I think we’ll be moving back to dollar coins again over the next few years

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