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Your Take: Drop the Penny & Nickel?

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It currently costs more to make a penny and a nickel than they’re actually worth. So that begs, the question, should we really be expending resources arguing about how to reconstitute the coins (switching to cheaper metals) or should we just drop the coins all together?

What’s funny is that the fact that the coins are worth more for their metals than they are in stores isn’t even a big deal. There’s so much fiat money floating around that the Mint could always just print just a few more hundred dollar bills to compensate and the public would have no idea (other than inflation would tick a micro-fraction higher, but they play with that number anyway). The bigger issue is that we, as tax-payers, are paying for coins that many wouldn’t even pick up on the street!

What’s your take? Retire the penny and the nickel? Keep the little guys because we need something to stick in our piggy banks?

{ 33 comments, please add your thoughts now! }

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33 Responses to “Your Take: Drop the Penny & Nickel?”

  1. Traciatim says:

    People carry cash still? So last century 🙂

  2. Posco says:

    Heh, yeah people still carry cash. Just try making it around tip-happy New York City without cash! But I say, down with the penny at least. I still use nickels and dimes to pay my 25-cent portion of school-subsidized public transit fare. Well, ok, I usually use quarters. So, down with the nickel, too!

    Actually, while we’re at it, down with the $1 bill. Those $1 coins are cheaper to make, harder to counterfeit, and last longer. Whaddaya think about that?

  3. Brandon says:

    To tell you the truth I really dont believe that the Mints need to make any more pennies or nickles because there are so many in circulation and your are right very few people even use them. I, myself, like to collect the change in a piggy bank and cash them all in once a year or so and have a little fun. Secondly, dont you think that if the smallest amount of currency we had was 10 cents than things would be more expensive. Its bad enough they always round up on a penny think what it would be like if they rounded up on the dime.

  4. Steve says:

    I lived in Australia for a year, and they do not have 1 cent currency. (I think we should follow suit)

    If the amount ends in 0.01 or 0.02, they round down. If the amount ends in 0.03 or 0.04, they round up. This is only true with cash transactions; if electronic transactions are made, it is to the 1 cent.

    A side effect of this is many people pump $20.02 in gas, since they only have to pay $20.00 in cash.

  5. MonkeyMonk says:

    I say definitely get rid of the one cent coin. Its more of a nuisance to me than anything and I tend to either leave them on the counter.

    The five cent coin isn’t as bad to me and I would expect to see more resistance from people being forced to always round to the nearest ten.

    Also, I totally agree with Posco. Ditch the one dollar bill for a coin. Maybe throw in a two dollar coin (like Canada) while they’re at it.

  6. Patrick says:

    When I was in the USAF and stationed overseas, the base didn’t use pennies at the stores (only at the post office) because they were too expensive to ship. They rounded up and down like Steve mentioned they do in Australia. It was very nice not to deal with pennies.

    Personally, I wouldn’t care if the US stopped minting new pennies if stores agreed to round up or down and as long as the monetary system still allowed for the penny in electronic transactions. Eliminating the penny from the monetary system altogether (including electronic transactions) would be awful though, because that would mean taxes could only be 5% or 10%. And we all know they wouldn’t go down.

    I think the penny is also still needed to calculate interest and other transactions. But the physical coin? Naw. Get rid of it.

  7. I’m a penny and nickel advocate.

    Anyone who thinks business would “round down” from $.05 is living in fantasyland. Everything would “round up” to the next dime at a bare minimum.

    It would also throw off pricing as it relates to sales taxes. Right now, merchants simply add the tax they’re forced to collect on top of the price they feel their goods or services are worth. Without the penny and nickel they would have to re-calculate all their pricing which, since time is money, they would factor into the price.

    I may not pick up every penny from the street but I pick up quite a few and I would certainly pick up a nickel in a New York second.

    Finally, I recycle most of my coins either when I pay for things or when I take my coin collection to the local CoinStar machine and turn them into bills. Sure new ones need to be made from time to time as does paper money but with all the ink and art work going into the new bills how long will it be before paper money is too expensive to print?

    Call me an old sentimental guy.

  8. Jared says:

    I believe we should follow in the the footsteps of many older and wiser countries. When I was in France, they had the penny, but I never ever used it. Everything is priced to the nickel or dime and all taxes are included in posted prices. That along with the one and two dollar coins, made paying for things, even in another language, a lot easier than paying for them here. I say down with the penny and up with the one dollar coin.

  9. Mrs. Micah says:

    With MD’s 6% sales tax it’s actually pretty untenable to get rid of pennies. Even with all the library’s prices and fines being in 5 cent increments, I’m always dealing with pennies from the sales tax on our books and whatnot.

    $1.50 = $1.59.
    $0.50 = $0.53….there’s just always so many pennies.

    I feel like we’d be rather nickled and dimed upwards.

  10. Lose the penny. Keep the nickel.

  11. Garrett says:

    Well, we need to do this:

    We also need to reduce the size of the penny(unless we get rid of it) and nickel. There is no reason a nickel needs to be so large!

    From the pocket change saved above, we should really circulate the dollar coins that we already have, and throw in a two dollar coin.

    For the sake of the visually impaired, we should resize our currency like that of the Euro, so that denominations would be discernible from size alone.

    And less important, with the 5 dollar bill turning purple and the 10 turning yellow, why do we insist on the ugly mixture that occurs when we add those colors to the green we already have? We should go all out, making colorful money, or keep it green and simple.

  12. mbhunter says:

    There was a paper that suggested revaluing the cent to five cents. This would force many of the coins back in circulation because then the face value would be more than the intrinsic metal value.

    Also, it’s only pre-1982 cents that are worth more than a cent in metal content. The Zincolns are now less than 2/3 of a cent.

    But Gresham is still alive and well. 😉

  13. vivtho says:

    A little bit of trivia … in India, the 1 Rupee coin is worth more in terms of it’s scrap value than in what you can buy with it. This has led to a small (and profitable!) industry where truckloads of 1 Rupee coins are smuggled over the border into Bangladesh, where they are melted down and sold to metalworks. 🙂

  14. Llama Money says:

    Mrs. Micah – MD went to a 6% sales tax? Ugh! I lived my first 19 or so years there, and loved the 5% tax. It took just seconds to figure out tax in your head. Here in TX it’s some odball fractional number, that changes based on the way the wind blows that day. I miss 5%…..

  15. Here in Florida it is 7.5% tax!!

    As far as the pennies and nickels are concerned…..RETIRE RETIRE RETIRE!

    I like the comment on Australian tax being rounded up or down. That sounds like a pretty doable thing here in the states to me.

    Just as a rant, why the hell did the government spend more money printing new colored $5 and $10 bills when we are already printing more money than we really have accounted for in gold?!? Is that truly necessary?

  16. saladdin says:

    Bye Bye penny.

    Great State of Tennessee:
    State sales tax 7%
    Local Option tax 2.75%

    Grand total of 9.75%

  17. James says:

    We should dump the penny and double quick. The swiss have developed a great system whereby everything is just rounded up the upper 5 cent denomination.

    If its more expensive to make the coins then their dollar value, the nation should just dump the penny and save the money.

  18. CK says:

    Be gone – Penny, nickel, and dime. I’m more then happy to have a merchant round up to the nearest quarter. Maybe I’m just rich but over the long haul the 24 cent max “penalty” wouldn’t bother me. The fear of rounding up argument is bogus anyhow. If I feel a place is charging too much I won’t go there, it’s that simple.

  19. Glenn Lasher says:

    I’d keep the dime and quarter, but drop the penny and nickel. While we’re at it, I’d like to add my voice to the chorus that says we need to drop the $1 bill and get a viable $1 (and maybe also $2) coin in play. The $1 coin we have in play now is good; we just need to stop providing $1 bills so they can actually circulate.

    As for pennies and nickels, sometime when you have to handle them, count out quickly how long you spend handling them. I came to a realisation one day that I had just spent more time just scooping up a small pile of them from my kitchen counter and walking them across the room to drop into a change bucket than they were worth.

    For people making federal minimum wage, a pennies and nickels are worth only 6 and 31 seconds of your time, respectively. Here in New York, where we have a higher minimum wage, that drops to 5 and 25 seconds. At $12/hr, it becomes 3 and 15, and professional salaries quickly rise into levels where the value of a penny or a nickel is better measured in milliseconds.

    I say stop wasting my tax money and my time. This is an ineffective use of resources.

  20. Matt says:

    It’s all politics. Making the blanks for the penny keeps a plant in Tennessee operational. Since the House and Senate representatives want to get re-elected, they’re never going to vote to remove the penny from circulation because that would cost their constituents jobs.

    Despite a service life of only a year, the dollar bill is more popular that the dollar coin because nobody wants to carry around bulky change. Congress made both the bill and coin legal (for the same reason of keeping jobs) and is basically letting the public decide. The dollar coin is being made, it just isnt as popular as the bill.

    • Jeff Whiting says:

      If Vending Machines and Parking Meters would take a Dollar Coin, they’d become popular.

  21. saxquiz says:

    I’m visiting Jordan right now and they’ve all but done away with their equivalent of the penny. I’ve heard that they exist, but I haven’t seen one the whole time I’ve been here. Every price always ends in a 0 or a 5. They have everything the US has, but also they use a 1/2 denomination coin.

  22. Mike says:

    I say we drop the penny, nickel and quarter. We already have the dime…why not create a ‘two dime’ coin? The current half dollar is just obnoxious…a new smaller coin should be adopted in its place with the face value of ‘five dimes’. Dropping the current quarter, nickel and penny would completely rid us of that extra decimal place.

    From what I understand, in 1913 the lowest denomination coin was the cent. Following inflation, that would translate to twenty-two cents in today’s dollars. If they were able to live in 1913 with a coin with the lowest value of what we now know as 22¢, I think we could survive with a dime as the lowest denomination today.

  23. Eric says:

    I wish that the penny would disappear already. I haven’t used one since I was a small child, and they accumulate on my dresser far too quickly (sometimes 20-30 per day!). I always take buckets of them to coinstar, but it feels like such a waste – you’re only getting .0091 for each penny, which is absolute nonsense.

    I say the penny and the nickel have got to go, and we need to adopt $1 and $2 coins. Last time I was in England it was so nice to walk into a convenience store and pull out a £2 coin to pay for my things, rather than having to get my wallet out. Plus, a bus fare is often £2, so you can just stick one coin in the machine rather than 8 25-cent pieces.

    Lastly, after doing away with the penny and nickel, we ought to adopt a 20¢ coin, and resize the 50¢ coin so it becomes more practical. I’d much rather stick a $2 coin into a parking meter than have to sift through my change storage for 8 quarters.

    Nothing can be purchased with pennies, as very few things even cost less than a dollar anymore. It’s a waste of taxpayer money to continue making them. Also, the $1 coins would last much longer than the bills, so that would also save money. The government needs to stop living in the past and get rid of these unnecessary coins!

  24. Jim says:

    I say get rid of pennies, nickels, and quarters. It might be useful to have either a twenty cent piece or a redesigned fifty cent piece, but not both. Either dimes, twenty cent coins, and dollar coins, or dimes, fifty cent coins, and dollar coins.

  25. Ian says:

    There is no reason to have the penny, nickel and dime. A quarter used in vending machines. Everything can be rounded to the nearest quarter.

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