it really was funnier on The West Wing

Dept. of Currency: Penny Dreadful

In November, 1989, Representatives James A. Hayes, of Louisiana, and Jim Kolbe, of Arizona, having had just about enough of all this, introduced the Price Rounding Act. Its purpose was to phase out the penny by requiring that all cash transactions be rounded to the nearest five cents. The bill was actively opposed by Americans for Common Cents, a lobbying organization that had been founded specifically to defeat the legislation. A.C.C.'s main funding came from Jarden Zinc Products, which is one of the nation's largest producers of zinc, and which has supplied the U.S. Mint with penny planchets since 1982. [...]

Coinstar charges most of its customers 8.9 per cent of any amount they feed into a machine. The fact that consumers happily pay this considerable fee suggests that they wouldn't be bothered by the vastly smaller penalty that rounding to the nearest nickel might entail. Of course, eliminating cents would also eliminate the middleman -- in this case Coinstar, which annually processes about forty billion coins, more than half of which are pennies. Not surprisingly, therefore, Coinstar has been an advocate of preserving pennies. Since 1998, the company has conducted an annual currency poll, which always shows that Americans still love pennies and would prefer to continue getting rid of them by collecting them for months or years and then paying Coinstar to put them back into circulation, instead of getting rid of them once and for all by having the Mint stop making them.

See also The Megapenny Project.

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36 Responses:

  1. boggyb says:

    I have much better plans for my collection of coppers.

    Plan A is to get round Coinstar's charges (7.9 UK pence per pound here) by depositing the money at the bank.

    The much more fun Plan B is to find a vending machine that takes pennies, and spend the coppers on chocolate.

  2. ultranurd says:

    I like the one where everything gets rounded to the dollar, but it's a d100 roll based on what the cents value would have been.

    If I recall, new pennies now contain more than a penny's worth of raw metal and production cost?

    • jwz says:

      If you recall -- or if you read the article, even a little.

      It would be ironic if pennies were consumed by the act of spending them, but they're not.

      • There was an NPR story about the same guy a couple of weeks ago. Apparently he manufactures and sells the machine that separates out the pre-1982 pennies, and has sold a couple hundred of them to people who are now praying for the penny to be retired so they can legally melt them down.

        I did not know that it costs a dime to make a nickel though. Crazy!

      • ultranurd says:

        Yup, caught red-handed reading only the summary.

        Here's the patent for the random number generator method. It's probably not feasible since every point of sale would have to be upgraded with such a device.

        • ahruman says:

          Also, just consider the fun when Diebold refuses to hand over the source.

          • ultranurd says:

            You mean you don't trust the seal of your county's Weights and Measures Division? :oP

            I think it would be a bit easier to determine an unfair checkout line, since you could interview people buying the same item and see the distribution of what people paid. If it rounded up more than it should, you'd see that with enough samples, no?

      • jered says:

        It would be ironic if pennies were consumed by the act of spending them, but they're not.

        From the Mint's point of view, they are. Or, as the article says, they lose money on every sale. (They make up for it in volume.)

        I wonder to what degree the lost coinage that the article mentions combats inflation, by taking money out of circulation (my guess is not much).

        • mark242 says:


          Take it to the logical extreme: imagine that, tomorrow, all of your dollar bills, pennies, etc., all went away. Prices would not go down at all. Vendors would simply require you to pay by [credit|debit] card, and then you would get paid electronically, all-cash vendors would be temporarily screwed, etc etc, but there would be no impact on the price of goods. This is where we're heading anyways; I can count on one hand the number of days within the past 6 months that I've had more than $20 in currency in my pocket.

  3. bikerwalla says:

    They talk about rising copper prices but the dollar has sunk so low that pennies are now worth more than $.01 in melt value.

    • jered says:

      What are you trying to say?

      • bikerwalla says:

        that most articles claim it's a sudden uptick in metal prices that's squeezing the Mint, but that's only when you look at the prices in U.S. dollars. The dollar is losing value against every other currency and commodity.

  4. zwol says:

    Every time this comes up, I wonder why nobody proposes a currency revaluation like those used to deal with hyperinflation. It's the same problem, after all, just slower.

  5. ghewgill says:

    The next question is, who's the lobby that is preventing the $1 bill from being taken out of circulation? The mint has tried no less than three times to introduce a dollar coin, with lackluster success. When I was in Canada in 1990 or so, they said "here's the dollar coin, start using it", followed by "and the dollar bill is going away on xxx date".

    I was going to mention New Zealand's recent coinage reform, but I'm glad I RTFA, it was interesting. :)

    • jered says:

      Ask and ye shall receive. Here in Massachusetts, at least, it's the state rep that represents the paper maker.

      • ghewgill says:

        Interesting, thanks, I new there had to be somebody. I used to buy books of 10 stamps from the vending machines at the post office with a $20 bill just so I could get a stack of $1 coins back :)

        • lafinjack says:

          My hate of cash is exceeded only by my hate of coin. Having to carry around a huge wad of jangling metal just to buy simple things where cards are unavailable is unacceptable to me. I'd be happy with just rounding to the quarter and keeping the dollar bill, since we can't get rid of cash entirely.

  6. kencf0618 says:

    I only feed Coinstar when Powerball's pre-tax payout reaches three digits; that's when I divest my piggy bank of pennies and nickels. Given that the lottery is a tax on people who don't understand statistics, I figured I'd double the foolishness.

    • dglenn says:

      Huh. I don't accumulate pennies. I accumulate dimes as a way of sort of hiding my "slowly accumulate cash to buy something fun" money from myself, and I accumulate quarters and dollar-coins so that I'll have them to spend at renaissance/medieval events (and for parking meters, and as an emergency stash when they're all I've got left and I need to buy toilet paper). But I almost never have more than about a dozen pennies or a half dozen nickels in the house or in my purse at once. I simply use the ones I do have with me to move the amount of change I'll get to an amount that'll come in dimes and quarters (e.g., giving the cashier a $5 bill and three pennies for a $2.18 purchase.

      I usually have fewer than four pennies, but once in a while I'll make a few hurried purchases in a row where I don't bother to spend pennies, and wind up with eight to twelve pennies by the end of the day.

      • valacosa says:

        I don't accumulate any coins over the long term, for much the same reason. I happened to start today with lots of coins; now I have fewer because of several exact-change purchases.

        I think it's just people in general are too lazy to do math.

  7. ferrouswheel says:

    The most frustrating thing about travelling to the states is dealing with the pennies. Especially now that New Zealand has done away with 5c coins too. So much more simpler and my wallet thanks me for it.

  8. miguelitosd says:

    I've long since lost count of the number of times I've seen them either crashed, or at the "Press ctl-alt-del to log into windows" screen at my local stores.

  9. nyankolove says:

    Coinstar charges most of its customers 8.9 per cent of any amount they feed into a machine. The fact that consumers happily pay this considerable fee suggests that they wouldn't be bothered by the vastly smaller penalty that rounding to the nearest nickel might entail.

    So because Coinstar users don't care about throwing away 8.9%, the general population doesn't care? Do I need to supply someone with a Venn diagram?

    I find it amazing that Coinstar customers vote to keep the penny even though they pay more to Coinstar than they would by rounding to the nickel. They must get a lot of joy out of collecting heaps of useless change and lugging it to the machines, since they're paying so much for the privilege. I've never used one (see "8.9%") but it must be pretty exciting to have such a devoted following. Are there flashing lights? Does it predict the future while it counts your coins? Sheesh...

    • pdx6 says:

      What no one has mentioned is that Coinstar doesn't charge a fee if you opt for a gift card instead of cash, so the "most of the population" idea goes right out the window.

      • jcfiala says:

        Ditto. I turned in $50 of pennies and other small coins last year, and got the full value as an amazon gift certificate. *rubs hands together happily*

      • I got drawn in by that once, but after I fed in my money it refused me the gift certificate option! Somewhere there's a rich scheming executive who owes me around $1.79.

    • jered says:

      No, but it says things like "My, you have a lot of coins!" while it tries to catch up. Mechanically, they're actually rather interesting.

      I used one once, well before the current extortionist amount they charge. (Note, BTW, that you can avoid the surcharge if you take payment in scrip, like iTunes account balance.) The reason I used it is that I did not have a local bank account, and the local extortionist bank (BankBoston nee BayBank, now since Fleet and Borg of America) refused to handle coinage for me.

  10. 0ccam says:

    I saw some news show talking about phasing out the cent. The guy in charge seems to think that it's so traditional that the citizens would never approve.

    Hell, leave 'em in circulation. Don't bother retiring them.

    Just stop minting new ones.

    • lafinjack says:

      We have to keep the penny, but Pluto has to go. What a sad, sad world we live in. :(

      • wikkit42 says:

        You may not be aware of it, as it's a bit hard to see, but Pluto is still there. This article isn't talking about reclassifying the penny, it's about getting rid of it altogether.

        I know it's a very difficult distinction to grasp.

  11. hollyking says:

    My only comment is that you don't have to pay 8.9% if you don't want to. Get any of the gift cards or certificates and there isn't a fee. You can also donate to charity without incurring a fee.

  12. heresiarch says:

    i hate pennies. i mean, they're cute in a sentimental sort of way, but they just weigh a lot in my wallet and then i try to spend them meticulously until i'm out. at which point i somehow seem to accumulate more.

  13. volkris says:

    For what it's worth, stamp vending machines in post offices take pennies.

    Not sure exactly how to fit that tidbit into evil scheming, but there it is.

  14. ghasthemys says:

    Hey, getting rid of low-denomination coinage seems to be in the vogue! Here in Hungary we killed our two smallest coins last month.

    The 1 and 2 Ft coins were worth about half a penny and one penny, respectively.

    Strangely, the decision to withdraw these coins was almost universally accepted as sensible by everyone, despite us being wildly polarized politically. We got a year's advance notice, and the new rounding rules were widely publicized prior to the final day. The transition was totally smooth: one day we simply stopped using the coins, and merchants started to round change to the nearest 5. No trouble whatsoever.

    For the most part, prices remained the same (i.e., they still tend to end in lots of 9s), and if we prefer we can still pay exact using a credit/debit card.

    Funnily enough, a year ago we had the same entertaining stories about how much it costs to make money and how smart entrepreneurs are melting down tons of coins for nickel and copper. The New Yorker article reads exactly like the stuff I read last year in Hungarian media. It is not often this happens.