Pennies - WTF?

[Anonymous]

TheManWithAUsername wrote:
BTW, the production cost isn't completely insignificant. Well over $100 million is spent every year minting small coins.

The US Mint sells all coins at cost to the Federal Reserve, so they charge them $0.01 for a penny and $0.25 for a quarter. The mint doesn't lose money overall (they make money on quarters and up, and lose money on smaller denominations). The Fed orders specific denominations based on market need.

[takoma]

Anonymous wrote:

TheManWithAUsername wrote:BTW, the production cost isn't completely insignificant. Well over $100 million is spent every year minting small coins.

The US Mint sells all coins at cost to the Federal Reserve, so they charge them $0.01 for a penny and $0.25 for a quarter. The mint doesn't lose money overall (they make money on quarters and up, and lose money on smaller denominations). The Fed orders specific denominations based on market need.

That sounds very sensible, except for the part about need. Who, in the past few decades, has needed pennies?

[Anonymous]

takoma wrote:
That sounds very sensible, except for the part about need. Who, in the past few decades, has needed pennies?

I believe it's based on what banks are ordering, which comes from their clients. So if a bunch of retailers need rolls of pennies, and the bank doesn't have any on-hand, they order them from the Fed.

Because pennies are still used every day, we all "need" them. I went to a store today and my change included 2 pennies, so the retailer "needed" those pennies in order to provide me with exact change.

[Anonymous]

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[takoma]

They do tend to help when people are over-excited.

The calmin' cents solution.

[TheManWithAUsername]

Anonymous wrote:

TheManWithAUsername wrote:
BTW, the production cost isn't completely insignificant. Well over $100 million is spent every year minting small coins.

The US Mint sells all coins at cost to the Federal Reserve, so they charge them $0.01 for a penny and $0.25 for a quarter. The mint doesn't lose money overall (they make money on quarters and up, and lose money on smaller denominations). The Fed orders specific denominations based on market need.

I'm missing your point. I'm proposing discontinuing coins under a quarter, which you seem to acknowledge are money losers.

[TheManWithAUsername]

Anonymous wrote:I believe it's based on what banks are ordering, which comes from their clients. So if a bunch of retailers need rolls of pennies, and the bank doesn't have any on-hand, they order them from the Fed.

Because pennies are still used every day, we all "need" them. I went to a store today and my change included 2 pennies, so the retailer "needed" those pennies in order to provide me with exact change.

We only "need" them because we have them. Retailers don't charge you in half-pennies because they know you can't pay and they can't make change. The same thing would happen if we dumped these coins.

[Anonymous]

Yeah, but this is like the metric system. Even if it makes sense to change, people don't want to do it and so it never happens.

I'm sure if the Chambers of Commerce or some entity representing retail and restaurants made it an agenda item, then it would happen. As it is, they like pricing things in pennies for their psychological value (3.99, 19.99) and so they have a penny mentality. Do they want to price things at 3.75 or 4.00? No. Would it make sense to price things at 3.99 when pennies no longer exist? No.

Would consumers like it? You and I would. But I'm not sure our public as a whole is ready for rounding.

[Anonymous]

Having just come back from Europe, the practice of keeping everything rounded to relatively whole numbers (larger items always in whole dollars, smaller items rounded to nearest 10-cents) AND the tax being factored in made shopping so easy. If you chose two things with 10E price tags, you knew you were paying 20E. So simple. I was not a fan of the 1E or 2E coins, primarily because I tended to undervalue them as "just change" but I could probably adjust to that in time.

[Anonymous]

Pennies-WTF. is this Obama's new economic plan? Pennies, Winning The Future?

[TheManWithAUsername]

Anonymous wrote:Yeah, but this is like the metric system. Even if it makes sense to change, people don't want to do it and so it never happens.

I'm sure if the Chambers of Commerce or some entity representing retail and restaurants made it an agenda item, then it would happen. As it is, they like pricing things in pennies for their psychological value (3.99, 19.99) and so they have a penny mentality. Do they want to price things at 3.75 or 4.00? No. Would it make sense to price things at 3.99 when pennies no longer exist? No.

Would consumers like it? You and I would. But I'm not sure our public as a whole is ready for rounding.

I don't know about that. Changing to the metric system would be annoying for everyone for a short time. Dumping small change would be an immediate improvement. I don't see anyone objecting to rounding other than retailers, as you mention.