Wicked Local: Planned penny protest gains momentum among businesses
For actual payment, though, pennies will no longer be considered legal tender by most of these merchants. …
What do you think? Should we go penniless?
Becoming Penniless
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12 responses to “Becoming Penniless”
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go penniless. NZ phased out all coins below 10cents recently. Sure makes the pockets lighter!
Unfortunately the UK still has pennies .. . useless waste of metals if you ask me. -
Actually, if I recall correctly, anything below a dime in the US is technically not legal tender (i.e., payment doesn’t have to be accepted in that form.) I’m all for killing the penny.
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We should definitely go penniless–though my friends fear that would provide an excuse for merchants to round up their prices.
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Some no doubt will, but there will always be competitors who will round down to get more customers.
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One problem is that overall, everybody will round up.
Another is that local taxes are in odd amounts. Here in California, it’s 7.75%
Regular prices almost always end in “.99” – this argues for a 99c piece – or “.95”.
An item selling for $17.99 (f’r’example) actually costs the buyer $19.384225, which we have to round to $19.38.
Under the “no-penny” system, the seller could either be generous and charge us $19.35 (and hope he makes back the $0.034225 on transactions that round the other way), or charge us $19.40.
Then there are postage stamps. Now at $0.42, they go up in 1c increments. Do we really want them to go up in 5c increments? At $0.40, 5c is a 12.5% hike.
Yes, I know we could just buy them in lots of 5 (at $2.10), but now I have the problem of dealing with 4 extra stamps that I might need next week.
There’s a perfect solution for the “penny problem”. Stamp machines at many post offices accept pennies. Whenever I need a stamp, I just feed it 42 pennies and I get a stamp.
From Wiki:
“The United States Coinage Act of 1965 states (in part):
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.”
Still, just because pennies and nickels are legal tender doesn’t mean merchants have to accept them – many will not take $100 bills.
At least Formerly Great Britain shows some common sense:
“Currently, 20 pence pieces, 25 pence coins and 50 pence pieces are legal tender in amounts up to 10 pounds; 5 pence pieces and 10 pence pieces are legal tender in amounts up to 5 pounds; and 1 penny pieces and 2 pence pieces are legal tender in amounts up to 20 pence.”
We could do the same. -
Here in Australia we phased our 1 and 2c coins out years ago. Prices didn’t change—it’s still normal for items to be priced at ‘$1.99’ or whatever.
The rounding issue is simple, because it only affects the last five cents of a transaction, and only if the customer is paying in cash. The price is simply rounded to the nearest five cents—so a basket of goods that tallies at $10.02 would cost $10.00, whilst a basket that tallies at $10.03 would cost $10.05.
A blanket system like this means that rounding effects balance out at the end of the day, so nobody’s really out of pocket. -
“…rounding effects balance out at the end of the day, so nobody’s really out of pocket.”
This is entirely to practical. It would never work in the states. 🙂 -
The other day I was with my girlfriend and received 3 cents in change. I asked her whether she keeps pennies, and when she said no, I threw them out the window.
I don’t.
You should have seen her face. She’d never seen anyone really throw money away before. Of all the things I meant, that was the last she would have guessed.
It was priceless … so to speak. -
Guess you gave her your three cents worth. 😉
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I’ve got no problem with rounding up. The system most often employed is the “swedish rounding” http://en.wikipedia.org/wiki/Swedish_rounding
You’re only ever going to pay a few extra cents, as the rounding only occurs on the total purchase price, not on the price of each individual good. -
I am the guy whose idea this is, both the “penny anti protest” (named by Greg Mankiw) and the very simple proposal. The proposal, which can be done via a simple Executive Order, is “businesses which round down cash transactions to the nearest nickel may refuse to handle pennies.” THERE IS NO ROUNDING UP so price incereases are not an argument against it. Then let the free market decide. My prediction: most businesses think handling a penny costs more than a penny and will jump at the opportunity to forego them. Consumers and businesses will both save.
PLease visit my blog for other great ideas at http://www.thinkoob.com . -
Thanks Al.
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