Just how long will the cent circulate?
291fifth
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With the production cost (but not the metal value) of the cent now approaching one cent it will probably not be too long before the denomination is discontinued. Here is the question...how long will the cent continue to circulate after production ends? There are billions upon billions of cents in millions and millions of small hoards around the country. If production ends will people bring them out of hiding and start using them? Since most of the coins in these hoards are high grade, lightly circulated coins they could be around for many, many years. Will they circulate and how long would you expect them to stick around after cent production ends?
All glory is fleeting.
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Dennis
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up in landfills and littering streets and parking lots.
Even if they are not withdrawn, their velocity is so low that they would very soon not
be seen anymore. There would be a tendency for many people to hoard them in any
case because they would expect them to become rare. Cents have been becoming
increasingly inconsequential in commerce anyway and mintages have dropped signif-
icantly.
These coins will be ubiquitous for generations regardless of what happens but they will
not be seen much in circulation within just a couple years after production ends.
There probably will be a great deal of increased interest in all cents minted since the
beginning.
<< <i>For quite a while longer. People hate the idea of rounding to the nearest nickel because everyone knows businesses will arrange it so that it always rounds up and consumers will be cheated several cents for every transaction. >>
If you took even one minute to actually do some math, you would see that this is not possible.
Lead is $.35 per pound, but I don't think that's going to happen.
Maybe a polymer/resin/plastic or metalized plastic will work?
--Severian the Lame
<< <i>
<< <i>For quite a while longer. People hate the idea of rounding to the nearest nickel because everyone knows businesses will arrange it so that it always rounds up and consumers will be cheated several cents for every transaction. >>
If you took even one minute to actually do some math, you would see that this is not possible. >>
Actually, I know it is quite possible. Now I was using hyperbole stating it would always be the case. But it certainly will be the case as often as possible. Same reason why Consumer Reports brings up products where the manufacturers reduce content and subtlely raise prices all the while stating it's "new and improved." And that reason is that if a business can find a way to get a few extra cents out of a transaction, they will.
<< <i>If you took even one minute to actually do some math, you would see that this is not possible. >>
Quietly think to yourself: "This is my government we are talking about." Your government already steals between what, 15% and 45% of your paycheck, not counting state and local taxes, not counting Social Security taxes (which we'll probably never live to see paid back--at least by the time I get old enough the minimum age will probably be 90 =D). While the public complains about high gas prices and the government looks for price fixing behind every tree, they don't look to remove the 50-60 cent (or whatever it is) federal tax on gasoline. NOTHING is too underhanded for the government to do
At any rate, if we discontinue the penny because it is worthless, we must discontinue the nickel and dime, because they are worthless too.
<< <i>Banks should use it for transactions between themselves and we the people will just have to loose a few cents. Our govt. should pickup the extra cents and use it to their advantage. >>
Very good point, a little disingenuous to remove the cent from the hands of the "little people" and allow institutions to trade in "electronic" cents.
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I agree with jbstevens.The 100th anniversary of the Lincoln Cent is the perfect time to discontinue the cent.I have suggested as much to the commitee in Washington that is looking into what to do about the commemoration of the Lincoln Cent.They are supposed to make a reccommendation to congress by Lincoln's birthday.
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<< <i>Actually, I know it is quite possible. Now I was using hyperbole stating it would always be the case. But it certainly will be the case as often as possible. >>
OK. Since you know it is possible, please describe an example where a merchant can manipulate the price so the consumer gets cheated by several cents in every transaction.
<< <i>
<< <i>Actually, I know it is quite possible. Now I was using hyperbole stating it would always be the case. But it certainly will be the case as often as possible. >>
OK. Since you know it is possible, please describe an example where a merchant can manipulate the price so the consumer gets cheated by several cents in every transaction. >>
OK, Amazon.com got burned for this. They were doing an experiment to see where the natural price threshold would be for some product. They offered different levels of discounts to different people without disclosing the experiment. So one person paid (for example) $10 for an item, another paid $15, and the last paid $20. When the people compared notes they complained and Amazon ended up giving refunds to the people who were discounted the least and promised to disclose future experiments more publicly.
As a computer programmer, I know how easy it is to modify the final tally on a transaction. Consider a recent scam that has been spreading across the nation. Dishonest gas stations have been installing replacement computer chips in their pumps. When people pump between 5 and 8 gallons or somesuch it calculates correctly but when they deviate from it, they subtlely increase the price per gallon to increase profits.
These are two non-theoretical and publicly known examples to show how a transaction can be manipulated without the consumer being aware. It is reasonable to suggest that businesses will find legal or illegal ways to take advantage of a rounding scenario.
to be rounded up and this will be especially easy in businesses which sell relatively few
products. But such methods will generally require price adjustments to their products
which will either negate these benefits or will cause a few customers to buy the product
elsewhere. There's little doubt that some of his will occur, but in today's economy a cent
or two just doesn't have much difference. The savings to the retailer, banks, consumer,
and government will be substantial and will far outweigh any slight benefit some business
will gain in attempting to get pennies from his customers.
Businessmen have said in polls before that hey would support the elimination of the cent
even if they were required to round all tranactions downward. Ask yourself this; if the
store were required to round downward, how much effort would you be willing to put
into making sure you got the entire $.04 that his might entail? Even on small purchases
would you be willing to purchase a $.75 candy bar because rounding of the entire tranaction
would lower the effective price to $.71?
The cent simply has now purchasing power anymore. Even in small quantities they are
nearly meaningless. Yet we continue to waste vast resources in human effort, time, and
the necessities of modern life in order to produce and handle this anachronism.
<< <i>The savings to the retailer, banks, consumer, >>
Respectfully, this is silly. If it costs "so much money" to handle cents, we should eliminate all coinage altogether.
I do find it amusing that coin collectors consistently urge Congress to go down a road that very may well eliminate *all* coinage within a few decades. Do you think that 20 years after the cent is eliminated people won't be clamoring for the removal of the nickel, since it's essentially worthless as well? Elimination of the nickel forces elimination of the dime, since change can no longer be made from a quarter without nickels.
Of course, in twenty years our society may well be altogether cashless, so who knows. I do think there is a great deal of irony in watching coin collectors, essentially, ask for the elimination of coinage.
P.S. When I worked in the restaurant business as a cashier, I spent less than five minutes a day handling pennies. Unless employers plan to make the work day 7 hours, 55 minutes long, they will not notice any savings. As far as banks, they have counting machines that count and roll the coins, don't they? As for consumers, how do they possibly "save money" by having some money eliminated?
we had a half cent a long time ago. Seems like the cent is next. It would take a LONG time to need/want to eliminate the nickel.
to include coins which have real purchasing power like a dollar or even five dollars. This would
allow small purchases to be made without the use of paper, it would encourage the circulation of
these coins and facilities to accept them. It would result in substantial savings in the creation
of paper currency and could help make a resurgence in coin collecting.
The nickel, too, is nearly worthless and could well be eliminated if the coinage system were
reworked so it could produce change for all transactions. While it may not be likely that this
will occur it is not because it won't work as it is for other reasons. Without people complaining
about the changes that need to be made it simply won't happen. There are reasons that these
common sense changes haven't ocurred.
But even without such a rationalization of the currency system the cent is still a huge drain on
the American economy. It's not just the five minutes required for a clerk to count his register.
(though if everyone spent this long on a worthless endeavor it would represent essentially the
population of a major city doing nothing but adding up cash register tills each day). There are
also costs associated with mining, transportation, and smelting of the zinc. There are costs of
minting and handling these coins which tend to go from bank, to merchant, to consumer, to
jusg, jars, and landfills. There is a huge amount of effort and time tied up in these, and for what?
There is simply no point in the existence of currency which is a small fraction of the value of the
least expensive consumer product.
I understand why you say this, but when you have enough transactions it can add to a great deal of money. Same reason why you have the incredibly shrinking hershey bar or the "new and improved" things that are a bit smaller and cost more. If a company could save 1 cent in producing a frozen food product by using one color on the box, they would. Especially when you factor in the number of times that box is sold to consumers. Same thing in the reverse. If a company could make 2 extra cents per transaction, imagine how much money Wal-Mart would rake in around the country in a single day with their transaction throughput!
<< <i>
I understand why you say this, but when you have enough transactions it can add to a great deal of money. Same reason why you have the incredibly shrinking hershey bar or the "new and improved" things that are a bit smaller and cost more. If a company could save 1 cent in producing a frozen food product by using one color on the box, they would. Especially when you factor in the number of times that box is sold to consumers. Same thing in the reverse. If a company could make 2 extra cents per transaction, imagine how much money Wal-Mart would rake in around the country in a single day with their transaction throughput! >>
Many companies continue to pinch a penny here and a penny there in making their products until they
become totally useless and then they go out of business. All the laws of man and nature will still apply
with or without the cent. Companies which can't compete or understand the value of a cent or the value
of quality will fail. Nothing of substance can change with the elimination of the cent because the cent has
so little substance. The biggest change will be the effort and costs will evaporate. Granted these won't
have great substance to many individuals either but nature will see to it that this vacuum will be filled with
something of more substance.
<< <i>If a company could make 2 extra cents per transaction, imagine how much money Wal-Mart would rake in around the country in a single day with their transaction throughput! >>
I still don't understand how this is possible. Remember, rounding only occurs on the total, not on each individual item.
Let's say Wal-Mart sells a widget for $1.78. See how they've cleverly priced the widget so that if someone buys one, rounding will net them an extra two cents. But then what if you buy two widgets? Now instead of making two cents, Wal-Mart has lost a cent! But if you buy three, they make a cent again. However, buying four ends up costing them two cents.
Now imagine a cart full of random items of varying prices. How can anyone predict whether the total will be rounded up or down? If anything, rounding favors the consumer: while it is not possible for a retailer to construct a pricing scheme to net a cent or two on every transaction, a savvy consumer could conceivably buy products with just the right prices and quantities to get a two cent advantage. (Of course, I doubt anybody is that miserly.)
This is not even factoring in the effect of sales tax.
It's simply not possible to construct a fair pricing scheme where rounding will cost the consumer a significant amount of money, nor net the retailer anything. The randomness of many purchases will over time balance out, resulting in zero difference. The true savings will be gained by Wal-Mart not through rounding, but rather in not having to handle valueless coinage every day.
price to take advantage of this. But again, they risk sending their customers
elsewhere for what amounts to pennies a day.
The typical sale at a late night convenience store, for example, is a cup of coffee
and a pack of cigarettes. This purchase would be priced so it would be rounded
up.
<< <i>The typical sale at a late night convenience store, for example, is a cup of coffee
and a pack of cigarettes. This purchase would be priced so it would be rounded
up. >>
Small or large coffee? Marlboros, Camels, or generics? What's the sales tax at this late night store? Is it applied to both coffee and cigarettes? What if he wants to get a pack for his date as well?
Even with a severely contrived case such as this, I think there is sufficient variability to cancel out any attempted gain through rounding. I really don't think any merchant will bother to take the time.