If Pennies Were Eliminated, How Would We Make Change?
Gator5220
Posts: 1,194
Am I missing something obvious here?
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collections: Maryland related coins & exonumia, 7070 Type set, and Video Arcade Tokens.
The Low Budget Y2K Registry Set
<< <i>Round prices to the nearest nickel. >>
Who would cover the deficiency? For a business, that would add up quick.
... and with tax, round the total to the nearest 5c. (we already round to the nearest cent... what happens to all those fractional tax pennies?)
edit: and with rounding, sometimes it's down, sometimes it's up. Tends to even out in the long run
Liberty: Parent of Science & Industry
<< <i>... and when the purchase is many items, round the total.
... and with tax, round the total to the nearest 5c. (we already round to the nearest cent... what happens to all those fractional tax pennies?) >>
Excellent point! I can't stand the argument that we all be ripped off if markets started pricing to the nearest five cents. No we wouldn't. In fact, it would give a competitive edge to those stores that advertised they rounded everything down. It'll all work out in the end. You won't be any poorer. The cent is essentially useless.
<< <i>So much for Penny Candy
Which was virtually non-existent after the 1950's. My father will brag to this day on how much candy he could buy for twenty-five cents when he was a kid in the late forties.
a one cent coin to make change there would simply be a five cent tax kick in at five
times this level. At the end of the year almost everyone would be even to a couple of
nickels.
It's hard to believe these can continue in production much longer with them costing
well over a cent to produce and billions being made.
as our currency continues to devalue.......................
folks will tire of the nickel rounding, want cost to the nearest $.10 .................................
then round to the nearest dime, eliminate the nickel, then.......................
my point is that the nickel would eventually be treated like the cent, too much hassle, ends up in jars. then the dime is the next unit........and so on, until we're down to nearest dollar. all devaluation. if the buck was worth what it was and should be, the cent would have more value, and treated so.
on the soap box, and will be long gone when the buck has only the value (in 1967 terms) of a cent.
<< <i>Round prices to the nearest nickel. >>
What he said..........
TorinoCobra71
It's something wich is kept from the gulden (guilder) time from before 2002 (the euro time). People were just used to 5 cents, and couldn't change to using 1 and 2 cents.
Dennis
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<< <i>If pennies were eliminated, everything we purchase would have a price that ended in zero or five. >>
This would probably not happen immediately. On some low cost items there is
still a little competition that's only a few cents. Of course there is little difference
in price between 17c and six for a dollar.
Within a few years most everything would be priced so as to not require cents.
-except gasoline which will be priced in mils forever.
A: Slowly & with a lot of complaining!
~g
I'd give you the world, just because...
Speak to me of loved ones, favorite places and things, loves lost and gained, tears shed for joy and sorrow, of when I see the sparkle in your eye ...
and the blackness when the dream dies, of lovers, fools, adventurers and kings while I sip my wine and contemplate the Chi.
<< <i>Who would cover the deficiency? For a business, that would add up quick. >>
There is no deficiency. When rounding to the nearest nickel (not up or down), the net result of many transactions is *0*. You can do the math yourself; it's not so hard. We'll wait...
Or, if you don't like math, here's a sample spreadsheet I did the last time this thread came up:
Yes, no one loses, you just round up or down as appropriate.
Need more $$$ for coins?
<< <i>Round prices to the nearest nickel. >>
They would always round up to the nickel... and that would include the gov't and sales taxes too...
42/92
<< <i>Who would cover the deficiency? For a business, that would add up quick.] >>
Again there is absolutely no difference.
It actually costs more to handle pennies than they are worth. Not only do we lose money
when they are minted but we lose money each time they are used or you get them in change.
Some retailers have actually offered to round all transactions down to save the costs of hand-
ling these coins.
Of course this wouldn't be necessary if they were eliminated and prices were rounded by law.
<< <i>Who pays for businesses to convert their computer systems to rounding to the nearest nickel. I know it SOUNDS easy to do, but with software, very few things are as easy as they sound! It would likely be very expensive, especially since many companies build their software piecemeal over the years. Some companies even use software that has been added to and changed so much that their own IT people don't understand it. How would you handle companies like these, that would likely have to completely rewrite vast sections of code? >>
It's easy enough. It would have almost no impact except on retail transactions.
The savings for large businesses in not having to deal with pennies would easily
pay for the effort in very short order.
Much of the work would be in printing up flyers to advise people where the 5c
sales tax kicks in.
Making cents keeps employees working at the mint. Quit making cents and half of the workforce could be laid off.
<< <i>They would always round up to the nickel... and that would include the gov't and sales taxes too... >>
Why do you say that? "They" don't always round up to the nearest cent now -- why would that change?
<< <i>Who pays for businesses to convert their computer systems to rounding to the nearest nickel. I know it SOUNDS easy to do, but with software, very few things are as easy as they sound! >>
This isn't rocket science -- see the spreadsheet sample I posted. If *I* could figure out how to round to a nickel, I should think a professional programmer could do it. Many other countries already do this, and have not imploded.
Besides all that, the programming has already been done. Feature 23 of Cash Register Express version 9.5:
23. Modified the rounding invoice function so you can either round to the lowest nickel, dime or dollar (as it was currently) or to the NEAREST nickel, dime or dollar. These features make for faster change.
Try again...
<< <i>Making cents keeps employees working at the mint. Quit making cents and half of the workforce could be laid off. >>
Any process that results in fewer government workers is OK by me.
<< Who pays for businesses to convert their computer systems to rounding to the nearest nickel. I know it SOUNDS easy to do, but with software, very few things are as easy as they sound! It would likely be very expensive, especially since many companies build their software piecemeal over the years. Some companies even use software that has been added to and changed so much that their own IT people don't understand it. How would you handle companies like these, that would likely have to completely rewrite vast sections of code? >>
It's easy enough. It would have almost no impact except on retail transactions.
The savings for large businesses in not having to deal with pennies would easily
pay for the effort in very short order.
Much of the work would be in printing up flyers to advise people where the 5c
sales tax kicks in.
>>
My company has $25 billion in assets (I mention this so that you can determine if we are sufficiently "large" to qualify under your statement) and never touches a penny. We are a utility; people pay with checks or credit/debit, OR people pay with cash at third-party vendors (not company-owned). We would not save ANY money AT ALL by not having to "deal with pennies."
Flaminio: I challenge you to go to a company whose accounting/database software consists of millions of lines of code and tell them it would be "easy" for them to change their software so it rounds to the nearest nickel. You (a non-programmer--I also am a non-programmer, for the record) saying it would be easy to do is like me, a non-lawyer, saying it should have been easy to convict Michael Jackson. Looks like it on the outside, but frankly, neither you nor I have the slightest notion of the difficulties involved.
Try again...
<<
It's hard to believe these can continue in production much longer with them costing
well over a cent to produce and billions being made.
>>
You would be surprised how many stupid, wasteful things the government does and will continue to do. What would the annual savings be to the government if we eliminated pennies? Fifty million? A hundred million? Pocket change--they waste that much in a single hour.
<< <i>
My company has $25 billion in assets (I mention this so that you can determine if we are sufficiently "large" to qualify under your statement) and never touches a penny. We are a utility; people pay with checks or credit/debit, OR people pay with cash at third-party vendors (not company-owned). We would not save ANY money AT ALL by not having to "deal with pennies." >>
But it wouldn't lose any either. (most utilities accept some cash payment to outside sources so you would likely accrue some small indirect benefit.)
<< <i>
Flaminio: I challenge you to go to a company whose accounting/database software consists of millions of lines of code and tell them it would be "easy" for them to change their software so it rounds to the nearest nickel. You (a non-programmer--I also am a non-programmer, for the record) saying it would be easy to do is like me, a non-lawyer, saying it should have been easy to convict Michael Jackson. Looks like it on the outside, but frankly, neither you nor I have the slightest notion of the difficulties involved.
... >>
They have made this change in other places without problem. It shouldn't be more of a problem here.
<< <i>Flaminio: I challenge you to go to a company whose accounting/database software consists of millions of lines of code and tell them it would be "easy" for them to change their software so it rounds to the nearest nickel. >>
Apples and oranges. I'm not talking about eliminating the denomination of one cent; only the physical manifestation of that denomination ("the penny"). Accounting software would not be changed at all; it would still continue to calculation in cents, or fractions of a cent, or multiples of a cent -- however it does so now. Electronic transactions would still be conducted to the cent. Bank interest would still be paid to the cent. It's only instances where coinage is needed that would need modification, and as I demonstrated that programming has already been done.
<< <i>You would be surprised how many stupid, wasteful things the government does and will continue to do. What would the annual savings be to the government if we eliminated pennies? Fifty million? A hundred million? Pocket change--they waste that much in a single hour. >>
Oh, I agree. Don't get me started on government waste. But those are topics for another discussion group, or perhaps the open forum. Here, it's all about coins, and bottom line pennies waste money, the amount of which is not particularly relevant.
<< <i>P.S. Flaminio, getting rid of the penny sounds good to me. I just throw pennies away when I get them, so I'd have no problem with just having nickels and up. I'm just trying to give you a taste of the opposition such a bill would face in Congress.
>>
This is actually one of the best arguments for getting rid of the penny.
They are toxic and they are littered everywhere. There is plenty enough
zinc in one to kill a pet or an infant.
I believe that I'm reasonably intelligent, and even I have a hard time wrapping my mind around the double standard of "electronic pennies, but physical nickels."
<< <i>They are toxic and they are littered everywhere. There is plenty enough
zinc in one to kill a pet or an infant. >>
WON'T SOMEONE PLEASE THINK OF THE PENGUINS?!?
<< <i>Flaminio, that makes sense to you and me. But do you have any idea how many stupid people vote? A great many voters would be unable to understand the concept of rounding to the nearest nickel, let alone the fact that pennies exist electronically but not physically. As we all know, political decisions are made on the basis of "in the next election, will I gain votes or lose votes because of this?" There are tens of millions of people who don't understand how rounding works, and a great many of them vote. >>
Consider how stupid the average person is.
Then realize that half of the people out there are even dumber than that.
We're doomed as a nation if every decision is made to satisfy the stupid people. Better move to New Zealand now, and beat the rush.
Oh, by the way -- they don't have pennies in New Zealand. They already got rid of them, and curiously did not sink into the Pacific as a result.
<< <i>Oh, by the way -- they don't have pennies in New Zealand. They already got rid of them, and curiously did not sink into the Pacific as a result. >>
We have a different breed of politician here!
<< <i>We're doomed as a nation if every decision is made to satisfy the stupid people. >>
I agree...but our founding fathers didn't. I think you should have to take an IQ test to vote, but the Framers said no =(
Bottom line is that no politician is going to endanger their job doing something that's unpopular--even if it's only unpopular because people are too stupid to understand it.
Payment by Credit Card are done for the actual amount. For example, a cash transaction of $9.99 will become $10.00, but if paid for by CC, the amount will be billed at $9.99.
There are already plenty of pennies!
If all the pennies sitting in jars and coffee cans in people's homes were returned to circulation...
we wouldn't even have to eliminate the one cent coin, just stop making more.
Yes they get lost and wear out, but the existing ones would last a long, long time
Liberty: Parent of Science & Industry
I believe it would be handled just like Y2K. Each company had many years to deal with the situation. For example, if the Federal Government wanted to do away with pennies, they could give each company a fifteen year period to integrate out the penny in their pricing. This would mean all new items put up for sale would automatically either end in a 5 or a 0. Very few things actually stay in existence for fifteen years. Also, very few software programs written today would be used fifteen years from now.
It really does not have to be very painful to work.
<< <i>I'm surprised no one has brought up:
There are already plenty of pennies!
If all the pennies sitting in jars and coffee cans in people's homes were returned to circulation...
we wouldn't even have to eliminate the one cent coin, just stop making more.
Yes they get lost and wear out, but the existing ones would last a long, long time >>
If they stopped making cents, people would start hoarding them. It wouldn't make any sense but it would happen.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Regarding the costs for software...
I believe it would be handled just like Y2K. Each company had many years to deal with the situation. For example, if the Federal Government wanted to do away with pennies, they could give each company a fifteen year period to integrate out the penny in their pricing. This would mean all new items put up for sale would automatically either end in a 5 or a 0. Very few things actually stay in existence for fifteen years. Also, very few software programs written today would be used fifteen years from now.
It really does not have to be very painful to work. >>
No need for new software. All financial matters (checking, billings, accounting, etc) would be calculated to the cent as its done now. Only when there is a CASH TRANSACTION will people need to round to the nearest nickle.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>In Australia, they just round up from 3 cents, down from two. Everyone seems to accept it. >>
Lay you odds nothing here would "round down".
Oscar Wilde
Collect for the love of the hobby, the beauty of the coins, and enjoy the ride.
Clothes make the man. Naked people have little or no influence on society.
<< <i>
Lay you odds nothing here would "round down".
>>
Presumably one and two cents would have to be rounded down by law.
Even if there were no law, do you allow merchants to overcharge you? When you refuse to pay
they will lose customers and if they try to force you they'll lose a lot more.
I would rather see the US Mint produce business strike silver $10, $25, $50, and $100 coins, and gold in $500 and $1000 denominations. They would be coins to be proud of.
Ahh, Pieces-of-five!
-------------------------
By the way, I do write software for retail cash transactions in a Point-of-Sale environment. Our
software, as I imagine most does, already has the ability to price individual items by the nickel.
However, the prices of most items would go up, and the average grocery store bill would probably
be $1-3 higher when purchasing 100 items.
Here's how it works in our system:
Most items are priced using a formula based on cost. Let's say you buy a case of 24 widgets
for $7.50 - that's .3125 cents per widget. Now, say you price things at 1.5 times your cost. That
comes out to .46875 cents per widget, or .47 rounding to the nearest cent.
Now, many stores use a "price point" table to make sure all of their prices end in a certain
digit, like 5 or 9 (or like Kmart, where many things are priced as $xx.97). In the case of our
widget, the price may be bumped up to .49 as the final retail price - we never bump these down!
In the centless world, these widgets would now cost .50, and if you are buying 100 various
sizes and styles of widgets (such as a weekly grocery shopping trip), you would end up paying
a couple bucks more overall.
We would have to modify the software to calculate sales taxes in nickel multiples - and only allow
nickel multiples in any data entry field. I imagine this would take a couple of days of work to
accomplish, and six months or so to roll it out to the end users.
--------------------
The counter argument to the above scenario is that prices of individual items and sales taxes
would still be calculated to the cent (i.e. prices of widgets would still be .49) and that only the
total bill would be rounded up or down to the nearest nickel, thus having a negligible net
effect on the average grocery bill.
But, once we eliminate the cent, slowly but surely we will stop thinking in those terms and I
believe my first scenario will become reality. I imagine that 150 years ago, many small items
were priced to the half-cent, but that practice seems to have gone by the wayside!
Ken
<< <i>Eliminating the cent is long overdue. Just think of the relative price level of goods when the half cent was axed, compared to current prices. The cost of the nickel and copper in nickels could soon force a change.
I would rather see the US Mint produce business strike silver $10, $25, $50, and $100 coins, and gold in $500 and $1000 denominations. They would be coins to be proud of. >>
Not a good idea. High denomination coins would be heavily counterfeited. They wouldn't even have to be good counterfeits to circulate in commerce..
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>I agree...but our founding fathers didn't. I think you should have to take an IQ test to vote, but the Framers said no =( >>
Actually the founding fathers DID intend to restrict the ability to vote. Voting was restricted to white males of some affluence. They had to be owners of real property, land, established businesses etc. They had to be "invested" in the country/community and have "something to lose" if things went wrong. It was believed that these people would be more educated and would consider the issues in greater depth. Unfortunately it was left to local communities to establish their own laws for voter registration and over the years the francise was extended to more and more people until now te requirements for eligibility is just based on the number of birthdays you have managed to acumulate.