Elon's looking at the penny

Nope, they have been investigating replacement metals for the one and five cent for over ten years now, issuing a report every two years which basically says the same thing each time. They have investigated the possibility of using aluminum but it has problems. It is actually harder on the dies, and when you run the coins through high speed counting machines they have a tendency to cold weld themselves together wrecking both the coins and the machines.

And when the businesses find they have to buy cents at four cents apiece (Possibly more since they will start losiing economy of scale making the cents cost even more.) they won't do it and instead will just start rounding prices.

Nothing, they will remain. 99 cent item plus in my area 7% sales tax makes it 1.06 which gets rounded to $1.05

And your competitor down the street DOES round so his prices are always lower and he takes all your customers. Your greed runs you out of business while your competitor makes out like a bandit.

Well steel would be cheaper than zinc, say .3 cents instead of .7 cents, but since the manufacturing cost is still 3 cents each......

Once they are discontinued the Fed will ship any that come in back to the mint for recycling. Once people realize they are going to be made anymore some people will hoard them in the hopes that they will be "rare and valuable" some day. other just won't bother with trying to return them because "they aren't worth fooling with" Some will find their way back to the stores and banks. The stores will ship any they get back to the bank, and the banks will ship them back to the Federal Reserve. Within less than a years time the cent will be gone from circulation for all practical purposes.

And you can't set prices so they will always round up unless you forbid you customers to buy more than one item at a time. Yes you can set your prices so that ONE item always rounds up, but once customers start buying multiple items you start getting random amounts again and once the tax is applied to the total once again sometime it will round up and sometimes it will round down.

Also most business with just use the rounding feature that is already built into their electronic cash registers, and it will round up and down. Now you could try sticking with your current setting and round up yourself manually. But you are now in the position of having one price showing on the register while you look them in the eye and quote a higher price. That isn't going to go over well with you having to explain to each customer why you are "overcharging them". (While you competitor down the street is letting his register do the rounding so his prices are lower and he isn't having to make these explanations.)

 

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That's not my point. All the discussion about rounding presumes that companies keep the same prices in one cent increments. If they did, of course rounding takes place at the cash register. I'm not convinced that they will do that. If all price tags are in 5c increments, they can "round" the price however they want and there is no rounding at the register. Sure, sales tax would be rounded at the cash register, but that happens already.

 

It would be even worse, because steel is rougher on dies than zinc.

 

My point, exactly. But if they insist, let them cover the cost. Many merchants did this in the Civil War, creating Civil War tokens, only they paid private mints to make them. I don't know what they cost, however. They may have been cheaper than 1 cent.

 

The cent (and the nickel) must be eliminated. Most people won't even bend over to pick them up. You cannot buy anything with 1 cent. Currency is so grossly inflated now that cent makes no sense - except for electronic transactions where the cent can live in virtual form for the rest of it's existence.

Our good neighbors to the north have lived just fine with no pennies for what, like 20 years now? Did they collapse as a country? Many other countries have dispensed with their lowest denomination coinage because it's the smart thing to do. Inflation has eaten the world, that's just how the systems work.

The production and distribution cost of the cent to everyone is WAY more than claimed. After they leave the "3.7 cents mint", consider the millions of gallons of diesel fuel wasted hauling around useless slugs and the manual labor/electricity wasted in the distribution process alone. There are a lot of steps before a coin ends up in a consumers product. Then you eventually give it back and the banks repeat the counting, hauling and redistributing - over and over and over.

 

Canada produced their last cents for circulation in 2012.

 

Typically the cost to the merchants for civil war tokens was from .6 to .8 cents apiece or 60 to 80 cents per hundred.

 

So basically you are saying that merchants will raise their prices, but there is nothing to stop them from doing that whether the cent was eliminated or not. But of course you still have the problem that your competitors may still undercut you.

 

Yes, the penny should go away. Here in Canada, no one gives a hoot or even thinks about pennies. The rounding up or down is at the cash register total, no problem if paying by cash. If by credit card or debit, the full, exact cost is sent to the bank. But, as I have said, as long as Abe is on the penny, the US won't eliminate it.

 

Well, Trump just ordered the Treasury to stop minting pennies. It costs 3 1/2 cents to mint a penny. They are talking about stopping making the 1+ billion cents each year. Since merchants will have to start rounding up & down, they are going to need more nickels. Each nickel costs 13 1/2 cents to bang out. The thing is that Trump himself can't do that. Since it deals with dollars, it has to pass the House of Representatives in some type of bill. I don't think that it would pass

 

But we can strap gold to a rocket and send it to Mars.
This ain’t rocket science folks!
Our beloved Lincoln is going away

 

Two thoughts.

I just did a quick check with the nice folks at coinflation, and the melt value of the metals in a Zincoln is $0.0074316450631063. So, the metal is still worth less than a cent.

Second, want's doing some crazy rounding of transactions part of the plot in Superman III?

 

Superman 3? Got Proof of these transactions?