Wow a lobby hey? Weird. I'm reading their website right now, it's interesting to see how they spin the misinformation. Like "rounding will result in higher prices", "pennies add up to millions for charities" etc. The higher prices myth I've already addressed, but the charity one is new to me. It seems to me that eliminating the penny might be beneficial to charities that are funded in part by donation boxes. Who's to say that these millions of pennies won't be replaced my millions of nickels? I tend to just throw some of the smaller coins from my change into the pot (if not all my change), and if there aren't any pennies I will probably get rid of the nickels and dimes instead. So I have my doubts about this claim. Swedish rounding has been in use in several countries like Sweden (obviously) and Australia for several years, and it hasn't caused any problems there.
Regardless of the increments of exchange, businesses will still have to compete for our money. Removing the penny or nickel from circulation doesn't translate into a get-rich-quick scheme for businesses.
I'm curious how a retailer (like Walmart for example) would do this, considering the infinite possible combinations of random items that a customer can have in their shopping cart. I would think that this would be nearly impossible mathematically to do this in a way that would ensure that more purchases are rounded up instead of down - and all for 2 cents per customer transaction? I'm not trying to be argumentative, I'm really just curious how that could be done. I've heard this argument many times and I still don't quite understand it. It is still a competitive free market economy. Ultimately prices are still determined by supply and demand. If one retailer chooses to round a price up, that leaves the door open to their competitor to round it down. (Better yet, undercut the competition by more than just a nickel - but then that's how things work already.) I fail to see how rounding can possibly have any significant effect on the average customer. Think of how many transactions you conduct in cash every day - even if you average 10 transactions a day, and you are unlucky enough to have all of them go against you (one in a thousand chance of that), you lose 20 cents. It's interesting that you mention half-cents. Imagine that we had half-cents up until today, and that we were abolishing it. Would you really care that prices were going to be rounded up to the next whole cent? or that prices would now be in whole cents and not half cents? Like somebody already mentioned, gas prices have always been in tenths of a cent - so why aren't we upset that they round our gas purchases up the nearest whole cent?
Such misinformation. It does not matter WHAT the retailers charge since the rounding ONLY Occurs on the final bill. The absolute MOST anybody would ever pay on a rounded up bill would be 2 cents. It doesn't really matter if the individual pieces cost $1.02 or $1.05 as the rounding occurs on the final bill. Retail establishments could only EVER get an additional 2 cents out of each "individual" customer. Most customers don't give a fresh frog fart about 2 cents any way as instead of carting it around, they'll drop it in the penny barrel or the donation box! BTW, the Half cent was eliminated because there was no longer a need for it just like there is no longer a need for a one cent coin despite the squirming and figeting that groups who like to "waste taxpayer money and then whine about government spending" do. BTW, when someone figures out how to stop inflation, then and only then would I ever consider price increases to be unjustified. Until then, price increases are just a way of life which no individual or group of people has ANY control over since it is a free country.
It might just have an impact on your hobby in twenty years when there's no new generation of collectors. Having an obsolete coinage system is having an impact today on efficiency and sales.
This is the problem in a nutshell; as long as we have lobbyists distributing money for votes we won't have common sense.
I don't "shop" for gasoline. Sure I'll buy from the cheapest station but I won't drive an extra mile or two to save 3 cents per gallon. Why? Simple, I buy in ten gallon increments, sometimes 11 gallons and its pointless to waste 1/10 or a gallon of gas just to save 33 cents tops. Heck, even driving to save on 6 cents a gallon is kinda pointless. Now, if I had a hundred gallon tank, it might be different but its still only $3.00 savings. The point I'm trying to make is that if a retailer raised their prices by 1 cent for each and every product they sell, it's just NOT going to break anybodies bank. 100 different items would amount to $1.00 which won't even buy you a cup of coffee anymore.
I'm speculating the reason we are actually going ahead with demonetizing the penny in canada is that pennies here are made of plated steel, and represent a fraction of the steel market that is tiny in comparison to the US pennies share of the zinc market.
Penny's are copper plated steel in Britain as well. Their coins are much better quality than the zincolns.
I meant that using a credit card has no impact on my hobby; i.e., I don't go to banks to search for 40% Kennedy halves, etc. As far as what will happen to the hobby, who knows? In my case, I'm old enough (52) that I should be able to avoid a big loss when I unload my collection in 20 or so years; perhaps even do a bit better. But I think it'll be the kids of today's kids who'll have less and less interest in coins.
Just for the record, I think that eliminating the cent would have a very minimal impact on consumers but could return big bucks in savings to the government.
i have a question, if they actually stop making and using pennies, will there be hoarders? and would their value go up?
There will be hoarders but any value increases would probably be minimal since billions would always be a mouse click away for the next 25 to 40 years.
One upside might be that with cessation of production, melting could be allowed. Then my hoard of copper cents should go up in value considerably.
Well, if you want to change that you will have to change the constitution and get rid of the right of the people to petition their government for redress of grievances. Heck just make this nation a dictatorship and hope that the dictator has common sense. I am all for keeping the cent, tho its composition might be changed. There are so many in circulation I think that they could quit producing them for a few years and not have a shortage.
I keep hearing here that the final rounding will be tallied at the end of the bill, not per individual item. Legally, this is incorrect. It might be the case in Sweeden or wherever, but this is the US, where items are taxed individually. Therefore, each item will have to be rounded to obtain the proper tax. I find it funny. I hear people griping daily about things being taken away from them by the government, and here we are, advocating them taking away more buying power from us. A cent alone doesn't buy much, but neither does a dollar. Throw a few together and you have some purchasing power. If they want to round my purchases up (and you know as well as I do it will always be up) then they had better round my taxes down every year. Guy
I think the Mint should just lower it's production each year, perhaps down to a 1/10th of what it is now. Seriously, we have so many pennies in circulation, is it really necessary to produce so many each year?
Eevn if production stops, I believe the cent would still circulate, just because its easiet to pay with I think.
Years ago, before inflation went through the roof, many states issued decimal cent coins called mills, which were used for sales taxes. That went bye-bye and everyone just paid tax to the nearest cent rather than a tenth of a cent. I don't think we will miss the cent at all, although the government might just mint them as proofs for collectors. Then they could show a sizeable profit on the lowly cent instead of a loss. IMHO
