Very interesting....they still don't have a proposed choice (or choices) for replacing any of the metals currently in use, although there are several under research. It looks like any that might save considerably on the metal content would require a significant investment from the vending industry. http://news.coinupdate.com/us-mint-releases-alternative-metals-research-and-development-report-4613/
Yeah, I read it earlier. They didn't propose what to do about the cent and nickel since they didn't want to be in the middle of the lobbyists IMHO. To me, they should have one major overhaul and tell the vending industry to suck it up one time. They should drop the cent, drop the current nickel, (or make the current cent worth 5 cents), and at least lay out what a $2 and $5 coin specs would be. This way the vending industry makes one change and are set for decades to come. I know, in my dreams the government would actually not listen to opinion polls and actually do something in the long term best interest......
On the other hand, after four years of study they have finally come to the conclusion that there is no metal composition that can be used for the cent, which has a manufacturing cost not including materials of 1 cent, that would allow it to be made for less than the face value.
They spent that much money to research alternative metal composition for the cent and nickel but ended up with nothing. What a waste imho! Someone ought to stand up and defend the argument why we need to change the composition for these two coins. It's simple - when it costs more to produce than to 'sell', you use alternative materials to reduce the cost - so that it profits the business. Alternatively, they may already profit too much from other coin denominations such that they can suck up the loss from the nickle and the cent? Whatever - just don't increase my income tax too much ;-)
Just curious... didn't the Canadians switch to steel pennies and maybe steel for other denominations? And, didn't they then come to the conclusion to get rid of the penny in February 2013 since there was no way around choosing an effective and cheaper alternative metal? It would be interesting to see how it's going for them as a case study for reasons why or why not the US should follow suit. The US probably produces more coins by volume so perhaps economies of scale makes it slightly cheaper to produce coins. The below picture shows a glimpse of what life's like without the penny for Canada, for better or for worse. http://www.mint.ca/store/mint/about-the-mint/phasing-out-the-penny-6900002
Unfortunately, our congress is the only governing body that can decide to change our coinage - and there's too much politics going on - Too bad it wasn't as easy as our Canadian neighbor did in 2013 when they actually just got rid their cent entirely.
Canada ended producton of their cent in early to mid 2012. The last delivery of cents was Feb 2013, and apparently they have pretty much disappeared from circulation.
Australia has done away with the cent as well. So when you buy things they round up or down. Sadly I noticed that a large number of business owners were not honest and would round up no matter what. It may just be pennies but that adds up after a year.
Here in Europe, cash totals are rounded that way in several countries. And I don't quite see how businesses could cheat when it comes to that. At least in supermarkets (where threshold prices are common) the cash register displays the total, and if you want a printed receipt, you see it there as well ... Christian
Our New Zealand friends eliminated the one cent and two-cent coins after 1988 (1987 for circulation) and demonetized these two coins in 1990. The NZ five-cent coin went away in 2006 after three years of issuing the coin for sets only. (2004-dated five-cent coins are a whole different story.) NZ's lowest coin in circulation, the 10-cent coin, changed in composition from copper-nickel to copper-plated steel.
Both. In Sweden and Denmark (EU, non-euro) this has been done for many years (look up "Swedish rounding" in Wikipedia ), also in Norway and Switzerland for example (non-EU, non-euro). In the euro area, it is done in Finland, Belgium and the Netherlands - i.e. merchants are allowed to round. If they do, it must be done according to the same principles as in Sweden or Canada. In the euro area, the 1 and 2 cent coins are still legal tender even in BE/FI/NL but they are not used much of course. Which means fewer are minted. The alternative could be to make aluminum pieces maybe, but I think they still have that "odor" of cheap emergency money. Personally I much prefer rounding when using cash ... Christian
I don't think rounding would be that bad of an idea, if the rest of the world hasn't had much push back in its use. We (US) already do that with gas at the pump. In fact... maybe after its implementation there should also include tax on advertised prices, since businesses may be taking advantage of rounding up. For example, businesses may be advertising an amount before sales tax that's always at the lowest threshold after tax (e.g. $1.03 or $1.08) allowing businesses to make an extra $0.02 per transaction (of course, things like volume of transactions, the psychology of "$0.99" pricing and its impact on net profits over disregarding it in favor of gaining $0.02 per transaction, who gets the rounded up value by law, etc. needs to be considered). Tax is already included for gas at the pump and in many VAT countries (though of course, VAT and the US sales tax system are very different, just pointing out that I've noticed some VAT countries I've traveled to embed the tax into the advertised price).
Also, out of curiosity, did the countries that stopped producing and distributing cents recall all cents to be melted? I'm assuming then that those funds would simply be deposited as digitized cents into a checking / savings account.
Here in the European Union that is done everywhere. And frankly, as a paying customer I want to know what I am supposed to pay - so anything except the final price on the price tag or shelf I find quite confusing. Of course we basically know what the local VAT rates are, and the receipt will list the amounts. But I don't think that any merchant would be successful if a price tag had some amount and the cashier then said, "oh, but you need to add property tax, electricity cost, etc. to that ..." In most countries around here, coins that are taken out of circulation can be redeemed for a certain period of time. That period may be short, a year or so, or long, as in indefinitely. Christian
all denominations are mostly steel now. re rounding, if it is $4.96, use debit card, no rounding; if it is 4.94 use cash, it is rounded down to $4.90 - won't lead to earlier retirement .
I use my credit card for purchases and get cash back every time . So actually, this rounding system would hardly ever effect me, though I would relatively save a little more for purchases under $4 or so by using cash. And, since a lot of people already use their credit cards, and it looks to work in many other countries around the world, maybe implementing it sooner rather than later is not that bad of an idea.
