Abolishing the Cent: new developments

Looks like at least some merchants are saying they can't get enough cents, and they're pushing for Federal legislation to allow rounding to the nearest nickel (because there's currently a patchwork of local laws).

https://www.convenience.org/Media/Daily/2025/1/1/2-NACS-Urges-Congress-to-Address-Penny-Shortage_GR

 

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Who could have guessed that this would not be thought out before doing it.

 

If a retailer didn't have to keep spotless records for tax reasons they could easily just round up OR down.
Who's really causing problems with this

 

WHAT?? A problem with the cent? Who would have guessed that this might occur? Say it ain’t so!!

 

I'll bet they have figured it out but are waiting for orders of implementation from the big Kahunas.

 

The US Mint is charged with providing some of the instruments necessary to conduct commerce. The US Mint provides coins, several denominations. Like any manufacturing plant, there is overhead that is considered when defining a shop rate. This overhead is applied at different rates across all product lines. Some of the cost of making a Penny will still be there after the product line is ended. The cost of making a Penny is very difficult to pinpoint.

 

I’m not trying to be political but these government people can’t even agree on a budget to fund the government. How can they plan this which is more complicated?
And please, don’t make this political.

 

I'm stuck...wth does NACS stand for? Not A Clue Society?

 

A penny for your thoughts ain't worth much these days; especially a politician's thoughts!

 

The number that has not been quoted is total Direct Costs. How much does it cost for the planchets, planchet processing prior to strike, cent dies, cent coin presses and handling for release into the economy. I'm sure that number is above a cent, because a cent can't pay for much these days, but it's lower than the figure of 3.69 cents which is the number in the news reports.

 

Since the cent is no more I'd like to see it available to collectors aka NCLT

 

This got me thinking - what is the hidden "benefit" to the economy by facilitating commerce? I'm no economist so this is just a ramble, but for example let's say there was a law that coins could only be made out of gold. Gold is set at $20/oz, it's not practical to make 1/2000th ounce gold coins, so in an era when stuff was 3 cents a pound it seems like the economy would be stifled in that scenario. Or take the Spanish real that people chopped up into pieces of eight. Coining only the real stifled the economy (right?).

I'm just thinking that there has to be some unquantified benefit to the economy not included in these calculations beyond looking at only the cost to manufacture. Or maybe I'm nuts.

 

In the meantime, we still have gasoline priced in 1/10th of a cent.

 

And stock prices in cents instead of bits or half-bits!

 

The price of gold has little relation to the price of everything else. Back when the $20 gold piece was used in the economy, the price of gold was about $20 an ounce according to the weight of the gold piece ($20.57 to be exact.). Of course the bread winner for the family was only getting $10 to $20 a week, so the price of everything else reflected that.

People like to point to the fact that Henry Ford got the price of a new car down to $290. The trouble is, how long did it take to earn the $290? Much longer than it does today.

 

It's all theater. If they want to truly go cashless they will argue to rounding up to the dollar after they "realize" just how much it costs to make a nickel.

 

I wager the problem is the laws were written before the penny had a negative valuation and were intended to stop merchants from cheating customers out of their hard earned cents.

Most laws are just ignored so ignore these as well. Or if they don't want to deal with stupid they can just always round in the customer's favor. It's way cheaper than counting pennies. Congress ignores laws costing billions. I think the local grocery can risk breaking laws governing pennies.

 

We always get into arguments about rounding, with some folks saying "merchants will always round up when charging you", and others saying "but 6% sales tax means you'll pay an extra four cents on every dollar when $1.06 rounds up to $1.10!"

I'm almost out of patience for pursuing those arguments. (I'll probably never give up on the sales-tax one, since that's just such a goofy assertion on so many levels.)

But let's try this. I go to grocery stores numerous times per week, taking advantage of specials and looking for fresh produce that's, well, fresh.

Let's say that I make a grocery run every day. (In reality, it probably averages out to somewhere between 2/day and 0.5/day, so we're close.)

Now, assume that:

1. Cents go away.
2. I always pay in cash (credit/debit cards don't care about coins).
3. Those nefarious grocers always round in their own favor.
4. On every single shopping trip, I somehow manage to come up with a total bill that ends in .01 or .06.

In this worst of all possible universes, I'm being ripped off to the tune of... 365 * 4 cents, or $14.60 per year.

And you know what? I'm completely okay with that. I get back a lot more than that in promotional offers from the grocery stores anyhow.

 

Yes, of course. But my point was - what is the economic benefit for having small denominations and what is the detriment (if any) if those denominations are eliminated? For example, if you're pricing something at $2.99 to psychologically attract customers, now you have to price it $2.95 instead. Walmart alone had 93 billion customer visits in 2024. Even if the economic impact of eliminating the cent was only one cent per visit, that's $930 million. The impact could be good or bad, but has anybody really quantified it? All anybody seems to talk about is how much it costs to make them.

 

I could say it this way. if those politicians actually had to stand in line at the grocery store we'd have lost pennies back in the 1970's. They have people to make transactions and then cook the food. If you don't care about dollars and credit cards why would you worry about pennies.