I think we all have a fair understanding of what is needed to stay in business. You have a product people want/need, and you produce it better/cheaper than your competition. In this the US Mint & Bureau of Engraving and Printing have a major leg up - they have a product that everyone needs with no competition. This is not necessarily a good thing, as without the fight for survival there is no need to be better, or even good, but this is the nature of the beast. I believe the manufacturing and logistical processes are fairly efficient, so would like to focus on what money will be used in the near future to conduct business and to do so logically, with the primary goal being to make the use of cash simple and less costly. If you want to discuss converting fully to electronic currency, feel free to do so elsewhere please. I would propose the following: Eliminate the cent, nickel, and quarter along with the $1, $2, $5 and $20 bills Redesign the half-dollar to about the size of the current nickel Keep the dime and $1 coin as they are Add a new $5 coin, and a $500 bill This would leave four coins and four bills; each would be 10-50-100-500 counts. There would be no "rounding" in retail - the cost of items would be in ten cent increments. While this may sound extreme, it isn't if you consider the fact that in 1857, when the half-cent was discontinued and the cent became the smallest denomination, the value of $1 was equal to about $370 today. The difference is in the smaller product sizes available now. Before, instead of a can of corn for a $1.79, you bought a bushel for a nickel; things were purchased in greater quantities. Competition will keep costs in line, businesses will adjust, and consumers will be fine. We the disenfranchised will always be so, this will not change or affect us in any meaningful way. The half-dollar would have some small use in vending, but along with the dime would be mainly return change. Finally, all of those dollar coins out there would get used. People would have less metal in their pockets and fewer bills in their wallet. Making change would be simpler, and the cost of manufacturing and logistics would be less. And best of all, there would finally be an end to the non-stop barrage of quarter varieties we have been assaulted with for the last 25 years. I considered having a 20¢ and/or a $2 coin and calculated the average number of coins back per transaction using a $10 bill. Four coins (10¢ - 50¢ - $1 - $5) = average of 5 coins back. Five coins (adding either 20¢ or $2) = average of 4.2 coins back. Six coins (adding both 20¢ and $2) = average of 3.4 coins back While fewer coins received would be less to manage, the additional denominations would add more cost to manufacturing, distribution and handling. Always consider the KISS standard: Keep It Simple Stupid. Considering the sad state of our educational system, I tremble thinking of some newly graduated cashier trying to count out change with six coins to choose from. Most likely people would simply not use certain types, as they do now. They would become obsolete, and we'd be wasting money making them. Bills would be used in much the same way as coinage. The $10 and $50 would see heavier usage, and the $500 would make larger transactions easier. With the recent improvements in anti-counterfeit design this would be feasible. Finally, coin designs. I would eliminate real people on coins and go back to displaying Lady Liberty in all her glory but with changes to better portray our vast ethnic variety. The 2018 tenth ounce gold proof is a great example (see the new half). The $5 shown is just a bit larger than the current half-dollar. Estimated cost per coin: 10¢ - 5.2¢ (+4.8¢ per coin) 50¢ - 13.8¢ (+36.2¢ per coin) $1 - 12.5¢ (+87.5¢ per coin) $5 - 17.1¢ (+$4.829 per coin)Numbers from Money Digest. The half is based on the current nickel, and the $5 extrapolated from the current $1. While the $1 and $5 bills are much cheaper, just a couple of cents each, they do not last nearly as long. Using the old copper cent and current clad metal mixtures the average life of a coin is 30 years compared to less than 2 for the bills. Also vending is much easier with coins than paper. Thoughts? Comments? Outright hysterical laughter?
I've said something similar in the past, although I think the quarter should be the smallest denomination. (When the half cent was discontinued, its value was something like 14 cents in today's money.) I have a sentimental attachment to quarter, half, and full eagles, but I have no illusions about modern consumers' willingness to do math involving a $2.50 coin. But, as I also say whenever I post about this - it's a moot point, because cash itself is on its way out.
Hmmm. Some anecdotal data... I see a lot of effort being put into offering discount prices for food and fuel paid for with cash. All gas stations and most restaurants do this in SoCal in my experiences. I can't tell if that is because too many people were using cashless, thus driving up the cost of fees (which supports the notion that we're going cashless), or if it will be a permanent relationship, thus driving up the use of cash for the long haul.
At one point, places were doing that because adding a surcharge for credit (to cover the fees credit cards charge merchants) was against the credit company merchant agreements. That got thrown out in court some years ago, nationally, I believe. I see arguments that handling cash costs merchants more than credit or debit cards, on account of increased security concerns. But if you're handling cash at all, you've got to deal with those concerns, and handling more of it doesn't seem like it would make a big marginal difference. (I did note that Girl Scouts this year weren't accepting cash when they came to our door. That surprised me.) I would be TOTALLY on board with merchants passing through their fees transparently for ALL payment types. Because that would put pressure on the banks and credit card companies to make their fees competitive. Of course, that's exactly the reason credit card companies fight it tooth and nail.
