Double your money if you're in Ohio

Huh. If only I were up working on Dad's house this weekend. And had more than maybe a roll or two of Zincolns. (Still not ready to cash in the copper cents at 2x face.)

 

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The shortage made it to BBC. https://www.bbc.com/news/articles/c20556ly45eo
"Many stores are now rounding their cash sales down to the nearest five cents, saying there are no federal guidelines on how to proceed... some cities, including New York, require retailers to give exact change and others don't allow cash payments to differ from card payments for the same item... To avoid lawsuits and customer complaints, many retailers have chosen to just round down... Convenience giant Kwik Trip has announced it is rounding down to the nickel, which it says will cost it up to $3m (£2.3m) this year."

There's the problem as I see it in a nutshell. No plan or guidance, just stop making them and see what happens I guess.

 

I still this as the same thing that happened with toilet paper a few years ago. Not a real shortage; just hoarding due to unjustified panic. When the dust settles it will look really silly when everyone looks back on it.

Other countries have done basically the same thing years ago and the sky did not fall.

 

Except Canada didn't do it that way; they never declared their cents to not be legal tender, and they're in fact still legal tender now. They just stopped minting them and distributing them to banks. They also never demanded anyone turn them in (they weren't in any way recalled.) You can still give them to anyone willing to take them. Though pretty much only banks want to take them, and they're the only ones legally obligated to do so. (But as far as the Canadian government is concerned, cents are still money and still worth 1/100 of a Canadian dollar each.)

In other words they did basically the same thing we did, and it didn't result in any kind of catastrophe. (Part of the difference was that distribution of coins is more "top down" in Canada than in America, but still.) People got used it really quickly.

People can get used to anything, given enough time. We should have done this years ago.

 

The pennies are gone. They had no value so they no longer exist. Hundreds of billions of zincolns just evaporated in air and the rest have suffered misadventure or simply tossed in the trash as cumbersome mementos of days when one cent coins had actual value. When they are no longer accepted most people will throw them away as they come out of the woodwork.

The irony is after many cents from after 1964 are quite scarce and they'll be tossed out too because no one has cared and they still don't.

 

While I don't disagree with your premise - zincolns corrode and people throw pennies in the trash - I think you overstate the severity. Obviously there are no hard numbers available so I may well be wrong but I feel I'm not.

I had two coffee cans full of rolled cents in my closet since the 1990's when I searched them and rolled them. They were too heavy and cumbersome to haul to a bank that may or may not even want them, so they sat there. I'm sure I'm not alone.

When offered the opportunity to unload 6300 coins by a store guaranteed to take them (and having carts available to haul them in) I jumped on it. There were many other people doing the same and I'm sure there are many millions of change jars still untapped out there.

 

There's... a lot of that going around these days, it seems.

 

If every cash transaction rounded down by the maximum four cents for every customer, a $3M dollar loss would represent seventy-five MILLION cash transactions. In reality, it's likely the rounding would be evenly distributed between 0, 1, 2, 3, and 4 cents, with an average of 2 cents per transaction, and a $3M dollar loss would represent 150 million transactions.

By the way, while big companies can probably negotiate somewhat more favorable rates, the figures I see for merchant fees on credit card transactions are typically 5 to 30 cents per transaction, plus 1.5% to 3.5% of the transaction total. Somehow, companies manage to survive despite those costs.

 

Kwik Trip has 11.5 million customers per week, almost 600 million per year. It only needs to cost them 0.3 cents per customer visit, 2 cents for every 7th customer, to add up to $3M. (Source: https://finance.yahoo.com/news/kwik-trip-serves-11-5-110400927.html) The point of course is with the murkiness in the law, etc it appears that they are opting to round down to avoid problems, and it adds up. Now look at WalMart, with 255M customer visits per week, over 13 billion per year. They don't all pay in cash obviously.

 

I certainly hope we eventually get a uniform commercial code for rounding, so that all the penny-pinchers can Get Over It and accept a system that's revenue-neutral for both merchants and customers (round down for 1 or 2 cents, up for 3 or 4 cents, not at all for 0 or 5 cents).

I paid cash for a $3.02 total at Harris-Teeter today. I fed the self-checkout four quarters and three one-dollar bills. It gave me back one of the bills. I mentally promised to spend the two-cent bonus at that same store next time I go.

 

Now try $3.04.

 

Supermarkets do this every time there is a coin shortage. It's a cheap loss leader (often less costly than the 25c/pound Turkey) and it gets people into the store.

 

I will at some point. The signs at Harris-Teeter just say "please consider using exact change", and say nothing about rounding, but I assume they'll choose to round in the customer's favor, for the same reasons described in the BBC story you linked.

If nothing else, they'll want to head off the queue at Customer Service of shoppers complaining "the self-checkout didn't give me all of my change"...