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 Post subject: Penny Costs 1.23 Cents to Make; Nickel, 5.73
PostPosted: Wed May 24, 2006 2:02 am 
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Scrap 'em! Who needs a penny anyhow?

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Pretty penny is in a pickle
It costs 1.23 cents to make -- a dime costs less than a nickel
Vicki Haddock, Insight Staff Writer
Sunday, May 21, 2006

Penny-wise, we're starting to look pound foolish. It has just become more costly to produce a penny than a penny is actually worth -- which suggests it's time to re-examine why we even bother with the runt of the coin litter.

The penny is in oldest U.S. coin, originally proposed by Benjamin Franklin and made with copper donated in part by Paul Revere. In 1909, its heads and tails were redesigned to commemorate the 100th birthday of Abraham Lincoln. And in 1982, its composition was recalibrated to combat the rising costs of copper.

Now, for the first time, the U.S. Mint has confirmed that because of soaring metal prices, the lowly cent, now made mostly of zinc wrapped inside a shiny copper skin, will cost an average of 1.23 cents to make this year. (A dime still costs less than a nickel to fashion, and a quarter costs less than a dime.) Not that penny-ante irony is giving Uncle Sam second thoughts: the undaunted Mint is on track to produce 8.7 billion new pennies this year.

This factors out to a loss of about $20 million a year -- not exactly chump change, even for an operation with a license to print money.

The penny's obvious handicap, of course, is that virtually nothing costs a cent anymore, not even a gumball. Cities have replaced their antiquated penny parking meters with new models that accept only larger coins or debit cards. Given inflation, a dime doesn't even buy what a penny used to purchase.

Nor is the prevalence of pennies -- more than four rolls' worth for every man, woman and child in the United States -- a benign blight. They weigh down our pockets and purses and retard our retail transactions. The National Association of Convenience Stores has calculated that penny use costs people 2 to 3 seconds more per sale -- and that delay increases exponentially when there are lines at cash registers. Stores spend 5.5 million hours a year just counting their pennies, and the esteem in which shoppers hold them is evidenced by those ubiquitous "Give a penny, take a penny" trays at many checkout counters.

Most U.S. pennies aren't even in circulation, instead languishing in obscurity at the bottom of a coffee can, pickle jar, sock drawer or sofa cushion, or stuck to the floorboard of a minivan. In the typical home, pennies exist in utilitarian limbo alongside expired grocery coupons and dead batteries.

Production of more pennies also extracts a toll on our natural resources, not to mention taxpayer-funded operations. Former Treasury Secretary William Simon once had this advice about the penny: "Get rid of the damn thing. If we'd abolished it years ago, we wouldn't have had to open the Denver Mint."

Ridding the nation of a coin be unprecedented -- Congress eliminated the half-cent coin in 1857 -- and the republic weathered the loss. Other countries have abolished low-denomination coins, including Britain, France and Spain. And two decades ago, the United States ended the use of the penny at overseas military installations, to save the cost of transporting them. The General Accounting Office observed that after initial complaints, the penny's absence became accepted.

So what has prevailed to preserve the penny?

Sentimentality, for starters. Unlike in other countries, no living American has ever been forced to surrender one of the nation's coins to the ravages of inflation. Surveys show that Americans have a nostalgic bond with their pennies, recalling their own childhood piggy banks, their trips to buy penny candy, the time they cashed in enough pennies to purchase a modest engagement ring.

Coinstar, a Washington state company that makes coin-counting machines, polled 1,000 Americans last year and reported that although one-fourth of respondents were ready to scratch the penny, about two-thirds preferred to keep it. More amazingly, more than three-fourths said that when they see a penny on the ground, they stoop to pick it up (presumably they don't frequent San Francisco's Market Street).

Surveys reveal an unmistakable generation gap, with older Americans particularly attached to the penny. Coinstar found that almost half of the respondents under age 35 admitted to having thrown a penny away at least once -- four times as many as older people, who found such wantonness appalling.

Poorer people, too, are among the penny's staunchest defenders, perhaps lacking the cavalier attitude of affluent Americans who don't know what it's like to pinch them. A Harris Poll in 2004 found that people in the top income bracket were twice as likely to support abolishing the penny as those in the lowest income bracket.

Their apprehensions may be justified, because some economic research indicates consumer costs will edge higher in the penny's absence, as merchants round prices up instead of down. There is conflicting research as well, which suggests merchants may be more likely to round down, because cents are often incorporated into prices merely to give the illusion of lower cost (a merchant might round a price of 98 cents down to 95 cents, for example, to preserve the lure of pricing under $1.)

Even so, one Penn State economic analysis concluded that rounding cash sales to the nearest nickel would cost consumers more than $600 million a year.

The penny also is a popular and effective charity gimmick. Jars that invite buyers to drop in their change raise impressive sums, predominantly in pennies, for good works like AIDS research. UNICEF enlists children to collect millions of dollars in pennies for world relief. Even now, a guy in Miramar, Fla., is stacking a ton of them -- that's 300,000 pennies -- into a passive pyramid in his dual quest to break the Guinness world record for coin-stacking and raise public awareness of colorectal cancer.

Even if the penny were sent packing, it would just move the nickel onto the hot seat. The Mint now projects its cost this year at 5.73 cents. So much for getting your nickel's worth.

E-mail Vicki Haddock at vhaddock@sfchronicle.com.


http://www.sfgate.com/cgi-bin/article.c ... IU65I1.DTL

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 Post subject:
PostPosted: Wed May 24, 2006 2:08 am 
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to quote steven wright, or maybe george carlin


its a penny for your thoughts, but everyone puts their two cents in. someone is making some money somewhere

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PostPosted: Wed May 24, 2006 4:11 am 
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Peeps wrote:
to quote steven wright, or maybe george carlin


its a penny for your thoughts, but everyone puts their two cents in. someone is making some money somewhere


That's a great quote! Never heard it either.

I thought WE were getting rid of the penny. I recall a thread back in the day on this, and that it was in the works for some distant year. Seems like a bit of work making everything come out to an 0 or 5 at first but once done will save so much time and money. I hate counting penny's.

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 Post subject:
PostPosted: Wed May 24, 2006 4:41 am 
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IEB! wrote:
Peeps wrote:
to quote steven wright, or maybe george carlin


its a penny for your thoughts, but everyone puts their two cents in. someone is making some money somewhere


That's a great quote! Never heard it either.

I thought WE were getting rid of the penny. I recall a thread back in the day on this, and that it was in the works for some distant year. Seems like a bit of work making everything come out to an 0 or 5 at first but once done will save so much time and money. I hate counting penny's.


what's the hard part of making everything come out to 0 or 5? we used to have half pennies, and i dont recall ever hearing any problems transitioning only to whole cents. the penny from 50 years ago is worth more than today's nickel. i say drop those too


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PostPosted: Wed May 24, 2006 4:56 am 
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Down with currency. I deal only in handshakes and smiles.

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PostPosted: Wed May 24, 2006 4:59 am 
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Puffin wrote:
IEB! wrote:
Peeps wrote:
to quote steven wright, or maybe george carlin


its a penny for your thoughts, but everyone puts their two cents in. someone is making some money somewhere


That's a great quote! Never heard it either.

I thought WE were getting rid of the penny. I recall a thread back in the day on this, and that it was in the works for some distant year. Seems like a bit of work making everything come out to an 0 or 5 at first but once done will save so much time and money. I hate counting penny's.


what's the hard part of making everything come out to 0 or 5?


The changing of computer systems and signs would cost a lot initially.

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 Post subject:
PostPosted: Wed May 24, 2006 5:21 am 
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I throw all my pennies in the trash, they aren't worth keeping.


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PostPosted: Wed May 24, 2006 5:30 am 
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8.7 billion new pennies? If I searched under every table and chair in my house, inside every drawer, in old cups, etc...I am going to find more pennies than I will spend this year. Who needs these pennies? I bet if they slowly started to phase them out, people wouldn't even notice.

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PostPosted: Wed May 24, 2006 10:00 am 
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i like pennies. but i agree with B: it is time to ditch them.

we can FINALLY be done with the $19.99 type pricing.

what will it be? $19.95 to continue with the illusion that this product is "under $20" or will businesses finally admit that consumers are not stupid and just stick a nice round number like $20 on products?

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PostPosted: Wed May 24, 2006 10:59 am 
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We got rid of our 1 and 2 cent coins here about 15 years ago. No one really cared cos no one used them anyway.

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PostPosted: Wed May 24, 2006 4:03 pm 
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What about sales tax? Will it be rounded up? Will increases now be in nickel increments as opposed to pennies? That could be harsh.


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PostPosted: Wed May 24, 2006 4:04 pm 
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Hinny, what's the smallest value on an Aussie coin? How do you guys handle that? You round it, or is everything at least five cents?

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PostPosted: Wed May 24, 2006 4:11 pm 
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We should get rid of dollar bills while we're at it. Dollar coins are more cost effective, and with all the space in your pocket from the missing pennies, people won't mind a couple more dollar coins.

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PostPosted: Wed May 24, 2006 5:16 pm 
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vegman wrote:
What about sales tax? Will it be rounded up? Will increases now be in nickel increments as opposed to pennies? That could be harsh.


why would that be "harsh"? if an item cost 19.99$ and you have a 7% sales tax.. then the item would have "with pennies" cost you $21.39.

without pennies the item would cost 20$ +7% sales tax = 21.40. not a huge difference.

same thing for different amounts purchase price 26.37? add the 7% tax = $28.22

do away with pennies and purchase price now 26.40 +%7= $28.25

not a big deal.

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PostPosted: Wed May 24, 2006 7:34 pm 
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punkdavid wrote:
We should get rid of dollar bills while we're at it. Dollar coins are more cost effective, and with all the space in your pocket from the missing pennies, people won't mind a couple more dollar coins.


I never understood why the mint didn't push those harder and cut back on bill production. I've only seen one soda machine in my life that took gold dollars.

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PostPosted: Wed May 24, 2006 8:44 pm 
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B wrote:
punkdavid wrote:
We should get rid of dollar bills while we're at it. Dollar coins are more cost effective, and with all the space in your pocket from the missing pennies, people won't mind a couple more dollar coins.


I never understood why the mint didn't push those harder and cut back on bill production. I've only seen one soda machine in my life that took gold dollars.

Well that’s the thing, B. There’s no point in pushing the dollar coins as long as they continue to produce paper dollars. If they stopped producing paper dollars, they wouldn’t need to push dollar coins, they’d just become a fact of life.

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PostPosted: Wed May 24, 2006 9:02 pm 
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Peeps wrote:
to quote steven wright, or maybe george carlin


its a penny for your thoughts, but everyone puts their two cents in. someone is making some money somewhere

Steven Wright--He is so friggin funny, especially when you can see and hear him.

And I'be OK with scrapping the penny, but cutting their production in half or something is probably better, because of what the economist said about costing consumers more money.

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PostPosted: Wed May 24, 2006 10:21 pm 
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B wrote:
Hinny, what's the smallest value on an Aussie coin? How do you guys handle that? You round it, or is everything at least five cents?

That'd be the 5 cent coin.

It's rounded, but if you go to the liqour shop and say you get 5 bottles of scotch and they cost 9 cents each (it'd never happen, but a man ought to dream), you pay the 45 cents.

I use the 5 cent coins for the chocolate bar and coke machines. Just stand there and keep putting them in. This one time, I stood at my uni library's photocopy card recharging machine for an hour or so, and put in about 14 bucks worth of 5 cent coins. That's 280 or so.

Damn machine stopped taking 5 cent coins when I came back from a break in class :evil:

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PostPosted: Wed May 24, 2006 10:34 pm 
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punkdavid wrote:
B wrote:
punkdavid wrote:
We should get rid of dollar bills while we're at it. Dollar coins are more cost effective, and with all the space in your pocket from the missing pennies, people won't mind a couple more dollar coins.


I never understood why the mint didn't push those harder and cut back on bill production. I've only seen one soda machine in my life that took gold dollars.

Well that’s the thing, B. There’s no point in pushing the dollar coins as long as they continue to produce paper dollars. If they stopped producing paper dollars, they wouldn’t need to push dollar coins, they’d just become a fact of life.


This would be horrible, it's enough of a pain in the ass having all those quarters, dimes and nickels in my pocket, the last thing I need is to be losing whole dollars in sofas and down the sides of car seats.


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PostPosted: Wed May 24, 2006 11:00 pm 
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I'd much rather have dollar coins. Whenever I go to the states I get pissed off with all the damn dollar bills. Give me my Loonies and Toonies.


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