Comment by Night_Thastus
5 hours ago
I'd say screw it, get rid of nickles and dimes as well. Quarters can stay, for now.
It's a complete waste of money and time continuing to mint such low-value currency. It can't be used for just about anything.
Unfortunately, I do see the problem with part of this. For a handful of items where it does matter, it will force people to use cards more if they want to avoid rounding. And the card providers already have a choke-hold on retailers, and the whole thing is basically a scheme that funnels money from the poor to the wealthy via interest and fees on the consumer, interchange fees, and rewards programs.
I know you're referencing more than pennies, but to speak to pennies, I find the current rounding noise in the US to be weird. Likely, it's just more of the media, talking heads, and youtube personalities trying to turn a nothing into something, story.
Back when we did it in Canada, I don't recall a single person I knew concerned about penny rounding. Everyone was sick of pennies. No one cared. Everyone was happy. And the math seems fair enough:
https://www.budget.canada.ca/2012/themes/theme2-info-eng.htm...
Basically, if something is $1.01 or $1.02, you round down. If it's $1.03 or $1.04, you round up. Rounding is to be applied after all taxes are paid, etc.
Of course, there was also central guidance and, well, everyone just followed it. It's called "having a society".
People blathering on about stores fixing the rounding are morons, there's no way to do so if you buy more than one item. No one gets ripped off with the above method. In the end, it just works out.
And really, who cares?! It's a penny.
As the article points out, there are laws that say people who pay via SNAP debit cards "cannot be charged more than others".
If cash payments are rounded down, but debit card payments aren't, they are in violation of state law.
The article also points out that rollback of pennies in Canada and other places were planned, addressing these kinds of issues. USA is doing it with no such planning.
> there are laws that say
Hmm, maybe this is why it should be handled by Congress and not at the whim of the executive. They can handle all this in one piece of legislation.
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The article also points out that some states and a lot cities require retailers to provide exact change. Congress would need to pass legislation to allow rounding nationally. I'm guessing in the meantime they'll continue holding pennies from previous years?
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I don't want to be glib, but hey what the hey. This is how you can see that the United States is in decline; it can no longer discontinue a coin through legislation.
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So, round down debit cards too? This seems like a really easy problem to solve.
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Charges take into account severity of the crime and intent. Nobody is going to get criminal charges for rounding pennies on cash transactions.
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Generally in accounting, insignificant amounts are... insignificant (like how tax calculations are rounded to the dollar).
Please don't strawman this, there is ample evidence for rounding pennies on everyday transactions.
Can you not argue that the average is the same and thus the law isn’t violated?
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More annoying especially during the SNAP gap due to the shutdown the law forbids differential pricing in general so shops couldn't offer lower prices for EBT/SNAP customers as a way to help their neighbors.
I'd be amazed if prices weren't engineered so they rounded up far more often than down.
Is that even remotely possible?
You'd have to ensure a positive expectation value over not only every item, but every combination of items a consumer could by. You could focus only on the most likely possible orders (assuming you have the data, I don't know how many stores actually track combination of items bought), but it's not obvious to me that there's a tractable top n most likely orders that gives a reasonable enough estimate of expectation value.
On top of that, you would be interfering with whatever system you already have that sets the cents of each item (whether marketing with 99¢, or % discounts, or a system that tracks that 97¢ means lowest sale, etc).
When the US attempted to transition to the metric system, gas stations raised their prices per unit volume and the American consumer was convinced that the metric system was bad. I have family that think metric is bad because some fringe people thought there should be 10 hours in a day and 100 minutes in an hour, also something like 10 months a year, and the whole thing is bad because some awkward ideas were floated.
Here, it's a question of resolution, with a proven history that transitions screw the consumer, though maybe it won't be so. We're ok with arbitrary hundredths of a dollar, why were we not at thousandths? The American half cent disappeared a long time ago. You still need to include the cents in a tax bill that runs into the millions of dollars.
It's just an awkward stage in inflation. Eventually a US dollar will be worth what a Zimbabwean dollar was, and we won't have $100 bills anymore.
During the French Revolution, they tried to make a right angle have 100 degrees and even recomputed all new trig tables for this new standard. It obviously did not catch on :)
https://en.wikipedia.org/wiki/Gradian
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> You still need to include the cents in a tax bill that runs into the millions of dollars
Not in all cases. The IRS does not use cents when you file your tax return, they say round to the nearest dollar.
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>> and we won't have $100 bills anymore.
Heard some pundits on the radio talking about the elimination of the penny and one of them who worked at the Secret Service as an analyst talked about why the US paper money only goes to $100 bills. He said it was to reduce criminals and illicit activity and criminals having to store it.
He related the story of Pablo Escobar's brother or cousin who was the accountant for the cartel. He said they were losing billions of dollars every year because of various kinds of attrition like rats chewing up the money, it getting too wet and disintegrating. They were losing so much because they had to store it and that wasn't always the best because they had so much of it on hand which seemed to lend credence to his story.
So if you were to get rid of the $100 bills that would further erode the ability of criminals to store so much of it.
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Nobody wants 10 months in a year. What we want is 13 28-day months a year plus one or two intercalary days. But organized religion gets in the way.
> Likely, it's just more of the media, talking heads, and youtube personalities trying to turn a nothing into something, story.
It's not. Some US states have laws on the books that make it illegal for retailers to round up. The turmoil is that if the retailer can only round down to the nearest five cents, then they stand to lose from one to four cents per cash sale for any sale that is not a multiple of five cents. Add those one to four cent losses up over a large enough number of transactions and the retailer stands to lose a considerable sum over the course of a year. And many retail shops already operate with thin margins anyway, so the loss from "always round down" could erase whatever thin margins some shops already operate under.
> then they stand to lose from one to four cents per cash sale for any sale that is not a multiple of five cents
Which is much less than they're paying the CC companies on card sales.
If it means shops stop charging $4.99 and start charging $5.00, I will be ecstatic.
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They can add a "total not divisible by 5" fee, ranging from 1 to 4 cents
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Er... So just adjust prices to whole multiples of 5 cents? Helps math-challenged cashiers too...
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If your shop can be wiped out by losing that little on each transaction it wasn't long for the world anyways... Retail margins are thin by industry preference but they're not 1-4 cents per transaction thin.
Things have always been rounded (tax). There's just a change in what multiple it's rounded to.
And in inflation-adjusted terms, rounding to the nearest nickel now is about as significant as rounding to the nearest penny was in 1978.
Watch 'Pop' (Malcome McDowell) in Son of a Critch :) . I don't remember the episode/season.... where he goes on and on about some $1 bill that will be decommissioned and goes to the bank to get some...
I think people underestimate how many stores used to set prices to avoid pennies. When I was a kid it was frequent. Goose the price so cost + tax rounded to the nearest nickel. But now everything is 23.99 or sometimes 23.95, and they use the pennies place to denote clearance items. Like 19.94 or 3.98.
There’s a reason for this. Prices that force cashiers to make change force them to run the transaction through the cash register so it is recorded, and the amount in the register can be checked at the end of a day or shift to detect theft. If prices are round numbers, such as $1, the cashier can pocket the payment.
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There are already stores in the US that are rounding their transactions because of the penny shortage that is already happening. Many are just simply rounding all transactions down to the nearest $0.05.
And the reality is that with most price tags ending in .99, retailers will actually round down to .95 to preserve the psychological benefit of not crossing a dollar barrier.
Growing up in Australia 1 cent pieces were gone before i knew what money was. Coming to Canada in 2009 on a trip, i was shocked to see them. They were annoying and instantly drove me crazy, but i felt bad throwing them out. I threw them out anyway, helping reduce inflation
> It's called "having a society".
That must be nice.
Rounding is such a weird boogeyman to me because people are like "the companies are just going to use it to get more money from the customers" but, they're doing that anyway. They don't need this excuse to raise prices they'll just do it anyway.
Same thing when people complain that raising minimum wage will increase prices, meanwhile prices have increased for 50 years completely separate from wages. They don't need the excuse to raise prices they're just gonna do it anyway.
If they want companies to not raise prices the only answer is regulation, but regulation is communism and therefore bad.
I'm so god damn tired.
Let's face it, these arguments are simply post hoc rationalizations. If the proposal were instead to introduce a "milli" coin people would find some way that meant you were getting ripped off too.
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> If they want companies to not raise prices the only answer is regulation
Or competition. Consumer electronics are much cheaper than they were in the past, and that's not because of regulation. (To be clear, I'm not saying that regulation is wrong or anything, I'm saying that "use regulation to lower prices" and "remove barriers to competition to lower prices" are both tools in the toolbox.
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Right. Most gas stations list prices ending in 9/10 of a cent.
Media is just doing media things, ignore them. Nobody I know has even mentioned the penny thing, let alone expressed a strong opinion about it. From my perspective I have seen zero evidence of the American public caring one iota.
> Basically, if something is $1.01 or $1.02, you round down. If it's $1.03 or $1.04, you round up.
So everything's going to be $1.03 or $1.04. Not sure why you think retailers (or any sellers) would ever, ever, ever let this play into customers' advantage.
But apparently pointing out that obvious truth makes me a "moron," because you can think of some clever ways to get around it that retailers surely won't work around.
If you buy two things at $1.03 or $1.04, it's $2.06 or $2.07 and rounds down to $2.05 more often than it's $2.08 and rounds up to $2.10. That's not "some clever ways." That's so basic it's absurd. They don't know how many things you're going to buy. They don't know how many things anyone is going to buy. There's no way to game the entire system for every combination of things people might buy.
Never mind this: When was the last time you bought something in person, in cash, and bought only one thing? Just think it through for a second.
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Are we pretending that nobody has ever tried phasing out smaller denomination currency, and that we don’t have a vast body of actual case studies to draw from? Why are we running thought experiments at all?
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but then you buy 2 things, and it's $2.06. round down! or you buy 4 and it's $4.12. round down!
it'll come out in the wash. there are much bigger things to worry about.
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> So everything's going to be $1.03 or $1.04.
Rounding would apply on the total transaction, not individual items (because otherwise the individual posted item prices would just be false.) So, if there is an abuse route with round-half-down, it is that optimizing buyers would structure purchase to always total $x.01 or $x.02, possibly splitting planned purchases into multiple purchases to achieve that.
But even that isn't realistically a significant issue.
What percentage of people live in a jurisdiction without a sales tax? In my local area, sales tax is 8.8%. And if you take the bridge across the river, tax is 8.9%. So there is already rounding involved, $1.03 becomes $1.12167. Unless of course you bill also includes a mix of taxable and non-taxable items like food, etc..
In practice most items are x.99 anyway.
Sales taxes already result in rounding, which the store could try to take advantage of. They never do. They set prices to end in 99 because it's psychologically more attractive. That will most likely continue. If they're required to price in multiples of 5, we'll see prices ending in 95.
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Sales tax gets applied first.
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The half-penny was discontinued in 1857. Adjusted for inflation it was worth 37 cents in todays money when it was discontinued.
But add a $3.50 coin so that we can strongly incentivize coffee to stay below a certain price.
I know this is supposed to be a joke but... businesses have pushed for this the other way around in the past, asking for a new coin to raise prices.
> The Coca-Cola Company sought ways to increase the five cent price, even approaching the U.S. Treasury Department in 1953 to ask that they mint a 7.5 cent coin. [https://en.wikipedia.org/wiki/Fixed_price_of_Coca-Cola_from_...]
The wikipedia article says that this was specifically the price of a 6.5oz Coke.
The obvious way to raise the price by 50% is to cut the amount by a third, selling 4.33oz Cokes.
https://www.reddit.com/r/BottleDigging/comments/1kng6aq/coca... suggests that Coca-Cola was comfortable producing bottles in several different sizes.
Now, a 4 1/3 oz Coke is obviously too small to be worth bothering with. But that's also true of a 6 1/2 oz Coke. These sizes seem more like something you dispense with an eyedropper than something you drink. A normal can is 12 oz! Who'd want to buy a six-ounce beverage?
You can address both problems at once by doubling the price and increasing the volume all the way up to 8.67 oz.
Just take a zero out of everything and change the name from dollar to something else!
*dllar*
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There used to be a $10 coin called an eagle, may as well be violently American and call it eagles.
US Peso
Night City eurodollars?
Decadollars
100 dollars = 10 decadollars
USA Fun Ticket
One of the things I admire most about Italy is how they have held the line on the price of an espresso.
It’s still just slightly over €1 if you drink it standing at the bar.
They really have their priorities straight when it comes to food and drink prices.
My local just went from $3.50 to $4 this week :(
Gourmet high-end Keurig pods are like $0.50 each. Make your own coffee.
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Also for the memes…
It would be exceedingly funny is 75% of the value.
Maybe make it be a $3.33 coin?
$0.67 coin is on the way
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It's worth about $2.70
The last time a coin was dropped was the half penny in the late 1850s, when I think it was worth about 25 cents today, so there is a precedent for what you are suggesting.
CCP Grey has a nice video and discusses the precedent: https://www.youtube.com/watch?v=y5UT04p5f7U
A noticeable number of places around me in an urban area in the USA already now have signs up saying they won't make any coin change at all! Pay with a card, or exact change, or they'll round up to the dollar keep the difference.
Sometimes the sign says "due to the penny shortage" and has been up for a year or whatever, I dunno. But they aren't just not giving you pennies in your change, they are refusing any coins in your change. I am curious as to the motivation, I could guess but it's not obvious to me. They will still take coins as payment, just not give them as change.
You can either put payments into the register or the safe.
If it goes into the safe, it's nearly impossible to steal because there's a time lock preventing the cashier from accessing it. But you can't make change.
This means you have a optimization problem to have the minimum possible cash in the register to meet all change needs.
Eliminating denominations makes the optimization problem easier, if nothing else.
[delayed]
If the Pennies go away, you can no longer get things for pennies on the dollar.
The famous little jingle "shave and a haircut, two bits"
Most people today have no clue what a "bit" is.
I imagine the future will hold something similar for the penny in all the idioms and cultural phrases we have. What the hell is a penny?
Exactly. Two bits is a quarter because the US silver dollar was modeled on the Spanish Pillar Dollar, also called pieces of eight. Hence 2/8 (two bits) = 1/4.
What is a bit, a penny?
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Soon one can no longer add 2 cents to a discussion.
Governments should simply put a cap on credit card merchant fees of half a percent or something like that, which I’m pretty sure is what they do in other countries. Problem solved.
Nickles are likely to go shortly after. You can do everything you can with nickles with dimes and quarters, nickles have worse economics than pennies, and have had their minting suppressed below the market needs for years. Once pennies leave circulation, the problems with nickles will become urgent and they'll quickly leave.
Dimes are small and cheap to make though, so they'll probably stick around.
Rounding to a nickel has the advantage that's it's both simple (1, 2, 6, and 7 round down; 3, 4, 8, and 9 round up) and fair (there's no systematic bias in favor of the buyer or seller).
Dimes need to deal with how to round numbers ending in 5, making them unfair, or (with a more elaborate system of looking at both digits) complicated.
Quarters (being an odd value) are fair, but kind of a nightmare to memorize all of the values that round up or down (1–12, 26–37, 51–62, and 76–87 round down; 13–24, 38–49, 63–74, and 88–99 round up; and I'm not even sure I don't have an error in those numbers).
Also it's awkward if a higher-valued coin (e.g. quarters) isn't divisible by the least valuable coin (e.g. a dime)
It's impractical to eliminate the nickel and penny, while keeping the quarter and dime. The most practical way forward is to keep only the dime, but people will be quite upset about the loss of the quarter.
It might be a little bit cumbersome, but I don't think it's impractical.
With only quarters and dimes it's difficult to pay $0.05 or $0.15, but it's possible. If I owe you $0.05, I must give you a quarter and you give me two dimes. Or I give you a $20, you give me $19 in paper money, three quarters and two dimes. If I owe you $0.15, I must give you a quarter and you give me one dime. If I owe you $0.95, I can't give you $1 and get change, I'd need to give you $1.25 and get three dimes back. Or give you $2, get three quarters and three dimes. Owing $19.95 or $19.85 would be most inconvenient, since many people seem to live life with only $20 bills in their wallet and there would be a lot of extra change required.
But, if we stopped minting pennies because they cost too much (3.7 cents), it's hard to imagine we're going to keep producing nickels when they cost 13.8 cents to mint. Dimes are much cheaper than nickels (5.8 cents), and quarters aren't too bad relative to face value (14.7 cents). Article with values [1], which I rounded to millidollars. I'd bet people would rather keep dimes than quarters, but rounding everything to quarters is a big step. I certainly would prefer quarters --- it's been a long time since arcade machines took dimes, and I only have quarter mechs (most of my games are on free play, and I can reuse the quarters I need forever, or add a credit button, but still).
[1] https://www.nbcphiladelphia.com/news/national-international/...
> Quarters can stay, for now.
I'd say just drop the second decimal place and have dimes and half-dollar coins.
While minting this currency the government continues to nickel and dime the American people.
Some people are poor. Did you know that? Some people live in poverty. I'm sure that is a big surprise to you. Some Americans still have to spend nickels and dimes. Crazy, right? Some people don't have infinite Bitcoin from mommy and daddy.
I'm in favor of keeping dimes.
However, to put it into perspective, a dime is only 50 seconds of labor at Kansas' minimum wage ($7.25/hr).
It's hard to find a situation where a dime truly makes much difference. And remember the rounding. You won't always lose 10c just because dimes don't exist.
also bring back the 50-cent piece, eliminate the redundant dollar bill, and replace the 2 dollar bill with a new 2 dollar coin
i want them to make coins for all the current bills, and expand bills to higher amounts. Cash has not kept up with inflation.
Also, we can store 1/4 exactly in binary, but not 1/100, 1/20, or 1/10. So that solves another problem.
>I'd say screw it, get rid of nickles and dimes as well. Quarters can stay, for now.
Let's do it like Japan does, only one type of currency. And that currency will be the penny. One dollar note? No buddy... that's a one hundred cent note now.
We may or may not continue to mint one dollar coins (previously one cent coins), but everything will make... cents.
(I guess this style of humor is better delivered verbally?)
The sen still exists. There's even a few 50 sen coins still floating around.
JPY has the benefit that people probably don't try to use floating point numbers for currency. (ignoring the central joke of your comment)
Why is everyone talking about rounding?
I've read there's enough pennies in bank vaults to last for years.
Nothing avoids rounding.
Quick, someone file a trademark for “Take a Quarter, Leave a Quarter”
Only if the increased revenue from rounding doesn't go into retailers pockets but rather is redistributed somehow. i.e. to reduce sales tax
I’d like to see an estimation of how often coinage is actually used. I play a lot of pinball so I handle quarters frequently but I can’t really think of what I do with the smaller denominations except collect them in a jar.
I wouldn’t mind having larger coin denominations though. Dollar and five dollar coins would be very convenient.
It's a little silly. The smallest denomination the US has ever had was a half cent. In terms of relative purchasing power, it was more valuable than a dime is today. The country didn't collapse.
> It's a complete waste of money and time continuing to mint such low-value currency. It can't be used for just about anything.
The problem: the dollar is almost global in its usage. The penny may not be important to the US, but it dam well is every where else where dollars are still in use frequently, along side, or in place of the local/native currency.
Getting rid of the penny will have implications, getting rid of more coins would endanger the use of the dollar globally.
There is still a large portion of the world where 100 dollar bill and a Rolex will get you home safely.
Approximately nobody uses US coins outside the US. Even in countries where the dollar is widely accepted, trying to use coins will get you weird looks at best.
Countries like Ecuador that use US dollars mint their own coins for local circulation.
https://en.wikipedia.org/wiki/Ecuadorian_centavo_coins
As far as I am aware, USD is used for larger amounts in such countries. Smaller purchases are made in the local currency.
In what part of the world do they use US pennies?
The US currency system sure. But pennies, specifically?
Before Canada stopped using its penny, it was common to find American pennies in circulation.
It's still fairly common to find American nickels, quarters and dimes in circulation. (Probably mostly dimes if I had to guess.) They're generally accepted at par because nobody is even really looking at them and if they did it wouldn't really represent being, well, short-changed.
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There are also plenty of places where flashing a 100 dollar bill and a Rolex will ensure you don't get home at all.
> The penny may not be important to the US, but it dam well is every where else where dollars are still in use frequently
[citation needed]
And hell, put Bank of Zimbabwe on the bills.
I don't like inflation either. The fact that it's 'normal' or 'required for growth' to me sounds like economic bollocks and a lot of pretending that it doesn't cause issues in the long run.
But it's here to stay, nothing we can do about it.
> The fact that it's 'normal' or 'required for growth' to me sounds like economic bollocks
Please see: https://www.youtube.com/watch?v=CnoDKqlcR4Y