Should we get rid of the penny?

[muwarrior69]

A portion of all pricing where credit cards are accepted typically includes the fee(s) that the merchant pays unless it is listed separately. If you believe that the merchant is absorbing this business expense, I think you are being naive.

By stating that a fee is added the customer has the option of paying less with cash. The "mom and pop" stores refusal to accept credit cards sometimes, I suspect, is because they want to hide some of their income from the IRS.

Some resistance to credit cards is cultural. When we visited Portugal, we found quite a few merchants dealt solely in cash.

A few convenience stores I have gone to would only accept a credit card for purchases over 10 dollars.

[Uncle Rico]

A few convenience stores I have gone to would only accept a credit card for purchases over 10 dollars.

There is something to be said about this because of processing fees and whatnot on card purchases.

Ask yourself, who will profit from the elimination of hard currency? 

[rocky_warrior]

Vi$a, Ma$tercard, and American Expre$$

Sorry Di$cover.

But cash isn't "free", taxpayers pay to create it, and business pay to process it - assuming they're bringing in good quantities of cash and not just avoiding the IRS.    Plus money launderers aren't cheap.

[Scoop Snoop]

There is something to be said about this because of processing fees and whatnot on card purchases.

Ask yourself, who will profit from the elimination of hard currency? 

Well, they're not what they used to be, but...the mafia. They loved the restaurant and bar industry when cash was still king. Great way to make money that you could hide. And I'm pretty sure that drug dealers insist upon cash. Some scoopers can answer that question for you (or maybe you can answer it yourself).

OK, I've had my fun. Rocky answered your question. They love it when the cardholder takes advantage of their friendly offer to finance the balance on the cards.

[Scoop Snoop]

Vi$a, Ma$tercard, and American Expre$$

Sorry Di$cover.

But cash isn't "free", taxpayers pay to create it, and business pay to process it - assuming they're bringing in good quantities of cash and not just avoiding the IRS.    Plus money launderers aren't cheap.

Tell me about it! Sheesh!

[cheebs09]

Get rid of the Penny. Bring back Lil Penny.

[dgies9156]

portion of all pricing where credit cards are accepted typically includes the fee(s) that the merchant pays unless it is listed separately. If you believe that the merchant is absorbing this business expense, I think you are being naive.

By stating that a fee is added the customer has the option of paying less with cash. The "mom and pop" stores refusal to accept credit cards sometimes, I suspect, is because they want to hide some of their income from the IRS.

If a merchant accepts cash, he or she has to order it from the bank, have it delivered by armored car, account it, manage it, protect it and deposit what you don't need. And, one inevitably has cash and coin inventory shrinkage, either by theft or mistake. Maybe there is a tax advantage to taking cash "under the table," but even that's becoming harder to do.

Don't kid yourself. Banks charge for rolls of coins, they charge to deliver and they charge to pick-up.

Much of the costs of obtaining and managing cash are "soft" or allocated costs. Whereas credit card fees are hard costs. I'll bet most cash-heavy companies find their cost of cash per transaction isn't that much different than their credit card costs. That's why more than a few merchants are no cash merchants.

[tower912]

New Zealand?  I thought they were on the Gold standard.

Wait, wait, this is better.

New Zealand abandoned the (Kirk) Penney ages ago.  Now they are on the Gold standard.

[Billy Hoyle]

You must live in a cave 

I agree...it *shouldn't* be.

I know EVERYTHING is a partisan issue these days. Saying "it shouldn't be a partisan issue" would have been more appropriate.

[MU Fan in Connecticut]

There is something to be said about this because of processing fees and whatnot on card purchases.

Ask yourself, who will profit from the elimination of hard currency? 

I'm sure the credit card companies will always round down.

[muwarrior69]

If a merchant accepts cash, he or she has to order it from the bank, have it delivered by armored car, account it, manage it, protect it and deposit what you don't need. And, one inevitably has cash and coin inventory shrinkage, either by theft or mistake. Maybe there is a tax advantage to taking cash "under the table," but even that's becoming harder to do.

Don't kid yourself. Banks charge for rolls of coins, they charge to deliver and they charge to pick-up.

Much of the costs of obtaining and managing cash are "soft" or allocated costs. Whereas credit card fees are hard costs. I'll bet most cash-heavy companies find their cost of cash per transaction isn't that much different than their credit card costs. That's why more than a few merchants are no cash merchants.

They can refuse legal tender?

[The Sultan]

They can refuse legal tender?

Yes.

[Jockey]

Today's pennies will have no extra value in 100 years. Except sentimental.

I should have made clear that they will have no collector value. They will also have zero value for their copper since their is no copper IN the penny - just a thin copper coating.

[muwarrior69]

Yes.

Maybe where you live, but not here in New Jersey.

[rocky_warrior]

Some states have laws that require cash be accepted.  CO has one of those.  However, it's hard to enforce (I feel like many food trucks avoid cash), and it's not illegal to say "We don't carry change" if you insist on paying in cash.

Edit: Oddly, Banks and Credit unions aren't required to accept cash for their services. lol

[NCMUFan]

Absolutely.  Probably nickels also.
Dimes are the new pennies.
Dollars are the new dimes.

[MU82]

You must live in a cave 

I agree...it *shouldn't* be.

As you know, I'm not the biggest fan of a certain political figure, but I am absolutely fine with eliminating the penny.

[WellsstreetWanderer]

It costs more than a penny to make a penny and more than a nickel to make a nickel.  100+ years ago, a penny had more buying power than a quarter does now, and we got along fine.  Get rid of pennies and nickels and round to the nearest dime.  When I was in the Netherlands 20 years ago they were already doing that with their currency.

I'm in the Netherlands often and it is still the case

[Hards Alumni]

One place this would have a big (and weird) change, is internet ad sales.  We get pennies (or fractions thereof) for every few ads viewed.  We get more when people click on the ads, but still usually a few cents. 

Would every ad then be rounded up? That would increase costs of advertising a lot.  Just round up the overall ad campaign cost, and round up or down the payments to those that show ads?  Still doesn't seem right to be counting in pennies (or fractions of nickles) if it's something that doesn't exist.

I'd think they could track it, and when they send you the check just round it to the nearest nickel or dime or whatever

[rocky_warrior]

I'd think they could track it, and when they send you the check just round it to the nearest nickel or dime or whatever

When I posted that, I wasn't really sure how it would work.  Sounds like digital (and likely check) payments would still use exact change - so no difference.  Of course, if you were to cash a check - the bank would round up or down?  Probably always down, hah.

[#UnleashSean]

Realistically, the penny, and nickle could probably be eliminated.  However, I don't think there's really any cost savings in the end, with the additional cost for businesses to implement price changes, and rounding - especially with state and local taxes involved.

If folks can avoid their partisan takes, it's an interesting discussion, that I'll be watching carefully.

Ohhhhh... what scoopai could have been

[CTWarrior]

A dumb question.  Since pennies cost so much, why do we take old ones out of circulation and make new ones?  Just let the old ones stay in circulation.

[Billy Hoyle]

I'd think they could track it, and when they send you the check just round it to the nearest nickel or dime or whatever

they'll just round off the fraction of the cents and put it into a bank account. It will be too small to notice. What could possibly go wrong?

[tower912]

they'll just round off the fraction of the cents and put it into a bank account. It will be too small to notice. What could possibly go wrong?

Nice.

[Hards Alumni]

they'll just round off the fraction of the cents and put it into a bank account. It will be too small to notice. What could possibly go wrong?