Cost of making pennies close to one cent so let's finally be rid of them

I read today in my local newspaper that due to the rising price of zinc the cost of making the one cent coin will probably be close to its face value when the figures are released for 2005. It may well exceed once cent in 2006 since the price of zinc is skyrocketing. This will finally give the government a good reason to do what I've felt they should have done years ago-get rid of pennies once and for all. Let's face it-they're a nuisance. Since they're worth so little often you'll just take your pennies from the day and throw them in a jar rather than carrying them around the next day so you have exact change. As a result most people have jars of pennies sitting around the house. I know people who have a few 55 gallon drums worth.

Getting rid of pennies will give us a reason to end two practices I find obnoxious. First, it will end the stupid practice of pricing one cent below the next 10-cent increment. Second, since adding tax to taxable items can still result in prices not rounded to the nearest nickel we can require stores to have the tax built into the shelf price, and rounded up or down to the nearest 5-cent increment. This makes it way easier for the shopper since the total they figure using the shelf prices will be exactly what they pay at the register. I really, really hope the penny dies a quick death soon. As a bonus, cash registers will have an extra tray so we can finally start using those dollar coins instead of dollar bills.

"Only for 12 payments of 9.99!"
I hate it when they say 9.99
People around me:WOW NINE DOLLARS
Me:NO ITS 10. 10 10 10 10!! GET IT THROUGH YOUR MIND *Yell*
People:*Whisper voice* Idiot.

So ... will everything be priced to the nearest 5 cents, just cash transactions, etc?

certainly seems like a good idea, but at the risk of jumping on the bandwagon without a clue, are there any potential negative aspects to getting rid of the penny? is there a reason they haven't done it before now?

Australia got rid of One and Two cent pieces a few years ago.

We still have things that end in .99c

geoff

Leave the jars of pennies till Zinc skyrockets through the roof; then sell 'em when prices rise. Instead of speculating on gold or silver, you might actually make it rich on zinc! :laughing:

You could always use 'em for makeshift heatsinks if ya can't find round stock

They should really make the quarter the lowest valued coin, anything less is just a nuisance. I would like to see the following coin lineup: quarter, half-dollar, dollar, 2-dollar, 5-dollar.

Goods can still be marked $9.99, it is only when you pay with cash the total will need to be rounded to the nearest quarter.

I remember a distint importantance of the xx.99 price category in a buissiness class that I slept through.. something about being able to be in a lower price group, even though its not really.

So, if we got rid of the penny, we would have to pay the store .01 more on every transaction.. it could add up after a while,

I don't have lots of change laying around, I bring it to Commerce Bank, they have the free penny arcade.. Think coinstar, but free.. They give you paper money and you get a chance to win a free t shirt if you can guess how much you have.

I remember a few years ago, lots of burger kings in NYC where giving out free whoppers if you brought in 100 pennies.

coldsolderjoint said:

So, if we got rid of the penny, we would have to pay the store .01 more on every transaction.. it could add up after a while,

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No, let me give you an example why it's not like that.
If we assume the nickle is the smallest coin and you buy 3 things at $9.99, then it will be rounded down to $29.95. So you actually pay .02 less. However, if you only bought 2 things, then it would be rounded up to $20 and you would pay .02 more.

Seems like an accounting nightmare..

How about those buissiness transactions like those on "office space" that revolutionizes that system.

We can't have two systems.. one cash and one electronic

Isn't it cheaper just to print credit cards?

Me personally, I don't really see a need for a 50-cent piece. I never use them and find them to be a pain in the butt most of the time. I would rather have a couple of quarters.

LEDcandle said:

Leave the jars of pennies till Zinc skyrockets through the roof; then sell 'em when prices rise. Instead of speculating on gold or silver, you might actually make it rich on zinc! :laughing:

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That's what happened in the 80s when the price of copper skyrocketed...that's why they switched to zinc. As annoying as pennies are, I don't see how we could possibly get rid of them, because .99c prices will NEVER go away. How would they give change?

Unless you live in Oregon, sales tax will eat up that extra penny you thought you were going to receive as "change."

They'd just round the total cost of a transaction to the nearest nickel rather than penny... d'oh. It's like the fractions of cents left over after sales tax is computer, just invisibly rounded.

BatteryCharger said:

As annoying as pennies are, I don't see how we could possibly get rid of them, because .99c prices will NEVER go away. How would they give change?

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It could be done by government mandate. Heck, if all of the EU countries could completely change their currency, we can rid ourselves of pennies.

Another reason besides the cost of manufacture is the inflation. The value of a penny has been steadily dropping. A penny in 1940 had the value that a dime does now, and in 1960 a penny had the value a nickel does now, roughly speaking based on the consumer price index. There is no more need for pennies now than there was a need for 1/10th cent pieces in 1940.

Not that this has anything to do with the penny, but why do gas prices always have to end with 9/10 of a cent. Why don't they just make it a whole valve.

Morelite said:

Not that this has anything to do with the penny, but why do gas prices always have to end with 9/10 of a cent. Why don't they just make it a whole valve.

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Gas prices do not 'have' to end with 9/10 of a cent. That is the choice of the seller. They do it for the same reason that stores put stuff on sale for $9.99 instead of $10.00. They think it gives them some kind of stupid psychological advantage because they think it 'sounds' a lot less than going with the next whole amount even though the difference is meaningless.

idleprocess said:

Unless you live in Oregon, sales tax will eat up that extra penny you thought you were going to receive as "change."

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I do live in Oregon.

drizzle said:

It could be done by government mandate.

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Foruneately, we live in a capitalist economy, and the government cannot mandate prices. Every business that charges 99c would have a highly paid lawyer suing the pants off the US government. 99c is a huge marketing thing - yes, most americans ARE stupid enough to think it's actually cheaper than a dollar, and businesses here will never give it up.

Morelite said:

Not that this has anything to do with the penny, but why do gas prices always have to end with 9/10 of a cent. Why don't they just make it a whole valve.

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At one point in time, the fractional-cent pricing used to be set up so that a station owner could squeeze an additional penny or two out of the average fill-up. In other words, the final digit was not always 9. This was decades ago.

Now it's just a gimmick so people will think that $1.999/gallon is signifigantly less than $2. You come out one cent ahead for every 10 gallons of gas you buy. Yippee.

Fractional cents are used commonly for cheap commodities bought in massive quantities. Save 5 "millidollars" on 1 million of something and that's $5000. The quantities of gasoline sold at the retail level don't justify fractional-cent pricing on a cost-to-the-consumer level, but there's always that dumb pricing psychology that keeps working.