Save the penny--or scrap it?

Our recent item about a proposal to ban the $100 bill prompted a number of comments on that topic, some that suggested the U.S. also get rid of the penny (and perhaps other coins) while it’s at it.

As it happens, the fate of the penny is also the subject of an interesting New Yorker article this week by David Owen.

This is not a new debate, of course, but one that’s been going on for years. An argument against doing away with the penny (and perhaps other coins) is that it would be inflationary to round prices up to the nearest nickel or dime.

Is the hassle of dealing with pennies simply not worth it, inflation or no?

What do you think? Please let us know by clicking on Comments below and sharing your, uh, two cents worth.

Comments

[Jerry Altshuler]

The penny has been a target of mine for years. Get rid of it. Rounding purchases up or down should not hurt anyone. It will make it easier for vendors to make change. How much will it save the U.S. by not having to mint the penny any more?

[Robert Nigara]

i agree, the penny should be gone!!!!!

[Marvin Hamon]

Pennies are a pain to deal with and should go the way of penny candy. I say get rid of them.

[Dave Johansen]

Get rid of the stupid penny. It's been years since I even thought about keeping one.

[patty]

The penny is outdated. It just gets collected in a jar or a drawer or in the bottom of a pocketbook. It would be easier to round up or down.

[Larry]

Keep the penny! I'm sure any rounding will be UP not down, adding as much as four cents to the price of everything.

I'd rather see the end of the dollar bill, along with a practical dollar coin and wider use of the $2 bill, as has been the case in Canada for many years.

[Tim Edwards]

I could see the argument for saving the penny. Especially if you’re a retailer. Example: A retailer selling an item for $39.99. At 500,000 units sold the gross sales amount would be $20,000 LESS if those same units sold at $39.95. (4¢ x 500,000)

While $20k may not seem like a lot, it certainly presents arguments for the potential impact on our fragile economy as well as economies in other countries who do business with the U.S.

[jevahn]

I do agree that the rounding will likely go up than down. But I found that printing the penny costs more than it's worth. Then there's the scrounging for pennies when we are being rushed at the registers to keep the line moving... I say ditch the pennies! But how about sales tax? Wouldn't that cause a problem since it's determined by a 'percent' of what you spend?

[Peter R]

Keep the penny. Keep the $100 bills too. I pick up every penny I see and I'm in better shape because of it (I walk!). $100 bills are really good to give as a gift and to "unthicken" your wallet when traveling and carrying some cash. You can count most recipients to be more discriminating about their purchase before they "break" that $100 bill. The copper penny gets saved in bottles and takes money out of circulation for a time. When we lose the value of a single coin in our hearts and minds, we have accepted that there is no value to savings at all. This is not the example we should present to our children.

Instead of eliminating the penny, major retailers (WALMART!) could offer double for every penny used to purchase up to the legal limit of 25 cents. More than a million small children would be so happy and the value of saving would be rewarded.

Then their cashiers would not have to break open so many penny rolls to make change.

The principal opposition to the elimination of a penny comes from State Sales Taxes which utilize the "penny break" to increase the tax by another penny. No break, no additional tax collected! It could add up to millions of dollars that slips under the oversight of auditors, GAO, etc.

[briang]

Get rid of it. Use "Dutch rounding."

This is what New Zealand uses. All pricing on items is done to the penny, but then the total is rounded this way:
total ends in 8,9,0,1,2 becomes 0
total ends in 3,4,5,6,7 becomes 5

[DanI]

The New Zealand method of pricing and calculating tax to the penny, then rounding should work and have minimal impact on anyone. Very worth considering, since minting a penny costs more than it is worth, and would simplify coin handling. (Penny slot machines could use existing massive supplies of pennies far into the future.) If the $100 goes, then get rid of the $50 too, if you really think it would deter illegal cash transactions. I do not believe such a move advisable; there are many of us with legal and advantageous uses of large bills. Remember, we already eliminated the $500 and larger bills years ago.

[Jim]

To minimize round-off concerns, how about replacing the penny with a 2.5-cent coin, a half-nickel? It's weird because things would be priced ending in either 0 cents, 5 cents, or 2.5 cents - but it's not weird in that 4 quarters make a dollar, as do 10 dimes, 20 nickels, or 40 half-nickels (but there'd be no 100 pennies). Current prices that don't end in a 0 or 5 would have to be reset to 0, 5, or 2.5. Maybe $1.01 becomes $1.00, $1.02 becomes $1.025, $1.03 becomes $1.025, and $1.04 becomes $1.05. etc. The new coin just has to cost less than 2.5 cents to mint, easier than trying to keep each penny costing less than a penny to mint.

[KenM]

Prices on the shelves could still be in pennies (and for gas in pennies and tenths), but the rounding up (or down) could be applied only on a total purchase. So if all purchases in one day are rounded up, that is a miximum of 4 cents for every purchase, not every item. How many purchases are made in a typical day by the average person. And that is the worst case. Buy a mix of itemes with prices ending in 1, 2, 3, 4, 6, 7, 8, 9, and in some cases the round up might be only 1 cent for a combined tab at the checkout counter.

[KenM]

I gave this a lot of thought a while back, and no matter what coinage you use, there is rounding if you get rid of the penny and still think in pennies. We dont' think in half-pennies anymore, and don't get bent by half cent rounding. We buy gas and the pump rounds to the nearest cent, and no one gets bent. Let's go for the fewest coins in our pocket with optimal rounding avoidance. Let's have only 3-cent pieces, dimes, and 30-cent pieces. Do the math and figure out how little rounding takes place all the way up to the dollar and how few coins need to be in your pocket.

[ron woodsum]

Before we get rid of the penny let's get rid of the ridiculous 9/10th of a cent at the end of every gallon of gas. As the price of gasoline approaches $5, surely the time has come to end this joke.