Canada To Stop Making Pennies 473
New submitter butilikethecookie writes with news that the 2012 federal budget for Canada calls for the Royal Canadian Mint to stop producing pennies. "The budget calls the lowly penny a 'burden to the economy.' 'It costs the government 1.6 cents to produce each new penny,' the budget says, adding the government will save about $11 million a year with its elimination (PDF). Some Canadians, it says, consider the penny more of a nuisance than a useful coin. ... Rounding prices will become the norm as the penny is gradually removed from circulation, the budget says. If consumers find themselves without pennies, cash transactions should be rounded to the nearest five-cent increment 'in a fair and transparent manner,' it says. Noncash payments such as checks and credit cards will continue to be settled by the cent, however."
I'll own up to it...I throw them away (Score:3, Interesting)
Pennies are so annoying here in the U.S. now that I refuse them when they're offered as change (or toss them into the penny jar or charity jar on the counter when they have one).
Sometimes I forget though, and I usually just throw them in the trash. I just hope my Grandma never finds out. She would have a heart attack on that one. I could never get it through to her that they would cost me more in time to deal with than the pennies themselves are even worth.
Re:I'll own up to it...I throw them away (Score:5, Funny)
Value of one hundred pennies - $1.00
Value of one sock - $1.98
The look on the guy's face when you hit him in the head with a sock full of pennies - priceless
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He should've had a reverse peephole...
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Re:I'll own up to it...I throw them away (Score:5, Funny)
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That happened to me in NYC. I bought something and made my payment, which included a Canadian penny, and the woman behind the counter had this expression on her face like I'd just dropped a dead rat on the counter. She asked me for a US penny, with a voice full of contempt.
Wow. I almost cost you $0.0001. Sorry 'bout that.
Re:I'll own up to it...I throw them away (Score:4, Interesting)
1 ten thousandth of a dollar? You do know the pennies are 1 one hundredth of a dollar, don't you?
The difference between American and Canadian pennies is 1/100 of a cent - or 1/10000 or a dollar wich is 0.0001.
Of course the real cost to an American retailer is the need to sort and exchange the Canadian coins. Sounds like a real pain in the ass so I can see why they would be annoyed. It's not that you're stealing from them, you're just making their job harder.
Re:I'll own up to it...I throw them away (Score:5, Insightful)
Some enterprising guy figured this out about the Canadian dime in the 1960's - the silver was worth more than $0.10 so he would take armored cars full of dimes to New York and sell them for the silver - iirc he made quite a nice little profit for it too!
Re:I'll own up to it...I throw them away (Score:5, Informative)
Are they still copper in the US?
No, they are Zinc. But even the Zinc is worth more than the face value of a penny.
Re:I'll own up to it...I throw them away (Score:5, Informative)
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Maybe in Canada, not in the US. If you ARE referring to the US, you are thinking about it's illegal to DEFACE currency, meaning revalue it.
Re:I'll own up to it...I throw them away (Score:5, Informative)
You linked an article in a newspaper. I'm referencing the actual law. btw, did you bother to READ the rest of the comments on the /. post you referenced? They pretty much nullified the post.
The last line is most relevant. DOUBLE WRONG!
Section 331 of Title 18 of the United States code provides criminal penalties for anyone who fraudulently alters, defaces, mutilates impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the Mints of the United States. This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it to be other than the altered coin that it is. As a matter of policy, the Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent.
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The original claim was that it was illegal to melt down pennies for their metals. That is true. You claimed it wasn't. The whole defacement tangent is irrelevant to that point. I'm not disputing your definition of defacement.
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Re:I'll own up to it...I throw them away (Score:5, Informative)
I stand corrected. The link does not carry rule of law . . . . . but a bit more searching provided the actual regulation.
http://www.usmint.gov/downloads/consumer/FederalRegisterNotice.pdf [usmint.gov]
Interesting that it doesn't state that it replaces the prior law, I guess we get to choose which law we follow?
Re:I'll own up to it...I throw them away (Score:5, Interesting)
Fun trick:
1. Place a US penny on some pavement (gotta be a somewhat new one, mind you--don't try this with a steel wheat penny or something, obviously)
2. Heat it with a butane lighter--the kind with the little blue flame that shoots straight out, 'cuz you gotta be able to point it down.
2a. Maybe wear a glove on the lighter-holding hand; optional, and I've never seen it matter, but I've only seen it done a couple times so...
3. Watch as the lower-melting-point zinc busts through the still-solid copper in liquid form!
Hasn't been explosive when I've seen it--it just tears the copper and flows out a bit--but if there's an air bubble or something, who knows; be careful!
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One of my favorites is to nick one side slightly and toss it in some hydrochloric acid (or muriatic acid off the shelf at the hardware/janitorial supply store). The copper stays intact, but the acid will eat away the zinc. What you have once you rinse it off is a paper-thin penny shell.
Re:I'll own up to it...I throw them away (Score:4, Insightful)
The Senators from the states that mine zinc are the only thing preventing the US from getting rid of the penny.
Re:I'll own up to it...I throw them away (Score:5, Informative)
According to the Canadian Mint, the final run of pennies are primarily a steel-based alloy:
Composition: 94% steel, 1.5% nickel, 4.5% copper plating or copper plated zinc
Weight (g): 2.35
They're mostly Zinc (Score:5, Informative)
Wikipedia to the rescue. They're 97.5% zinc, 2.5% copper [wikipedia.org], and have been that way since 1983.
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US pennies made before 1982 are mostly copper with a current melt down (illegal) value of $0.02 each. Post 1982, the content is 95+% zinc.
http://en.wikipedia.org/wiki/Penny_(United_States_coin) [wikipedia.org]
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I believe Canadian $0.01 are an alloy cheaper than copper.
Current Canadian pennies are copper-plated steel. Until 1997 they were solid copper (like pre-1982 US pennies) and from 1997-2000 they were copper-plated zinc, like the current US pennies.
All currently minted coins are plated steel. Nickels, dimes, quarters, and toonies are nickel-plated (Toonies have a brass-plated aluminum bronze center), and loonies are brass-plated.
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That's silly. I toss my pennies in my car's cupholder, and when I come to a McDonald's drivein, I gather together the 6, 12, or 18 pennies to cover the tax appended to the food price. (Actually I do that with all my change; it all gets dumped in my car for future use at a drivein or tollbooth.)
Re:I'll own up to it...I throw them away (Score:4, Funny)
I bet the drive-in cashiers love you...
Re:I'll own up to it...I throw them away (Score:5, Informative)
People who pay with exact change make window tellers VERY grateful. Dollar bills and pennies always ran low.
I got to the point I would also make piles of change ready for future cars, assuming they would pay entirely in bills. Such a time saver...
The catch is, if you do NOT have your exact change ready, don't dig for it. Just don't. I can break that $20 faster than you can dig out that quarter.
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The vast majority of americans do not want the penny. Metal lobbies keep them in circulation (polsci 101).
Consider the man hours wasted among all citizens, across the span of a year, dealing with pennies at the register, at the bank, and in your pockets (aka waste).
HERE HERE!
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We dumped the 1c and 2c coin about 20 years ago in Australia. Its hard to imagine having that crap in my pocket anymore. I cant be bothered carrying 5c coins as it is! Its just a waste of weight, You try buying something normal with 5c coins!
Its hard even paying with 10c coins. 20c is about the limit.
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Just like in Switzerland (Score:4, Interesting)
Here in Switzerland this is already implemented. The smallest unit is 5 Rappen (5 cents)
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If you round up the change, then obviously you don't round up the price - it's an alternative that no one would ever use hence the smily.
The price comes to $13.32 you pay with a $20 note. Since the 5c is the smallest coin the and the seller owes you $6.68 in change they round up and pay you $6.70.
Is that really that hard to grasp? It's essentially the inverse of the rounding up the price - the price is $13.32 since 5c is the smallest coin you get charged $13.35 and so get $6.65 change from your $20.
The far
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Re:Just like in Switzerland (Score:5, Funny)
> Here in Switzerland this is already implemented.
I'm not surprised -- most countries already don't produce Canadian pennies.
Re:Just like in Norway too (Score:5, Interesting)
Here in Norway we been doing this for years:
- The 1 øre and 2 øre coins disappeared in '74
- The 5 øre and 25 øre coins were withdrawn in '84
- The 10 øre coin ended being legal tender in '92
- The 50 øre coin will be withdrawn may 1st this year.
So in a little over a month there will be no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices has not changed with the smaller coins going away. If you pay by card, you pay the exact amount. If you pay cash, it is rounded up or down to the nearest coin-value.
For those curious; after the retirement of the 50 øre coin, a purchase of 9.49 kroner will be rounded down to 9.00 while a purchase of 9.50 kroner will be rounded up to 10.00 - unless you pay by card, in which case you pay the exact sum owed.
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So in a little over a month there will be no coins circulating that is worth less than 1 Norwegian krone... but you know what? The wast majority of Norwegians pay by card anyhow, and the prices has not changed with the smaller coins going away. If you pay by card, you pay the exact amount. If you pay cash, it is rounded up or down to the nearest coin-value.
That's the problem, and my biggest problem with this boneheaded move...
1. Not everybody has access to a card.
2. Unless you keep a certain minimum balance in the bank, or pay a monthly fee, you get hit with a service charge every time you use your card in Canada
3. The merchant gets hit with a service charge every time anyway.
4. (and my main personal concern with it) it's harder to budget when you're paying with plastic, because the money is not tangible.
I have quite happily been using folding money for small
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No one is forcing you to get a card. All they would do is get rid of denominations that inflation has caused to cost more to produce than they are worth. The price of a coffee is already too high and it is caused by forcing staff to count out small change when they could be doing something productive, and you are paying for it. This move will actually REDUCE the real price of a cup of coffee.
If you are worried about "rounding to the nearest "0.05", then logically you should be worried about rounding to the
More economic quackery (Score:4, Insightful)
All they would do is get rid of denominations that inflation has caused to cost more to produce than they are worth.
In other words, curing the symptoms, not the actual problem. (Which is inflation.) And in the process, introducing all kinds of second order effects which will inconvenience many.
What else do we expect from the government?
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[...]there's no way "rounding to the nearest $0.05" will work out in my favour.
Why qouldn't there? In Norway it works fine, same in Denmark (almost same system). Merchants are required by law to round the way GP describes.
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at that level of rounding people WILL start gaming the system, hell i know i would. coffee costs $1.51 - i'm going to pay with a card. coffee costs 1.49 - i'm going to pay in cash.
So you're going to pay $0.01 more for each coffee?
$1.51 with card = $1.51, with cash = $1.50
$1.49 with cash = $1.50, with card = $1.49
My two cents on this.. (Score:4, Funny)
is going to be rounded up to a nickel.
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Actually, I think you'll find it was rounded down to $.00. ;)
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Re:My two cents on this.. (Score:5, Funny)
And So Begins (Score:5, Funny)
Now, if you'll excuse me, I'm off to my secret bunker, as I believe I hear the Hyperbole Police coming up the stairs. *dons tinfoil hat* Excelsior!!!
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Phase II started over 150 years ago, then, when the half-cent was kicked to the curb.
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When you as most people pay by debit card the price is still charged to the cent.
That's OK (Score:5, Funny)
Re:That's OK (Score:5, Funny)
And American retailers will continue to accept your funny-looking pennies with some lady on them. I had one cashier remark how they're always changing the coins, and how it must be Lincoln's wife.
Love It - even though I'm cynical about the intent (Score:2, Insightful)
The new federal budget included a lot of nasties. As much as I'm glad to see the penny go away, I can't help but think it's a ploy by the conservatives to deflect attention away from all the nasties they included in the budget.
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Re:Love It - even though I'm cynical about the int (Score:4, Funny)
It'll save $11 million a year? (Score:2, Insightful)
That seems like a lot of inconvenience to go through for such a tiny return.
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especially since each coin stays in circulation for up to 30 years [latimes.com] (last paragraph of the article).
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Oh please. When was the last 1980s penny you've seen? That's referring to dollar coins specifically.
(As if to mock me, the two coins in my wallet are a 1983 quarter and a 1985 dime. No pennies though!)
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I wish I could handle all my money with the swipe of a card too, but that would mean sacrificing all anonymity of transactions (you think any government is going to allow yet another form of payment that can be laundered?), so I'll gladly continue to handle annoying, stinky physical money.
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Well the inconvenience is decidedly temporary, whereas the savings are eternal.
It begins.... (Score:2)
Is there anything wrong with that? (Score:2)
I think it's time our governments admitted that inflation over the past 20 years has made the penny worthless. We've long since abandoned the half penny, and good riddance. In 100 years it may be time to have $5 be the smallest unit. 3rd world countries deal with this on a regular basis, I think its just 1st world pride that's keeping us from following their example when it's obviously far past time.
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Because it was never "worthless"! (Score:3)
The point is, the penny wasn't worth the expense of minting it, and the hassle of carrying the extra coins around. Nobody said the penny was utterly worthless though. The cash transactions being rounded will surely wind up rounded UP to the next closest 5 cent mark, not DOWN, in almost all cases -- because merchants don't want to lose that 1-4 cents per transaction that adds up over a month's time.
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It will just get rounded up or down. If the total is 1.12, then it should go to 1.10. If the total is 1.13, then it should go to 1.15. It's even more straightforward than rounding to the nearest dime, since you don't have to deal with evens and odds.
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It also means that places can short customers by more.
Instead of, at most, being able to short a customer by as much as only half of a cent on a purchase, they can now short a customer by as much as 2.5 cents.
The effect on any individual is minor, but if the company uses a pricing structure such that their prices would always get rounded up, they stand to be able to increase profits as much as 5 times faster than they used to.
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Blame the Fed and other central banks for constantly increasing the money supply. The lowly penny has lost 97% of its value since 1920 (hence why it's now worth less than the cost of making it). Your grandparents' SAVINGS have lost 97% of their value since 1920.
And continue to lose value by about 3% per year. It's a hidden tax on your accumulated cash wealth. Time to End the fed and/or affix the dollar value to a fixed standard (like precious metal or land) that the Fed cannot alter. Cannot devalue.
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As far as i
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I should have been more clear. The money from nothing is not a premise. It's a fact of fractional reserve banking which pretty much every country practices. Let's take a 10% reserve requirement - that means a bank with $1 in acceptable assets (varies some by jurisdiction) can "lend" $9. How is that not creating $8 out of nothing? Assuming they do "lend" that $9, that means for $1 in real money (federal reserve notes (cash) or deposits at the federal reserve in this case), there is an additional $8 in circul
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Shrug. We've already ditched $1 and $2 bills in favour of coins, and ditched 25 cent [cdnpapermoney.com] bills entirely. We've survived.
...laura
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First the penny. Then the nickel. Then the dime. Then the quarter. Then the loonie. Then the twonie. Everything will eventually be in $5 increments.
Calm down. It's taken 100 years for anyone to even propose the elimination of the most pointless of those coins. We won't have to legislate the removal of the others. At this rate of legislation, we'll run out of metal to make them first.
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Re:It begins.... (Score:4, Informative)
Actually, no it does not. The dime is currently the lowest denomination that, so far, costs less than its face value to produce. It costs roughly 7 cents to make a nickel (and only 4 cents to make a dime). For what it's worth, right now, quarters cost ten cents to produce, loonies about 15 cents, and twonies about 30 cents.
But coins are insanely expensive compared to bills. Printed paper bills cost about 10 cents each. The newer plastic bills that Canada has started to use cost about 19 cents to manufacture, but last more almost 3 times as long (the plastic can also be reused to print other bills later, so the cost on the polymer bills will probably drop over time, although it probably will not ever be as cheap as the paper ones are).
DST (Score:5, Insightful)
Re:DST (Score:5, Funny)
If you believe daylight savings time is the only thing keeping the US from looking silly, you're sadly mistaken.
Re:DST (Score:5, Informative)
I think he was implying that daylight saving time was one of the reasons Canada looks silly (just like the US) and eliminating daylight saving time would make them look less silly.
No, all I need to make the US look silly are bunches of 3-letter acronyms: DHS and TSA to name two.
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I think he was implying that daylight saving time was one of the reasons Canada looks silly (just like the US) and eliminating daylight saving time would make them look less silly.
No, all I need to make the US look silly are bunches of 3-letter acronyms: DHS and TSA to name two.
As a non-American, you forgot the biggest fools having a 3 letter acronym: GOP.
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> come on fed, the Canadians
That is the Department of the Mint's problem, not the Fed. DST is someone else's problem entirely, at least partially each state's (ask Arizona or Hawaii, or once upon a time, Indiana about that).
Re:DST (Score:4, Insightful)
I believe the folks in Washington DC are already working very hard at this.
About time! (Score:2)
This should have been done 10 years ago. I don't hoard my change, I always keep it in my wallet and spend it as I go, often clearing it out completely every 2 months or so. This is probably the only thing Harper's done right since he got into office.
Good idea, take it further (Score:4, Insightful)
When I was deployed to Iraq in '05 the smallest unit of change the PX would give was $0.25, and we all got by with that just fine. When the smallest coin a bubble gum machine will accept is a quarter there's no need for even my children to want any denomination smaller than that. The cost of manufacturing pennies, nickels, and dimes isn't worth the benefit. Add the cost banks and vendors incur in transporting these too-heavy-for-their-worth slabs of metal to the cost of their original manufacture and it's clearly a drain on the economy.
How American. (Score:2)
Us Canuckistanians tend to use debit for anything more than a few bucks. Timmies already makes sure their prices come out to a nice even number.
Good on them (Score:2)
I wonder how Canadian retailers will price things now though. Instead of pricing something at $4.99, (to psychologically make you think it's $4 not $5) will they drop the price to $4.95 and lose 4 cents on every purchase, or just mark it up to an even $5.00? And yeah, even though that little trick doesn't work on most of us, it works on enough people that they keep doing it. Or at least US retailer
This is good economics! (Score:2)
1. Remove the penny, save $11m.
2. All prices now a multiple of 0.02, so divide by two
3. Reintroduce penny - lose $11m but all prices are now half what they were!
Oh? (Score:2)
Rounding prices will become the norm
I can hear Billy Mays raging from his grave.
Purely a good thing (Score:3)
The penny should have gone some time ago, it's good that it's finally going away.
This will make exactly 1 difference, half of the stores will go from $3.98 to $3.95 and half will round to $4.
I'm fine with either, and since it will be about half and half it'll work out in the wash.
if they tried this in the USA (Score:3)
can you imagine all the looney tunes shouting about Bilderberg this, world domination that, UN plot this, communist muslims that...
all countries have nut jobs, but what is it about my country that the nut jobs are so loud?
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On the contrary, one of the reasons this reform never gets off the ground in the US is that it is not a strong partisan issue, even for the fringe element. It's hard to get your constituents--on either side--fired up over something so mundane, so it doesn't give you any advantage over the Other Party.
every time you do anything to the currency (Score:3)
the paranoid schizophrenic fringe perks up
Here in Holland (Score:4, Informative)
Here in Holland we don't use Eurocents anymore. Before the Euro, when we used Dutch Guilders (0,45 Euro) we already stopped using cents. The smallest coin then was 5 cents.
When we got the Euro in 2001 we shortly used the Eurocent. But soon it was discarded. Every shop now rounds to 5 Eurocent. Only when you use your debitcard you pay in cents.
At first there were some people complaining about losing cents in the rounding, but now most people can accept it. Of course rounding goes both ways anyway.
I already think 5 Eurocents is too much hassle to bother with. But I guess that one will last for some years to come.
Way overdue. (Score:3)
Both Canada and the US should have gotten rid of not only the penny but also the nickel by now, rounding transactions to the nearest ten cents. The waste of good metal in making pennies which are worth less isn't even half the story; much more importantly, though the whole purpose of currency is to make transactions easier, pennies and nickels simply complicate transactions and waste everybody's time.
See also this well-done youtube video [youtube.com].
The mobsters are licking their lips at this.... (Score:4, Insightful)
Doesn't sound like much, but when you're in a business that handles hundreds of thousands of transactions a day, that kind of difference can add up fast. 500K transactions = ~$12,500 a day, ~$4.5m a year. Some companies will gain that much, and other companies are going to lose it...
If they want to eliminate the penny, they should do it for all transactions, at the same time.
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If pricing is random, as many transactions will round up as round down, meaning the net result is no change. If merchants are careful with their pricing, they might be able to get more transactions to round up, or they can just increase all their prices by $0.025.
I say drop nickels too! (Score:3)
As a Canadian, I would have been happy with eliminating the nickel too. That way, they stick with a nice round decimal system, and drop one zero from all commonly used monetary calculations. 10 dimes makes a dollar, so a dollar and thirty dimes would be written $1.3. Newly printed dimes wouldn't say "10 cents" on them, they would say "1 dime". That way the dime becomes the new penny as the smallest denomination of coin. This would eliminate all confusing rounding rule. It also makes sense because dimes are the physically smallest coin anyways.
Dime for your thoughts?
And what prevents the following from happening? (Score:3)
And let's say that I discover an item (or possibly a group of items) in a store such that after tax, the total price in pennies ends with the number 8.
And let's say that I intend to buy something from a store such that its price in pennies, after tax, would end with the number 4, 3, or 2.
If I combine these purchases into one, and then pay in cash, then the resulting price will be rounded to the nearest nickel, which means they would round down.
If I then later exploit the store return policy to return the first items on the list for a refund, since I paid in cash, I should receive cash back, which again, should be rounded to the nearest nickel... but this time, they would have to round it up, and I would get an extra 2 cents back.
Lather, rinse, repeat.
Inevitable (Score:3)
I'm old enough to remember half pennies and pound notes in the UK. The pound coin was met with bemusement when it came out but I came to like them very quickly. I was passing through Vancouver airport one time and the airline guy who was checking my boarding pass noticed the coins I'd taken out, he was fascinated by the British pound coin because I set a few of them on the counter (while digging something out of my pocket) and a few of them stood up on their edge. He asked me all sorts of questions about these coins, like what it was worth and what it could buy. He was a sweet old fella too, I let him keep one.
Two sides of the coin to me (Score:3)
Bit of relevant trivia: There is a US precedent for eliminating a coin for being too small in currency. The US Half Cent [wikipedia.org] was around until just before the Civil War. We ended that program without any major currency problem popping up.
Just like we tossed the half cent and rounded up or down, it's probably time to do the same with the penny. In a decade or two (or sooner, depending on the coming wave of inflation), the nickel should probably follow suit. I'll miss what you WERE, Mr. Penny, but I won't miss what you are today.
A question for the remaining defenders of the penny: Do you have a pile of pennies in your car or at home that you haven't touched or forgotten about for more than a month? If so, your own economic sensibilities should see the problem and want to eliminate it.
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The government aren't complete idiots (nearly, but not complete). There are regulations surrounding how this is all going to work. It isn't being left up to the retailer to decide.
Basically, all prices will still be in cents. So something that costs $9.99 will still cost $9.99 after the penny is gone.
When you go to pay your bill, if you pay cash, then the after tax price (remember there's sales tax in Canada) is rounded following government mandated rules.
And the rules are as you'd expect. x.y1 and x.y2 rou
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