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:
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.
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.
If the law is slow to change or there are no available pennies, the stores can adjust the prices to match the expected rounding of prices. I can't imagine someone being prosecuted from rounding a penny but it's a quick and easy way to avoid any doubt.
> I can't imagine someone being prosecuted from rounding a penny
Under this executive, I wouldn't be so sure. If a grocery chain starts deviating from the law, then the government can use it against them to further a political agenda like we've seen with Eric Adams for example.
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?
So, implement sales tax like Europe does VAT and include it in on the shelf price, and make sure all shelf prices end in 0 or 5. Then, adding up items in a cart will also end in 0 or 5, and the tax is already included, so there is no math beyond the addition that could change the total to anything ending in something that is not 0 or 5. No matter how people pay, cash or card, the price will be the same, and it will always end in 0 or 5. As an added bonus, customers don't have to wonder how much tax they'll pay, because that's already included in the price.
Allowing gas stations to denominate their prices by the 10th of a cent has always struck me as a just an underhanded and extreme way to practice the "9.99" retail psychological trick. Why not allow retailers to price things 9.99999? Ridiculous.
It's because technically the dollar is divided into Dimes, Cents, and Mil. (this is why dimes say 'One Dime' on them instead of 'Ten Cents'.
So while the mil isn't really used anywhere else that regular people see any more due to inflation, it is a valid division of the dollar and that's why they are able to get away with it.
So do whatever they do with mils but for the penny too. They don’t nor have they ever minted a mil coin, so the procedure for this is already well established if this is correct.
Turns out the station charges you a round number of cents per gallon. Then there are federal taxes, which are, IIRC, 24.5 cents per gallon. And then there's state tax, which varies from state to state but seems to always be x.4 cents per gallon.
So I don't think it's just "evil retailer tricks".
Here in Argentina the law says they must be rounded down. Initially it was for 5 AR$cents, and some shops still has the oficial sign that says AR$ 0.05.
We unofficially drop the coins/bills when the reach ~US$0.03, so now we dropped the AR$50 bills and everythig in cash is rounded down to AR$100 (US$0.07).
(The only exception is the photocopy shop 2 blocks away from home.)
Credit cards are charged the exact ammount, with cents that are irrelevant.
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.
They're all easily solvable problems. The issue, as GP mentioned, is that the pennies are just stopping without the thought through these problems and planning for the solutions. This was done via a social media post, not a well thought out transition like Canada had.
If they're easily solvable then why do you need planning?
Changing the currency on a whim by executive fiat is stupid, but that's just principle. In practical terms, I really have a hard time caring about the problems this specific change creates.
> If they're easily solvable then why do you need planning?
Easily solvable problems still need coordination. Do you want to go to one store and have your change rounded up then go to another and have it rounded down?
Sure, who cares? This could already be happening today with rounding fractional pennies. I have no clue if stores round up, or down, or split at .5, or what. But obviously they're doing something, since there aren't physical fractional pennies and my card statements never show more than two decimal digits, so it's not a new problem. This would make the problem five times worse, but five times insignificant is still not something I'm going to worry about.
Ok— Walmart decides to do something the government doesn’t like re:tariffs or whatnot. They can either plead fealty and retract their decision or the C-Suite can defend themselves against conspiracy to commit a zillion misdemeanors an hour…
Does the law say the average price must be the same, or does it say the price must be the same?
Reality: the supermarket does it the common sense way, and never gets sued, but if they do get sued, the outcome is "you must now refund 2 cents from every SNAP transaction you ever did"
Very unlikely that would happen. The way similar issues have been dealt with in the past is that settlement is negotiated to something "reasonable" (at least arguably so) and administrable. Probably the settlement amount would just go to a fund that the state would then distribute according to its priorities.
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.
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 :)
Indeed, gradiens are a scale where a circle is divided into 400 equal parts. Really fucked me up a few times when I got a new calculator and wasn’t paying attention to what the little “grad” meant.
Some pocket calculators from not too long ago supported this unit for some reason, along with radians and degrees. That's the third option on "DRG" button.
It used to be that they gave you the choice. You could round or you could use pennies but you had to be consistent throughout the return, because even the IRS doesn’t care if you manage to scrape out 49 cents.
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.
I'm not really sure about "He said it was to reduce [...] criminals having to store it". Storage shouldn't be a huge problem - IIRC you can pack about a hundred million onto a standard pallet. Even for Escobar, who is THE outlier here, and assuming he's holding 100% of it in cash, that's about 300 pallets which easily fits into a normal warehouse. If you've got that much money it shouldn't be impossible to keep a warehouse like that clean and dry.
Now, "illicit activity" more broadly speaking checks out to me. The EU stopped printing the 500 euro note because it was primarily used for illegal transactions and money laundering.
When the $1000 bill was retired, a loaf of bread cost a couple cents. There was indeed a push to purge them during the drug scares of the late 20th century. A suitcase of $1000 bills is far sexier than one of $100 bills. It really was porting them.
With bitcoin, it's moot.
A $100 is basically a tank of gas and a sandwich in CA.
The 500-euro bill is being phased out for similar reasons. Though it's worth noting a 100-dollar bill was worth more than twice what it is today when Pablo Escobar died.
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).
> 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.
Problem is it isn't just the $5.99 rounds to $6.00 it is tax. If the end cost is $6.36 will the state be happy with that one penny less? For any state 1 penny per transaction is millions of dollars per year! (note that I had to change your price from 4.99 to 5.99 - 5.00 times any tax rate is an even multiple of 5 and so cannot make the point).
Individual stores generally only have to deal with one. Set the prices at the store, and make them tax-inclusive while you're at it. This isn't rocket science.
Companies serve billions of web pages per second. We can't handle 12,000 tax calculations?
If only it were that simple. Some sales taxes are conditional at the point-of-sale. Different customers may pay a different tax rate. This creates a situation where the display price will be incorrect part of the time and may not round to 5c or whatever the legal quantum is.
I wonder if this could encourage retailers to start advertising tax-inclusive prices. That way there's no rounding in the customer transaction (if they set all their tax-inclusive pricing at multiples of 5 cents), and then the sales tax would just be calculated in aggregate, and paid electronically with no rounding.
Is the tax unknown at the time of setting the price? If that's the problem, set the final price at price + tax, deduce tax, display that. What's the matter?
I doubt that most people in the US know the local sales tax. Let alone any change that may occur due to laws changing or traveling. I'd like to see the out the door price listed but that throws the 99 cent game off retailers like. Also I don't shop very often but Aldi US is the only place I've seen the eink price displays, the rest still have paper.
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.
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.
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.
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
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.
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.
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.
> 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.
Since I'm already doing armchair stuff I'll just say that there's an argument to be made that consumer electronics HAVE to be cheaper due to the extremely inflated cost of essentials right now, which is the result of lack of regulation. It's not the system regulating itself it's just more bottom line chasing.
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.
> They don't know how many things anyone is going to buy.
They have historical data, so they know on average people buy 5 things, and they will have data on what impact on purchasing behavior the changes have. Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
> Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
Why would they ever tune for that? “Uh oh, turns out customers are intentionally spending more money!”
I don’t understand how this same train of thought comes up every time eliminating pennies is raised. This whole train of thought collapses if you consider the scope we’re talking about (literally a couple of cents max per transaction) and how stores actually behave today. Stores are happy to drop a couple of pennies to make prices look better. But in this hypothetical world stores are going to calculate the optimal prices to round in a way that rips off customers for a couple of cents. This makes no sense. They give up a penny on nearly every item today for the sake of “pretty” prices.
Edit: Oh, I see you’re arguing that they would tune to encourage spending up to “save” the couple of cents, rather than retuning in response to the hypothetical increased spending. No doubt they would like to do this. I doubt they actually would because this is not trivial and it would require ruining the pretty prices.
You’re arguing about nonsense scenarios. Hypothetically every business could also tack a “convenience fee” of $20 on every purchase like TicketMaster and make 200k off this imaginary customer.
Also even if a business rounded up every transaction, the expected benefit is 2 cents per transaction vs fair rounding, not 4 cents.
What's even to say anything will be rounded down? If Walmart says "we're going to round anything from $0.01 to $0.04 up to $0.05," do you think the free market would put them out of business out of principle, or would they get away with it? I think they'd get away with it.
> 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.
"In cash" is entirely separate from the rounding debate and is just the "people use cards, anyway" argument. It's not relevant to this discussion. This discussion is about cash. I do buy single items at stores sometimes.
> 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.
Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
> Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
> Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
You don't think businesses take advantage of situations for more profit?
Take this year's tariffs as an example. As you may've heard, UPS is charging customs brokerage fees of dozens or hundreds of dollars on top of the actual tariff payment; identical shipments sent via FedEx or DHL are only charged a few dollars for the service of customs brokerage, so we know UPS's actual costs for providing that service aren't that high. They saw a situation where consumers would be confused about prices and took advantage of it to make a lot more money by simply charging a lot more than they need to.
"But where's the law saying they couldn't have just raised their prices by hundreds of dollars without tariffs? Where's the law?!" There wasn't one, they could've raised their prices for international shipments before the tariffs happened. But consumers would have noticed a lot more and accepted it a lot less. They took advantage of the situation because the situation allowed them to get away with it.
> Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
I'm not sure what you're arguing here. You admitted the $0.99 number has a psychological effect that outweighs the $0.01 gain of charging the extra cent. That would be the reason they don't do that. It's not super relevant to the discussion of whether rounding can/will be gamed.
>You don't think businesses take advantage of situations for more profit?
That's not the point. Businesses are obviously happy to raise prices under the confusion of other changes, but I find it very hard to believe "accounting fees" are a plausible way to do so. People know that the register machine can do the calculations easily - it already does so. And there is a good reason for businesses not to introduce such fees, because they are directly visible to the consumer who is going to complain and shop elsewhere.
The UPS example is apples to oranges. Tariffs are poorly understood, and consumers rarely shop around for shipping - they tend to take the service given by the merchant. The agency people will show on 2 random cents on every shop is way higher.
>It's not super relevant to the discussion of whether rounding can/will be gamed.
It's very relevant. How are consumers going to react to a price like $1.03? Especially since that's almost certainly something that would previously have been priced at $1.
> UPS is charging customs brokerage fees of dozens or hundreds of dollars on top of the actual tariff payment
To reinforce this point... UPS just does this all the time. I had to have a number of personal effects[1] shipped up from the US to Canada that I requested self-declaration forms for them and never received them - UPS decided to brokerage the shipment themselves. We then spent the next three months fighting a six hundred dollar charge[2] that should have never existed.
UPS is going to defraud customers on brokerage fees regardless of the scenario - it's just what UPS does. You've got bigger problems to worry about - the impact of dropping the penny will be unnoticeable in the sea of general corruption and fraud.
1. Items that you own in one country and are shipping to Canada for personal possession are exempt from most normal tariffs.
2. To really add icing to outrage - this was more than double the original shipping price and, considering we delivered an itemization with the shipment for customs UPS could calculate their BS fee upfront and show the actual cost to the customer but they don't because the US doesn't force them to.
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?
Americans like to pretend that history and the experience of the rest of the world doesn't exist and that things that large numbers of other countries have done successfully (and which even the US has done in the past, in this case, as the half-penny, after all, was phase out a long time ago) are impossible to do successfully.
Sales taxes as they are known in the US were largely introduced in the 20th century. The half-penny was phased out in the mid-19th century.
The legal structure of sales taxes in the US present some unique challenges that simply don't exist as problems that needed to be solved in other countries. These problems can't be legislated away because the authority to do so is highly decentralized. Pretending that these problems don't exist because they don't exist elsewhere is not helpful.
This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
> Pretending that these problems don't exist because they don't exist elsewhere is not helpful.
Pretend that’s everything in the US is globally unique to us also is not helpful. “No one else has sales tax like us” is likely not true but also not super relevant. Tax collecting agencies in 50 states and however many territories could issue guidance tomorrow for how to deal with this and it would have the force of law until/unless legislatures see fit to define different rules.
> for every complex problem there is a solution that is simple, obvious, and wrong.
Sure, but for every simple problem there is a small army of people online pretending it’s insurmountable.
The tax authorities cannot unilaterally change the law with "guidance".
It is explicitly written into statute in many cases, requiring legislative action across thousands of independent tax authorities. Complicating it more is that in some cases a change must satisfy constitutional requirements which are even harder to change.
Everything is easy if you pretend that you can change things by authoritarian fiat instead of abiding by existing statutory and constitutional restrictions. The courts would never allow it.
> The tax authorities cannot unilaterally change the law with "guidance".
The standard model for regulation is generally that the law empowers some agency to clear up any ambiguities.
Doubtful that any state has legislation on how to handle taxation if pennies are unavailable so a state tax body issuing reasonable guidance is a very believable outcome.
> It is explicitly written into statute in many cases, requiring legislative action across thousands of independent tax authorities. Complicating it more is that in some cases a change must satisfy constitutional requirements which are even harder to change.
Show me the legislation that says “taxes must be collected to the penny based on the posted price without rounding”.
What are these “thousands of independent tax authorities” anyway? Are you under the impression that every city and county needs to agree change the tax law? State law trumps local laws. Washington State doesn’t need Seattle to agree with laws specifying new rounding rules.
> Everything is easy if you pretend that you can change things by authoritarian fiat instead of abiding by existing statutory and constitutional restrictions. The courts would never allow it.
Have you not been around for the last 10 months?
But also the courts tend to be fairly reasonable. Faced with conflicting requirements they generally don’t say “fuck it you’re all going to jail” but direct legislatures to fix the issue. No way we end up in a situation where pennies are unavailable and the courts tell stores that they have to shut down or stop accepting cash entirely because there isn’t a legislatively specified way to round transactions to the nickel.
Unless I’m missing something, existing pennies are also not being removed from circulation, so none of this seems to be a major issue yet. Legislatures could do their jobs and clear this up quickly of they choose to.
>The legal structure of sales taxes in the US present some unique challenges
Nothing about sales tax in the US is unique at all. It is not special. It is not hard. It is not a complex problem. It is basically a lookup, and computerized POS systems have managed it just fine since the dawn of computerized POS systems.
In fact, when those sales taxes were first implemented, there was problems relating to how to manage sales that resulted in fractions of a cent worth of sales tax to account for. Several states created sales tax tokens worth fractions of a cent and had to insist that it didn't technically count as money because states can't mint money legally.
Nobody went to jail. It was a minor nuisance for consumers and was quickly replaced with law changes to just have explicit rules for the edge case, which is the entire reason we have legislatures. If you don't want retailers to respond to this change in a certain way, have your legislatures say that.
>This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
Just stop already. The US is not special. The US regularly insists it cannot do the same things everyone else does and it is just wrong. We literally have textbooks full of examples from our own country. We've already phased out coinage before.
The UK went from it's absurd money system to reasonable and decimalized money within living memory! 15 February 1971. Sweden had a day where they switched from left hand roads to right hand roads! https://en.wikipedia.org/wiki/Dagen_H Most of Europe switched to Euros in living memory as well!
Stop insisting reasonable societal problems are too hard to solve, because that's the only actual reason they are hard to solve
>These problems can't be legislated away because the authority to do so is highly decentralized.
It isn't at all. It's in the Federal government, and it's in your local state government, and it's in your local-er governments, and that is just like a lot of other countries. A couple layers isn't "very decentralized".
It is only in the past 50 or so years that a singular political party has insisted that the same political party that did all sorts of speedy and useful lawmaking for a hundred years suddenly cannot adapt quickly. Meanwhile, 48 state governments continue to function mostly fine, with few problems adapting to local specific problems in a timely manner. If your state cannot adapt to this quickly and easily and without serious issues, consider electing different people.
Sales taxes in the US are truly and insanely decentralized.
The US has thousands of independent sales tax authorities with their own laws and regulations about how sales tax must be computed and displayed. These jurisdictions overlap, the sales tax you pay may be the aggregate of multiple different sales tax authorities between which there is no coordination.
Rounding to the nearest 5c or whatever creates a situation where in many locales it would be impossible to comply with sales tax and pricing laws because different tax authorities requiring mutually exclusive ways of making this change.
This creates an obvious need to change the law. This is not trivial because they are often written into statute or constrained by constitutional processes. It requires thousands of jurisdictions to all change their laws at the same time in the same way, which is effectively impossible. Even if it weren't the process would require several years. In many locales it requires a democratic vote -- what if the voters vote against it? Courts aren't going to let the government ignore these requirements because it would be inconvenient.
It really is a "herding cats" problem. There are many other things in the US that effectively can't be changed because there is no central authority to overcome coordination problems by fiat. Even at the level of all 50 States, resolving these kinds of coordination problems typically takes several decades.
As others have pointed out, governments sometimes issue actual guidance on how it's supposed to work when they phase out currency. It's not always "just stop making them and see how the market deals with it."
> It's not always "just stop making them and see how the market deals with it."
On the other hand, we’ve been delaying this inevitable and necessary action for decades over hand-wringing about the implications of rounding up or down by a maximum of two damn cents per transactions _for decades_. If we did it “the right way” I’m sure it would take years and years and cost millions of dollars to “study the effects” of eliminating the penny. Just do it already. Even with the best plan in the world people are going to whine about rounding.
It makes no sense to spend more money to mint the actual money, then the money is worth OK. You might not like it, but something has to be done because to continue in a slow and methodical process
1) forgets that the government is the same entity that runs the DMV
2) people love to throw out criticisms of solutions that aren’t perfect not realizing that it’s still better than the status quo. To do nothing is costing money or in the case of Ukraine it’s costing lives.
3) I bet you $100 You don’t like Trump.
1) DMV is state-run, not federal govt.
2) Why can't we at least spend 5 minutes studying how it went in Canada, and learn that govt guidance was helpful to the transition, so do that too?
3) Sure. And even more because, even when he DOES pick up on a good idea (I support elimination of the penny), he does so in a haphazard / slipshod way that the end result is often worse than if nothing had been done.
I actually like Trump (or at least his presidency) a lot more than I think most Hacker News browsers do. I like Trump's presidency more than most of my co-workers and many of my friends do. My arguments in this thread are entirely my own, not the product of some political allegiance.
You attempt that at my store. To help ensure my business is sustainable in these hard times (/s), I'm imposing a "multi-item order" fee at my store. Now what?
Pizza chains have delivery fees that aren't paid to delivery drivers. Restaurants have service fees for cooking food and convenience fees for placing orders (even if paying, in cash, when you pick up), on top of the sticker price of the food itself, which used to just be the price.
Some people in this thread have talked about stores having signs saying they'll round change up to the dollar if you pay in cash, and advising to pay by card if you want exact change. I've personally seen businesses have signs on their cash registers that say "our cash register is easily hacked, we strongly recommend paying by cash instead instead of card" (I'm assuming so they can cheat on their taxes).
Businesses will do anything they can get away with to make more money, and they can usually get away with tiny fees like this. It's only a few cents, right? Except for them, it adds up.
This is nonsense. No store is going to charge a multi item fee so that they can try to scrape an extra penny off their customers. As someone else’s already pointed out, they could just do this today if they believe their customers will accept it. Did you forget that stores can just raise prices?
Your premise that stores will find a way to force rounding up is nonsense. It’s nonsense because stores aren’t actually going to do it, but also because we’re talking about *pennies*. Oh, no. The store ripped me off for 2 cents. How will I survive?
> As someone else’s already pointed out, they could just do this today if they believe their customers will accept it. Did you forget that stores can just raise prices?
As I already pointed out, customers would be more likely to accept it if there's an excuse for it (pennies are being phased out) than just randomly. The discussion's about what rounding may cause, not about what stores have the legal ability to do.
> It’s nonsense because stores aren’t actually going to do it, but also because we’re talking about pennies. Oh, no. The store ripped me off for 2 cents. How will I survive?
So this argument is just "you may be right, but I don't care." That's not an argument, imo.
No one is going to buy “multi transaction fee” because of pennies being phased out. This makes no sense.
You have constructed a whole chain of absurd claims that have no basis Did you forget that right now, today, stores willingly take a cent off virtually every price so they can do the x.99 thing?
> So this argument is just "you may be right, but I don't care." That's not an argument, imo.
No. I can simultaneously believe that you are wrong and also that the fundamental concern is absurd.
There's not as much incentive to right now, because I don't have an excuse to round up prices, and customers don't have a case for rounding down prices. This discussion's about the possible effects of rounding, not about whether businesses are in control of their prices.
If the store is e.g. Walmart, then their scale's already large enough that I don't think this is going to put them under. And if every store's doing it, then there'll be nowhere to turn to.
What if the stores detain you and force you to work in their perfume department to pay off the million-dollar multi-item fee they just thought up? What if they also do a bunch of allergen testing on you to figure out what you're allergic to and then make you exclusively sell perfumes containing those allergens?
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 $1.12167. Unless of course you bill also includes a mix of taxable and non-taxable items like food, etc..
Sales taxes already result in rounding, which the store could try to take advantage of. They never do. They set prices to end in 99 because it's psychologically more attractive. That will most likely continue. If they're required to price in multiples of 5, we'll see prices ending in 95.
Unlikely that stores would be required to price in 5 cent increments. That would presumably require legislative action and would fly in the face of gas stations today pricing with fractional cents.
Sales tax rates aren't secret. Stores can set their prices with it in mind. Consumers are far less likely to have sales tax rates memorized and to go through the trouble of checking how things'll work out from the sticker price before they get to the register.
Now, a 4 1/3 oz Coke is obviously too small to be worth bothering with. But that's also true of a 6 1/2 oz Coke. These sizes seem more like something you dispense with an eyedropper than something you drink. A normal can is 12 oz! Who'd want to buy a six-ounce beverage?
You can address both problems at once by doubling the price and increasing the volume all the way up to 8.67 oz.
When I was a kid, most sodas had a short can size of 8oz available, good for "lunches" and similar.
Funny story, Coca Cola just announced thin 7.5oz cans last month, to be available in January.
Shrinkflation is often done by phasing out an old size, often by jacking up the price first to aid the sales of the "family size" version on its way out, and then introducing a "New" size that's just a bit smaller.
If you go through coffee regularly, it's actually quite a nice thing to invest in. There are a really amazing number of craft roasters throughout the country, and simply having a quality grinder is enough. And you don't need a crazy espresso setup to enjoy it. My setup consists of a motorized flat burr grinder, a 20$ kettle from target, and a pour over funnel. The quality is so much higher than anything you can get from a pod that's been sitting around with pre ground coffee, and it only takes a couple minutes while you're waiting for Claude to rewrite your codebase in Rust or whatever it is "Hackers" do these days
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.
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.
I wouldn't think there is enough coinage in a register to be interesting as a theft target, but i don't know! I think they would still make bill change, but maybe I misunderstood, sure. Next time I see one I'll use cash to find out!
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.
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).
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.
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.
>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?)
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.
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.
I’ve found that self-checkouts in Canada are a great way to get rid of piles of change. You can pretty much dump it in. Curiously, it will reject all the US coins and spit them back out.
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.
Some interesting complications with rounding I had not heard about before were mentioned here, worth noting I think, especially given the prominence of SNAP in the news lately:
>Four states - Delaware, Connecticut, Michigan and Oregon - as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change, according to the National Association of Convenience Stores (NACS).
>In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.
>“Rounding down on all transactions presents several challenges beyond the loss of an average of 2 cents per transaction,” Lenard said. “We desperately need legislation that allows rounding so retailers can make change for these customers.”
They can round down the card transactions too if it’s really a problem to charge differing amounts.
For those that seriously think this would be a major problem there was a comedy skit circulating in Australia when this happened. A guy would push his car to the petrol pump, fill with 2c of petrol, rounded down to 0. The guy at the counter just laughed at it. You could in theory do this 1000 more times (would take hours) for $20 of free petrol. At least until the worker got sick of it and enforced the whole right to refuse service.
In the Netherlands cash payments get rounded to the nearest 5 cents, in both directions. Card payments are not rounded. If I’m not mistaken, you can still demand exact change according to the law and you’re allowed to pay the exact amount (cents are still legal tender). Most merchants wouldn’t be able to give you exact change, so it depends on the situation what would happen. I’ve never heard of such a situation happening, though.
You are mistaken. Merchants are allowed to round to the nearest 5 cents and you can’t do anything about it (except pay by card). Of course, budget stores like Lidl and Aldi still use them but any other corporation is not going to care.
The SNAP equal treatment rule requirement works in both directions: Prices cannot be higher or lower for SNAP recipients. As a retailer, there is an option to request a waiver, though.
IMO, this is a strawman that is either going to be ignored or fixed easily.
The law did not account for every possible situation. Removal of the penny from national currency is clear a situation where minor variations on otherwise normal transactions would not be in violation of the intent of the law.
It'd be like TSA griping that your 100ml bottle of mouthwash was overfilled by .1ml because of slight variations in the filling process. Nobody cares.
I work in admin for a retailer. We got a nastigram from USDA last week reminding us that we were in no circumstances to help SNAP recipients in any way. The current administration very much does not care what the intent of the law is, and is actively looking for trivial violations as an excuse to punish SNAP recipients and SNAP retailers. It would not surprise me at all to see a retailer banned from the program for how they round pennies.
Completely different discussion. Regardless, you skipped explaining why these options worked for Canadian Penny (just 12 years ago) at a time when their penny had more buying power than the current US penny, yet the exact same thing cannot ever possibly work for the US penny.
Things don't just happen to cost *.99 today either, the market just has wiggle room for bullshit about values. With inflation, the coinage that corresponds to also inflates over time. The penny is long past its time.
Furthermore:
> Rounding to the closest nickel will cost consumers about $6 million a year, according to a July study by the Federal Reserve Bank of Richmond. That is fairly modest, coming to about five cents each across 133 million American households.
The US lost ~$85 million minting pennies in 2024 because they cost more to make than they are worth. That's over a 10x savings, not a loss. 5 cents is also less than 0.00006% of median household income in 2024.
If people were actually that worried we'd have had laws about credit card transaction fees decades ago.
How does this work with coupons, discount for loyalty card holders, etc.?
Presumably that's fine because a SNAP recipient has access to those same discounts. So wouldn't this be the same - the "cash rounding" discount is available to SNAP and people paying cash?
Anyone can have a coupon the law is about not special fees or discounts to SNAP recipients, and since EBT/SNAP cards are essentially debit cards them always being charged exact change could be litigated as differential pricing in theory, which in a country as big and sue happy as the US means someone will try it eventually.
It's not like pennies just cease existing. You just can't buy them from the mint anymore.
I bet if you give customers an easy and free way to deposit change or to turn it into larger denominations you easily get enough pennies to delay ther update a couple years
There are a lot of solutions, as everyone has mentioned. The problem is not hard, it’s “what color to paint the bikeshed” territory. But we’re still having to solve a problem on a tight deadline based on a tweeted proclamation with no federal legislature specifying exactly what solutions are allowed and what solutions conflict with existing law.
It's just American custom to exclude some taxes from the posted price. Many countries include all taxes in the price, something I've always wished we would do in America. After that, I'd love to see the elimination of the custom of always ending fuel cost per gallon in 9/10 of a cent.
Rounding sales tax on each item will often result in a different price than rounding once for the total. The store will collect the wrong amount of tax that way.
They're saying include the sales tax in the price and set the item's price such that the sum of price + all taxes is an even increment of 5 cents. Gets a little tricky with fractional sales taxes but that's only a problem where POS systems strictly enforce 2 digit cents (not sure if that's the case).
Come on, this is not complicated. It's elementary algebra. You sum the rounded prices, then add a credit or surcharge of 2 cents to make the tax come out to a round number.
The tax is on the actual, real amount in your transaction subtotal. You are charged sales tax on the actual, real money you pay for the entire transaction. Then you multiply by 1.06 or whatever the tax rate is. That's how sales tax works.
If one rearranges the equations as we all learned in 5th grade, one can compute the amount that the subtotal must be to get a round number after tax. Then you charge or credit the customer the difference.
Alternatively, the retailer can simply pay the 4 cent difference in sales tax.
That's it. You either do algebra or just pay the difference. It is not complicated.
You have to do this algebra per state and locale, and your reward is higher advertised prices than the shop next door. I think you both underestimate the problem and overestimate everyone involved in retail, especially the consumer.
I’m not saying it’s hard, I’m saying there is enough friction where it’s just not going to happen without legislation mandating it.
Well, this is happening without legislation mandating it (that’s kinda the problem, our federal legislature doesn’t legislate much and is being largely ignored)
I don’t see why that would be the case? In my country, most prices with VAT (which is what you’re charged) are nice, round numbers, but not the price without VAT.
I suppose the stores set a target price, and then adjust it a bit to make the price + VAT a “nice” number.
Is there a reason that couldn’t be done to make all prices + VAT multiples of 5c?
The local tax is set by multiple independent tax authorities that change their taxes independently, the tax you see is the aggregate of those independent authorities computed separately, which do not coordinate with each other.
Some of these taxes are conditional at point-of-sale, late-binding the taxes, such that different customers are subject to different rates across these tax authorities such that it is unlikely to round to exactly 5c.
It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.
And on top of all of this, the Federal government does not have the authority to regulate the way States and various locales structure their sales taxes. It is a herding cats problem.
> It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.
Having lived in Europe, this should be changed. It makes it infeasible to keep track of your total bill as you shop. The amount without tax should be printed on the receipt, if you care to reference it.
The issue is that the legal change would have to be made independently across thousands of decentralized tax authorities. Herding that many cats is infeasible so it can't be part of a plausible solution. In some jurisdictions, the legal process required to make the changes have effectively insurmountable voting thresholds.
It may not be convenient but any realistic solution has to recognize the hard facts that shape the nature of problem.
Lots of localities total taxes aren't whole percentages so it potentially gets tricky making prices work in those systems such that you can make whole 5 cent tax included prices with whole cent base prices. Do most POS systems support arbitrary precision item prices?
IIRC, in New York it’s illegal to absorb sales tax on individual items because by law it’s a consumer tax collected by the business and explicitly not a tax on the business itself, but - and it’s a pretty big exception - anything sold as a bulk good can include the tax in the price. That includes things like liquid fuels, grains or candy by the scoop in the supermarket, loose sand/gravel/salt/whatever for outdoor use, and things like that. It’s been a long while since I had to set up an ecommerce site for New York though.
Who actually pays the tax depends on the Elasticity of the consumer and the business. Who the law says it should be collected from, is really irrelevant.
More specifically, if Americans stopped have a daily reminder of how much is paid in taxes (which IMO isn't egregious by any stretch), one party would have a tougher time whipping anti-tax sentiment.
Just show the price including tax. (half-sarcastic, because obviously that would be an unpopular change for sellers because it makes the visible number go up, but it would solve two problmes...)
They could still set the post-tax price to something that results in round numbers, at downside of the pre-tax price having more decimals.
With a tax rate as precise as 1000ths of a percent in many jurisdictions*, you'd need extreme precision on the price tag (e.g. $11.798625), OR you need to substantially overcharge for tax (rounding up the tax to the penny or nickel on each individual item, instead of on the total of ALL items).
And sales tax rates can even be different from ONE CITY BLOCK TO THE NEXT.
So, lobby for changes to the structure of those taxes so that's not a problem. Tthe simple solution is changing them from surcharges adding a percent onto posted prices to making them a percentage taken out of the posted price; so that coin availability is only an issue in the improbable event that you are paying your sales tax bill in cash.
Of course, retailers don't want tax-inclusive posted prices, but... ::shrug::
With some 5th grade algebra, one can adjust the total of a transaction to result in a round number after taxes.
Besides that, the law (at least where I live) is that the tax must be paid, but it does not specify by whom. It's completely feasible for a retailer to pay the 2 cent difference in the tax and charge the customer a round number.
Is this really the state of American education where a percentage calculation makes a very simple situation literally impossible? You can think of no other way to overcome the complicated calculations of checks notes x times 1.06?
Even with just a 6% tax, you end up with prices that need 4 digits of precision after the decimal (e.g.: $11.6494). That issue extends over a wide range of pre-tax/input prices, so one would have to DRASTICALLY change the prices so that the price including 6% tax rounds to even a penny, let alone a nickel.
While you could calculate a price that (after tax) would round a single item to the nearest nickel, it's completely IMPOSSIBLE to do so with unknown numbers of multiple items.
In addition, tax rates in the real world aren't just single-digit percentages. They have precision of 1/1000th of a percent, making such a calculation much more challenging.
Arizona: 10.725%
Hawaii: 4.712%
Minnesota: 7.875%
etc.
And sales tax rates can be different from ONE CITY BLOCK TO THE NEXT, so a company with more than one location would find it IMPOSSIBLE to advertise their prices at all.
Right, but getting fined in this situation means the government is incompetent. They should just tell retailers the "right" thing to do and not fine any retailers that follow the guidelines.
The idea that this is complicated legally is an example of why so many Americans are so frustrated with their government. Common sense should rule the day, not mindless legalism.
The issue with "common sense" is there's no way to run anything based on it because you'll get 100 different ideas of what that means in any situation. 90% of customers would be fine with the rounding to the nearest 5 cent plan but there's a streak of stubborn people who'd refuse to accept it and waste some legal time trying to get proven 'right' so the stores want legal clarity so they don't have to deal with that.
We eliminated pennies in Canada in 2012 and the transition was a non-issue. The vast majority of retailers would round cash transactions to the nearest $0.05, but a few would round down to the nearest $0.05 in favor of the customer. https://en.wikipedia.org/wiki/Withdrawal_of_low-denomination...
Canadian cash is better than American cash in several ways: No penny, durable polymer banknotes (instead of dirty wrinkly cotton paper), colorful banknotes (instead of all green) that are easy to distinguish, $1 and $2 coins in wide circulation (instead of worn-out $1 bills).
I'm reminded of when Minnesota passed the Minnesota Clean Indoor Air Act (MCIAA) close to 20 years ago. (Some) restauranteurs - along with the GOP - made pronouncements about how this would destroy the economy. No one would go to out to eat or for a drink again. Doom and gloom.
Last I checked, there are plenty of restaurants open in the state, and things are going fine. In fact, just before the MCIAA went into effect, I had a newborn, and we went out to eat one time with him in tow. We asked for a non-smoking area but were placed immediately next to a family chain smoking. We decided to never go out to eat again until we could do so without risk of second-hand smoke.
My point is that there are frequently these predictions of things being impossible or even just incredibly difficult and not worth the effort, and in the end, it's not a big deal.
> I'm reminded of when Minnesota passed the Minnesota Clean Indoor Air Act (MCIAA) close to 20 years ago. (Some) restauranteurs - along with the GOP - made pronouncements about how this would destroy the economy. No one would go to out to eat or for a drink again. Doom and gloom.
Yeah, they had done the same thing when California did the same thing 30 years ago. The fact that it didn't happen then didn't stop them from doing it everywhere else similar laws were subsequently proposed.
People overestimated the importance that smokers placed on being able to smoke in public.
A Japanese airline (Air Do) tried reintroducing the smoking section in the 1990s. It did not go well for them, and Japan's tobacco use rate was several times the US's.
I'll agree on all but one point. The cotton/linen notes feel so much better in the hand than the candy wrapper plastic of Canadian bills. I know it's a dumb reason, but I just hate the feeling.
My politics and his don't line up but I'm not against this. It would be pretty interesting to see the impact on cash usage, and faces on money are pretty archeologically useful-- at least on coins.
let's wait a few years before rotating faces to avoid debating another blatantly illegal thing Dear Leader would propose (actually he already did but it was out of the news rather quickly)
I am suspicious of any claims about relative cleanliness. As with wooden vs plastic cutting boards, our intuitions are likely misleading.
To be an effective fomite the currency has to not kill the microbe, and it has to readily give up the microbe to the next recipient. Organic materials like cotton or linen seem more likely to simply absorb a viral envelope or bacterial cell wall, thereby rendering it ineffective. Furthermore, the porous nature makes it more difficult for the note to give up any microbe that isn't immediately killed before it naturally dies over time.
A brief search of the scientific literature doesn't seem to show any conclusive results, but it does seem like the relative performance is pathogen specific.
The linked article raises a few problems that the US could have with that solution:
> Four states - Delaware, Connecticut, Michigan and Oregon - as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change.
This seems like a non-issue as long as they round the price down. Because there's no law that the store can't discount their total by a small amount and then provide exact change.
"Congratulations customer, we have a special coupon today for $0.03 off your purchase. Here's your change :)"
> In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.
So just round snap transactions too, not just cash ones. Now SNAP recipients are never paying more than any other customer for the same basket of goods.
So how do they account for people who use coupons or rewards cards today? Those create a discount that technically result in charging some customers less than others, including SNAP users. In the case of rounding, you wouldn't be charging SNAP user any more that other users who use cards for payment. The point of the law was to prevent stores from charging surcharges etc on food stamp users back in the day.
Rewards are taken from merchant fees. The retailer isn't party to that rebate. Likewise, coupons are almost always funded by the manufacturer who returns those monies to the store.
That would be true for credit card fees, but not for stuff like loyalty card discounts.
"Likewise, coupons are almost always funded by the manufacturer who returns those monies to the store."
It doesn't matter. The store is the one charging the customer. As stated, the law says the store cannot charge SNAP recipients more. Thus it would be a violation if we are taking it strictly.
When I lived in Australia, those paying with card were charged the exact amount. Those paying cash would round to the nearest 5 cents, in the customer’s favor. I suspect the same will happen here.
I don't see why you couldn't do it in either case. If you modify the actual price, then you are giving exact change. Why wouldn't round() be as valid a price modification as floor()?
Presumably "increase the price a small amount to avoid giving exact change" is exactly the sort of thing that laws requiring giving exact change were designed to prevent.
There will surely be some customer pissed about the extra 2 cents they were charged who will raise hell over the exact change law.
But what customer is going to be upset over a small discount?
At big retailers the price tag code indicates what type of price it is. For example the last digits can mean:
0: full
9: sale
8: reduced
7: clearance (item will not restock)
I forget the exact system Sears used but we could tell at a glance if a deal was really “good”.
I’m curious if Sears and WalMart used different systems and if WalMart exploited knowledge of the Sears system to signal better prices to shoppers. Like a full WalMart price being .97 and clearance being .94.
That sounds close to the Sears system to me, but they used the tens place. 8x was used for returned big ticket items, like appliances and treadmills. It would start at 88 and the rightmost digit would decrement to indicate how many weeks it had been sitting there.
It was 00 for full, 99 for sale (the majority of items, except for the one week every year they established the full price for that product), 8x for clearance.
It’s far more complicated than that. There is no one sales tax for everyone.
Oregon residents didn’t pay sales tax when making purchases in Idaho. Washington charges sales tax on out of state purchases if that state’s sales tax is less than Washington’s, including if it is zero.
If the US properly got rid of pennies (instead of Trump just doing another end-run around congress, by ordering the Mint to stop making them, on shaky legal ground), the legislation could easily supersede those state laws.
As far as I can tell the relevant statute is 31 USC §5112, and it does not require the minting of all authorized coins:
“(a) The Secretary of the Treasury *may mint* and issue only the following coins: ... (6) ... a one-cent coin that is 0.75 inch in diameter and weighs 3.11 grams.”
(Emphasis mine)
There may be another clause somewhere that requires the Treasury to issue all coins, but that seems unlikely to me. The _number_ of coins to issue of each type is left to the discretion of the Treasury; why wouldn't that include the option to issue none?
I addressed in another reply that "'none' is all that's necessary" is probably a defensible interpretation of the law (the more relevant portion being in 5111 rather than 5112), but the penny being explicitly listed makes it clearly not the intention of congress. That's why I said it's a "shaky" and not "baseless" legal ground. The law is clearly written with the expectation that there will be some, which is why Congress felt the need to pass the Coinage Act of 1857 to phase out the half cent.
I think we should get rid of the penny, but it's Congress's responsibility to do that, and they haven't. I'm opposed to Congress abdicating its power and responsibility like that.
5111(a)(1) says “shall mint and issue coins” but qualifies it explicitly with “in amounts the Secretary decides are necessary to meet the needs of the United States”. This is a clear delegation of authority.
If you don't think zero pennies is a permissible amount, what about one penny? Two? What minimum number are you arguing for here, and what's your justification for it?
If Congress had wanted to set a minimum number, they could have done so.
Reading it as ”shall mint” is wrong, I think. “Shall” qualifies the whole clause “mint in amounts the Secretary decides (etc.)”.
Understood that way, 5111 makes it unlawful to mint any pennies if the Secretary decides that none are necessary.
If Congress had wanted to get rid of the penny, they would have done so, since they specifically have the power to “coin money” under Article 1, Section 8.
In fact they have introduced a bill to do just that, that has not passed yet, which means they have not done that.
Article 1, Section 8 of the constitution gives Congress the authority responsibility to coin money. And in the coinage act of 1792, 31 USC 5111(a)(1), congress directs that the treasury "shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States", with the list in section 5112 explicitly listing the penny (31 USC 5112(a)(6)). It's clearly intended to instruct the treasury to mint pennies without congress needing to proscribe the varying amount every year. It also clearly demonstrates the intent that pennies "shall" be produced.
The fact that all of that gives leeway for "'none' is all that's necessary" is why I said the legal basis was "shaky" and not "baseless". I think getting rid of pennies is good, but this is something that Congress needs to do, rather than continually abdicating its responsibilities.
> The United States is the only country that prints all denominations of currency in the same size. The US and Switzerland are the only two countries that use the same colors for all of their various bills. Needless to say, this sameness of size and color make it impossible for a blind person to locate the correct bills to make a purchase without some sort of assistance, or confirm that he or she has been given the correct change by the sales clerk. Even people with partial sight may have trouble distinguishing a $1 bill from a $10, especially if the bill is old and worn.
> The United States is the only country that prints all denominations of currency in the same size
Let me assure you that all Canadian banknotes are the same size too, 6.00 inch × 2.75 inch (152.40 mm × 69.85 mm). I'm not sure how the article got this fact wrong.
As a Canadian, I'm amused to hear this because it is basically true as a first approximation.
Random factoid - Canadian coins ($2, $1, $0.25, $0.10, $0.05, $0.01 (withdrawn)) come in almost the same denominations as US coins ($1 (uncommon), $0.05 (rare), $0.25, $0.10, $0.05, $0.01), and they are the same diameter and thickness, but maybe having different weight and magnetic properties. It's kind of scary that Canadian coins are essentially state-sanctioned counterfeits of US coins.
Another weird thing is that the National Basketball Association (NBA) has 29 American teams and 1 Canadian one... making it more of an international basketball association. I think another sports league with "national" in its name also crosses national boundaries.
If you take a random person and teleport them between a random mix of Canadian and US cities, I think they'll find it hard to tell the two countries apart. The primary language is English, the accent is the same, the streets and buildings look the same, people watch/listen/read much of the same media, and so on.
One party trick that I practice when traveling in America is to not volunteer information about where I'm from, and see how long I can blend into groups of people and conversations until someone suspects something or asks a direct question. Needless to say, I can last pretty long, and even debated things like US federal politics. The internal diversity of people within the US (e.g. skin color, accent, beliefs) really helps an outsider like me blend in.
Also note that there is a one-way relationship going on. Canadians know more about the US than what's necessary for life. Heck, even the state broadcaster CBC will put out entire news segments (e.g. 5 to 20 minutes) on US-specific issues. Knowing about the US - whether it's major companies, cities, TV series - is unavoidable to Canadians. But ask the average American about anything related to Canada, and you'll likely get a blank stare.
However, some of the differences between Canada and the USA include: Guns(!), personal and state violence, healthcare, social safety net, political polarization, income, prestige, number of big companies, French language, atmospheric climate.
It's a bit odd that the mint doesn't emboss the denomination in braille on each note. I'd think that there would be a way to do that and have it hold up pretty well in circulation?
I think I've seen that blind people in the US have a little machine that they can use to add the braille themselves. Also from a quick google search there's also electronic bill readers that can be provided to blind people for free if they qualify.
In Canada the bills are embossed with braille by the mint. There may be other accommodations too, but I haven't looked it up.
In canada it's "one cluster of dots = $5, two clusters = $10, three = $20" and so on. You just feel the number of dot clusters & count, no braille involved.
It's wild to see you downvoted. Only about 10% of blind people know braille. There are many more people who have visual impairments but are not blind. Braille is not a universal solution (though I would rather have it than not have it).
Chiming in to complain that a good, working solution to a problem just doesn't happen to solve ALL PROBLEMS is just banality or perhaps pedantry. Unless it was also proposing an alternative that might do better...
Braille on money also doesn't help dyslexic quadrplegics with dysesthesia... Checkmate.
From dealing with Euro notes, I like being able to look down at the money in the wallet and pull the right notes out based on color. With USD I need to take the bills out of the wallet.
Which is great if you are fully abled! But for folks for whom sight isn't as strong, additional aids (different colors, different sized banknotes for different denominations) are super helpful.
> $1 and $2 coins in wide circulation (instead of worn-out $1 bills).
This has its own pros/cons...
One advantage of $1 bill over coin is the majority of people in US don't need a wallet with zipper to hold coins. Five $1 bills is much less bulky and much lighter than five $1 CAD or five 1€ coins
There are several US states where, by law, retailers are not allowed to give preferential treatment to credit card paying customers over cash paying ones. Which means, in those states, retailers will be required to always round transactions to the cash paying customer's benefit, where in other states the retailer is allowed to round to the nearest 5 cents. This is going to cost large retailers millions.
Interestingly many of them had already put the work into updating the cash register software to allow for this due to the penny shortages during covid.
Let those large retailers put pressure on their suppliers. Prices haven't exactly been stable recently. I really don't think it matters, but if it did (as you claim) then surely some downward pressure is a good thing.
Unfortunately I think this is much easier said than done. No single store is going to want to make this change, because it'll make their prices look higher than the competitors'. It'd require legislation, (and even that'd likely be state-by-state legislation).
It also means a company wouldn't be able to advertise a single price for a product nationwide, since sales tax rates vary by state (and many times even within a state).
Also worth noting that Canada also doesn't include sales taxes.
When we got rid of the half-penny, it was worth more in 2024 cents than the dime is now.
We waited so long past when we should have gotten rid of the penny that now a coin ten times as valuable is also worthless enough that we ought to get rid of it.
So how would you propose paying for something that cost $0.40, or would you just like to see all prices be multiples of 25c?
BTW, the reason for wanting to get rid of the penny isn't so much the low purchasing value, but more that they cost more to make (~4c) than their face value, so the government loses money making them. The same is true of nickels.
The US has too many tax permutations for this to be practicable. Companies would have to make prices a bit higher to accommodate unexpected sales tax increases in some or other jurisdiction.
There's a small industry that specializes in knowing what the sales tax for a particular transaction should be at the moment it goes through.
That would centralize power to the larger taxing authority.
Right now, there's a huge number of elected people in the US who wield real local power through these taxes and other rules that they can make.
It's a headache but we live in the computer age and we can automate administrative things like tax calculation at checkout; we should be using systems to aid decentralization and democratization instead of the opposite.
I was once at a place that had a vending machine that accepted U.S. Currency as well as coupons. I wish I saved one of those coupons and reverse-engineered it and see if it worked on other machines, oh well.
> We eliminated pennies in Canada in 2012 and the transition was a non-issue.
That's because Canada had a plan, thought it through, and rolled it out.
In the US...
“We had a social media post (by Trump) during Super Bowl Sunday, but no real plan for what retailers would have to do,” he said, referring to the president’s February announcement.
We have a deranged old man posting random shit on social media determining federal policy, so of course it's a chaotic shitshow.
Unlike serving as a Republican politician, clowning requires a lot of work and training. It's nothing resembling an unskilled job. Ringling Bros. would do a lot better.
Better is very subjective here. I hate the colorful, plastic, canadian money. It feels toyish, like monopoly money. Whereas USD feels much more nice to deal with.
Copper pennies weigh 3.11 grams. Copper is currently US$10987 per tonne https://www.metal.com/en/prices/LME_CA_3M so a copper penny is worth 3.4¢. This is a surprisingly low number to me; I would have expected it to be closer to 10¢ or 20¢, since presumably it was about 1¢ of copper when it was still copper.
By comparison, a silver dime (90% silver, 10% copper) is 2.268 grams, and silver is US$1486.77/kg https://www.metal.com/en/prices/201102250392, so the dime contains about US$3.03 worth of silver. From the point of view of an 18th- or 19th-century person, for whom the purpose of the mint was to certify the value of the precious metal in the coin by stamping it, the dollar has lost 29/30 (97%) of its value since minting of silver coins ended.
Too early to say "ever", considering there has been no act of congress on this matter and the penny continues to be legal tender. The decision to stop minting it is a (legally debatable) executive order, and the next president or even the current one can change their mind about it tomorrow.
I agree it's time to follow Canada and the rest of the world but it needs to be done through congress, not executive orders. It needs to have a proper framework for migration and laws for how payments are rounded.
I watched a video on the demise of the penny and its predicament was so succinctly explained: everyone gets pennies as change but few carry them around let alone spend them, so we are stuck producing ever more. One news outlet even did an "experiment" where they threw hundreds of pennies on the ground in a city on a busy morning and not one person stopped to pick any up.
> everyone gets pennies as change but few carry them around let alone spend them
It's not just pennies, it's all coins. In a former life I worked in retail and almost nobody would fish around in their pockets for exact (or even near) change. They'd always hand me bills for their purchase even if they had just completed a transaction and had the coins in their pocket. That was in the 90's, and I still see it happening today, even though I'm no longer in the retail world.
Another aspect of the idiotic "we don't know what your tax is going to be" system (they do know it, actually) is that prices will typically end with .99 and the tax will push it over the next dollar and cause a bunch of change to be returned, instead of a single penny.
It's amazing to me that people consider "saving time while paying money" to be a good thing.
I will never "tap" my debit card as long as I have any legal option. Everyone else can wait for me to exercise my consumer rights, by inputting my PIN, verifying the amount displayed on screen etc.
Courtesy may seem outdated to some, but it can occasionally come back to bite people. Being overly rude to waitstaff is something I’m concerned with around promotions because of how they might treat people inside the company. Without better information you extrapolate.
I've seen a pattern where people that value their own time at $0 unfortunately often value the time of others at $0. Worse is valuing others at $0 and your own at $lots (which is also common).
And on the occasions where I can only make (exact change + simple amount), I often get deer-in-headlights looks from cashiers who can't do mental arithmetic and apparently haven't learned how to get the machine to understand payments of more than one physical bill or coin.
Nowadays I pay for everything with my phone but back in the day I too hated using coins.
Having to calculate and fish out coins? Ain't nobody got time for that.
> Having to calculate and fish out coins? Ain't nobody got time for that.
It's not that hard or time consuming if you actually use your change instead of letting it accumulate. I typically have less than a dollar in coins on my person at any given time because I spent it.
If you're paying in cash, you either take time to count the change you're going to spend, or you take time waiting for the cashier to count the change you're going to get. Or you go cashless and avoid the whole thing
Random anecdote: I go to a boulangerie almost daily (as one does here in France). There is one close to me that started charging 12 centimes for slicing the bread. I got annoyed with this and nowadays make a point to take lots of small change from the coin jar and use it. They don't seem to mind.
I remember moving out of a place (decades ago). I was the last roommate out, and so was stuck with some of the cleanup (wanted to get that deposit back!).
One of the things we had was a ton of pennies (no idea why). I had no room in my car, so I spend a few minutes late at night flinging pennies out onto the sidewalk after a long day of cleaning the place.
Would it not have been better/easier for all involved to have just set a container of all the pennies on the street on your way out? If someone really could use them, you're kind of a dick for making them pick them up one at a time, but if they were all together...
>But with 20 million customers a year, and 17% of them paying with cash, the policy will eventually cost Kwik Trip a couple of million dollars a year, McHugh said.
If we figure two-fifths of cash transactions need to be rounded up and the store is losing an average of 1.5 cents each time, their expected losses would be around $2,000, yeah?
> Kwik Trip, a family-owned convenience store chain that operates in the Midwest, decided to round down cash purchases in stores where it hasn’t been able to find pennies.
They're rounding all cash transactions down to the nearest nickel, so an average of 2 cents per transaction, 3.4 million customers, gives me $68,000 assuming each "customer" makes a single transaction per year. If they mean that there are 20 million unique customers, not 20m transactions, then the a long tail of customers who make frequent small transactions in cash could make their claim check out.
Whatever the total ends up being, it's basically a marketing expense that they're electing to make. Probably they do it for a year and then switch to rounding to the nearest nickel, which is what everyone else will be doing.
Without a write off, their income is $X (what they actually collected), with a write off, their income is $Z (what they should have collected) - $Y (what they didn't collect), but $X = $Z - $Y. There's no material difference between counting what they actual collect as income vs what they should have collected minus the goodwill discount. Unless there's some specific tax justification (maybe accounting differences could justify remitting less sales tax overall and retaining more of the funds, etc)
Why wouldn't the write off be useful? I think your formual needs to add "+ ($Y x .3)" for tax deduction if you frame as promotional or other tax write off strategies.
It won't be the same as what they would have collected without rounding, but it will be better than if you didn't write off anything.
20 million customers doesn't mean 20 million transactions. Considering we are talking about a convenience store I'm sure a large chunk of their customers visit every day, some probably multiple times a day.
Assuming 3.4 million customers (cash users) and 2.5 cents average loss per transaction, it would only take one visit a month for them to cross a million dollars in losses.
Of course at that scale it's not like that million or two is really making a difference to their bottom line. Doing some quick Googling their annual revenue is estimated to be $6-7 billion.
They must mean unique customers, not customer transactions.
They have about 878 stores, according to Wikipedia, so if it was transactions, each store would only see about 62 transactions per day, which is way too low.
If we make the maximally pessimistic assumption that every cash transaction would require rounding down four cents, that's 68,000 customers per year times four cents, which is $136,000 per year.
A more reasonable assumption that half of transactions require rounding down cuts that in half, I suppose.
20m customers * 17% * 4 cents * 'x' transactions per customer = $136,000 * x
I suppose this makes some sense. In a worst case situation, if every customer makes 10-20 transactions per year, and they always round down the maximum possible amount, they would lose millions per year.
What's more contemptible: that CNN refused to spend the 30 seconds that it would take to do the math; or that it interviewed a "spokesman" that also didn't spend 30 seconds to do the math, and was sure that nobody would check?
This is the kind of article that should be written by AI (or not written, really.) If you completely fictionalized the empty interviews, nothing would be lost.
Maybe the "spokesman" has been told to angle for a government subsidy for the inconvenience of losing pennies? And from a gas station, which add that goofy fraction of a cent at the end of their pricing.
Like many people, I throw my change into a jar when I get home. One time I only kept pennies and used an old apple cider jug. Turns out that a gallon of pennies is worth almost $55 [0]. And that carrying a heavy glass jug filled with pennies to the Coinstar machine is very anxiety inducing.
Speaking of which - the Coinstar machines near me will give you several options for redemption. Some of which have been Amazon and Home Depot e-gift codes that have no redemption fee.
Gas prices are frequently in fractions of a penny. This never matters because they round. Yep, rounding, in the real world, and the nation has not imploded. As pointed out by others Canada does this already and it's no issue.
I’m old enough to remember being able to scrounge around the house for pennies and heading down to Gracie’s corner store so I could buy some Swedish fish. They were 1 cent each. Gracie counted them out and put them in a small paper bag for you.
A major score was finding a dime or quarter on the street. When the Whatchamacallit first came out they were 25 cents!
Do any other countries have/had “penny squish” souvenir machines? You put in 2 quarters + a penny, and it stamps a design onto the penny. My favorite souvenir, small, cheap, can keep in a booklet, and many landmarks have the machines. There are a few machines that take a $1 bill and use a fresh penny blank internally.
"What are we going to do about the rounding problem?!"
INCLUDE TAX IN THE PRICE, then you won't have a rounding problem!
The common argument against that is "but there are so many tax jurisdictions"
One, Europe has a bunch too and has solved this, and two, it would only apply to in person cash transactions. You should be able to figure out the tax rules for the one specific place the transaction is taking place.
Call me cynical but I don't at all believe the issue is tax jurisdictions or anything related to complexity.
It's that it's easier to show a price of $0.99 and have the consumer pay $1.08 (for example) than either show a price of $1.08 and have the consumer pay it, or show a price of $0.99 and have the consumer pay $0.99 and "lose" 7 cents (because your price was $0.92 before taxes).
Pre-tax price is lower and sells better than post-tax price.
That wouldn't apply if everyone included tax in their prices. In this case, the item would just be $1.10.
If the business really thinks they will lose money by pricing over a dollar, then yes, they would have to take that hit. But they are already taking that hit if the "real value" is $1.02 for example.
It's just a price/demand curve. They would simply have to optimize it differently.
This one suggests it depends on the consumer, with "highly numerate" consumers being less likely to think the price is lower (but presumably also less common in the customer pool):
Edit: searching for "charm pricing" specifically suggests it does work, but I suppose maybe there's some bias on the context in which people use that term.
Ikr? It's like everyone thinks "It is simply not possible to set a price on an item so that its total price is a nice round number after tax is applied! One would need to... invent a special kind of math to do that!"
It's like the whole country is unwilling to calculate 1.065x=$2 or whatever.
And... why not include tax in the display price? I never did get a good explanation for that.
eliminating the penny would require producing more nickels to “fill the gap in small-value transactions.” But nickels suffer from a similar “seigniorage” problem: the 2024 U.S. Mint report said the five-cent coins have a unit cost of 13.78 cents each.
I remember going to the drugstore and buying two pieces of candy for a penny each. I added a third for sales tax. The cashier handed back the penny because the tax didn't kick in until 10 cents.
> When Robert Whaples, an economist at Wake Forest University, published an article in 2006 about the imperative to eliminate America’s 1-cent coin, he received a personal note: “Get it done, and you will deserve the Nobel Prize!”
Our money is being depreciated at a rate of 3% per year and up to 25%-30% during the last inflationary cycle and is now to the point where coins are nearly useless. At the current trajectory, the one dollar note will also be obsolete in our lifetime.
Hmm. I actually still like coins and paper money. However had
in the EU, I don't like the 1 and 2 eurocent at all. These are
just pointless really. I'd like a 5 euro coin and a 2 euro
paper instead.
Can't retailers just price everything to the nearest $.05 to begin with so there is nothing to round? I guess tax percentages screw that up. Nevermind.
Step one: make all items cost an even five cents after tax.
step two: when making price adjustments like discount, round the effect to the nearest five cents.
Step three: charge everyone this amount
Pennies have more zinc in them than they are worth, right?
Did the penny have any sort of stabling force against inflation… a sort of "Zinc Standard" as it were?
Civil libertarians are always talking about how moving away from gold coins, and later moving away from the gold standard that backed the non-gold coins is the root of inflation.
Even so, it has intrinsic value. A gold coin wouldn't become worthless just because the government stopped you from melting it. Same goes for a zinc coin.
Many are reporting this as if failing to mint new pennies each year is going to produce some kind of shortage. There are billions of pennies sitting in drawers or jars in homes across the nation (I certainly have one with about a thousand pennies in it).
I doubt anyone who needs a penny will be unable to find one within the next 100 years.
There's a cash-heavy business I work with that's already having a hard time sourcing the pennies they need. I guess they're all in a jar under your desk.
It seems to me that if there was truly a shortage of pennies, banks could offer to pay 2 cents for every penny someone turned in (still far cheaper than minting a new one) and enough people would pull out their penny jars and cash them in.
Now we've unlocked a new lucrative business model where we can cut the customer out entirely! Simply buy pennies from the bank on the dollar and sell them back for 100% profit...
I have a hard time believing any business relies on access to Pennies when all cash transactions can be rounded to a nickel in some way amenable to both parties. I imagine most customers just don’t give a damn.
> I doubt anyone who needs a penny will be unable to find one within the next 100 years.
Based on my experience with the universe, this ability of being able to find something whenever you need it, only happens until you start expecting it and when you really need it, you're not gonna be able to find it anywhere. Maybe "Murphy's law" isn't what I'm looking for but something similar? For when what you really need is no longer there, universe always works against you? Can't recall.
Setting prices to avoid the need for pennies is probably technically challenging given the combination of requirements to post prices and sales taxes that don't always round the same way.
If the effective tax rate is 7.432%, you can price single items so that the price plus tax ends up in a multiple of $0.05, but if you get a purchase with multiple items, you either need to round somewhere or post prices that are like $9.346263437.
For example, $0.93 * 1.07432 = is $0.9991176 exactly, which rounds to $1.00. But if you buy a dozen such items then $0.93 * 12 * 1.07432 = $11.9894112 exactly, which rounds to $11.99.
Imagine a world where they just posted the price you would pay at the register on the shelf instead of some number that is ~93.082% of the price you would pay.
I know it's hard to imagine the price on the shelf being the price that you pay, but I believe it is possible even in complex tax situations.
I live where there is no sales tax, so it's not hard to imagine!
But good luck convincing every state, county, municipality, and other weird governing body that requires something other than that and also collects a weird sales tax.
Or go with the solution that papers over all that nonsense: a flexible and maximum $0.04 per purchase discount.
What if businesses issues their own penny coupons that could be used in future purchases? If you bought from there regularly you'd on average only have a couple of them.
I mean it's not on the state, county, municipality, or weird governing body to put the prices on the shelf at the store. Nation wide advertising might be different (is that still a thing? There were always asterisks that made a dollar menu not always a dollar anyway), but the literal price on the shelf / menu / ... at any given physical building could price things appropriately for the physical location that they are on.
I live in a place with a fixed VAT (that is included in the price on the shelf / menu / ...), but grew up in the US in several different weirdly taxed localities. It's just such a silly argument to say "we can't write the correct price on the shelf because the laws vary." The register knows the correct price, the labels on the shelf are computer generated, and updated regularly. The labels at many nation wide fast food type places are displays anyway.
If Baarle-Hertog and Baarle-Nassau can make it work I feel like it's at least imaginable that stores that already automate this weird complex tax code could print accurate labels instead of inaccurate labels, with an accurate calculation at sales time.
Sales tax varies by state/county/city. It is generally not cost-effective to have each individual store label all their products with local sales taxes applied.
I see this excuse all the time, but why not? This calculation does not need to happen more often than the product prices are adjusted. There's no difference in effort between labeling something "$5.52+tax" and labeling it "$6".
The difference is where the product is labeled. Is it labeled nationally like Arizona Iced Tea? Is it labeled at a regional bottling facility? Or is it labeled at the store itself? And what about when tax rates change, you gonna go pull all the labels off everything in the whole store and update them?
Most of this could be resolved by not putting the prices on the products themselves, but that isn't as good of an experience for the shopper.
> Most of this could be resolved by not putting the prices on the products themselves
That is already often the case. Prices are usually on the shelves not on the product itself at many stores. And when purchasing online there is no reason that the sales tax couldn't be included in the listed price.
Also sellers could just charge the same price everywhere and take the sales tax out of the revenue.
If someone is buying a banana for resale, or buying with WIC or SNAP benefits (among other things), they would not owe sales tax. So if the price included sales tax, the sticker price would not be the final price.
You do not know the final price until you know how they are paying for it, what they are using it for, and when they are buying it (among other things).
Falsehoods programmers believe about sales tax (among other things).
It isn't that simple. There are stacked tax jurisdictions that can change their fraction of the tax independently. Some of those taxes are conditional at point-of-sale so the exact rate varies from customer to customer.
It is a mess but also not easy to unwind or patch over.
Russia eliminated all kopeck coins years ago and anyone hardly noticed. Seemingly the only place you could still see any is a bank. Retailers usually round down to whole rubles if you're paying in cash.
It's been useless baggage for decades. The even saner approach would be to fade-out an order of magnitude of currency every century. The math checks out.
As much as there's a lot of reasonable arguments for ending the minting of the penny, the method in which this president waves his hands and fundamentally changes things such as our White House, our currency, our trade policies, our universities leaves me with a bad taste in my mouth and it's hard to support even sensible decisions this authoritarian regime makes.
This is a very minor but pleasant surprise. An action like this is beyond what I thought the US government (my government, sadly) was capable of. It is kind of puzzling to me that this issue, like every other one, didn't get politicized, with right wing talking heads bemoaning progress of any sort, appealing to the good old days, when America was great, the days that MAGAs want to return to.
The fact that you'd need to even mint them in 2025 is mind boggling. Why isn't there a law that stops minting coins that cost more than their values? You'd think they would have figured this out by now?
The argument that we should stop minting them because they cost more to produce than their face value falls flat for me.
A penny is not a single use item. The cost of production must be depreciated across the thousands of transactions in which it is used and then compared to the economic benefit of its existence.
It may be true that the economic benefit of a penny is less than the production cost but I don’t see anyone making that case.
What will it actually cost the US economy to stop minting these coins?
How long will they remain in circulation until they are no longer accepted for payment?
I'm now seeing signs in stores begging people for exact change due to a "penny shortage"
Seriously? You can't give up 4 cents per transaction to round to a nickel? Fuck, round it up for all I care, 5 cents is worth approximately nothing today.
That seems weird. I mean, if you decide to abolish the penny, you just do it cold turkey. You don't set a date in the future and the continue making them, so that the last penny is accompanied by fanfare.
> Trump announced via social media in February that he instructed the Mint to stop making the once-popular coin, citing the cost of production.
So between February and today, they just ignored the order?
What justified the pennies produced between February and November? Those pennies were necessary, and still cost-effective, but going forward, the penny as such is no longer necessary?
> the final coins pressed will be auctioned off and that the actual last pennies put into circulation from the US Mint were struck in June.
Seems like this is a stunt to extract a bit of money from collectors. I kind of wonder if collectors really value coins/stamps/etc. that were specially made to target the collector market and didn't even exist in the natural world. Feels icky.
Ha, didn't expect to see a comment about Mullen on HN. Saw him live in Boston a few months ago. Very cool to see the C-Town boys blowing up in popularity.
It's not that keeping the penny around is (necessarily) a good idea, but that there are, you know, laws, and people (including the President and cabinet folks) should kind of follow those laws. So has the law been amended to not require the minting of the penny anymore?
Is there some 'new interpretation' that has been 'found' that allows Sec. Treasury to not mint pennies? Or is this change one made by fiat / executive order?
> Ensure rounding for cash customers does not violate terms of the Supplemental Nutrition Assistance Program (SNAP). The SNAP program sensibly requires that SNAP customers cannot be treated differently than other customers.2 These provisions prohibit treating SNAP customers less favorably or more favorably than other customers. That means that rounding the price of food for a cash customer in either direction risks creating a violation of SNAP regulations for stores that participate in the SNAP program.
My understanding from something I read months ago - its a new interpretation. Specifically the law instructs the gov to make as many pennies as is necessary, but does not define what that is or how to calculate it. If the government deems necessary = 0, then you dont need to make any more.
Since the law is still on the books its still legal tender, and production may restart at any moment.
to my knowledge the legislation only says that the executive branch needs to make the "necessary" amount of pennies. the argument is that because they're losing money literally printing money that the "necessary" amount is zero and that therefore doing this follows the law because zero is an amount.
A better measure, assuming that pennies facilitate value exchange[1], would be whether the cost to mint a penny exceeded the marginal increase in GDP[2] due to having that additional penny available.
[1]: This assumption may not be true; if they're worth so little that people lose track of them, they could actually make it harder to exchange value.
[2]: Making the GDP higher is also a very debatable measure, but I think this generalizes to other dollar-denominated measures of prosperity.
A penny is reused over and over again, every time it changes hands. It’s not necessarily bad that it costs a few cents to make one if it has utility.
It costs more to make a ceramic mug than it does to fill it with coffee. That doesn’t make a ceramic mug uneconomical, because it’s used lots of times and the cost amortizes.
...Having said that, I don’t think there’s actually much value to having an individual token of exchange that signifies as little value as a penny does - it would be a good idea to stop making them even if they cost far less to make than they do.
Yes. I used to work at a movie theater, where all transactions were to the nearest $0.25 because it made it easier for the kids like me behind the counter to count the change and not lose track... seemed sensible at the time and that was 20 years ago.
Honestly nickels and dimes, and maybe even quarters, should go too. It's ridiculous that we don't have $1 and $2 coins in widespread circulation in the US (we have a $1 coin but nobody uses it).
Quarters might be premature, but the half-cent was discontinued when it was worth a (modern equivalent) of $0.12-17. Even 20-30 years ago, when I was just starting to interact with money enough to have an opinion, I thought it was a hassle to deal with anything smaller than a quarter. The same logic behind getting rid of pennies (they cost more to make than the face value) also supports doing at least nickels.
> The same logic behind getting rid of pennies (they cost more to make than the face value)
I've honestly never understood why this is a valid reason to object to the coin. Coins aren't used only once, so that they cost most to make than their face value doesn't seem very important, unless the differential is much, much larger than it actually is.
I get what you mean, but the Mint does "sell" currency in a sense, so it's not a terrible point to make. It also serves as a decent benchmark for the "should we even bother" aspect; should we lose money by literally making money?
We also have a $2 bill that nobody uses for whatever reason.
I never understood the objections to the $1 coin, especially after the redesign to make it more distinct from a quarter. $1 coins are great for buying stuff out of vending machines since you don't have to fight with a dodgy bill acceptor or a mangled bill.
My only real objection I guess, and the reason I don't carry change of any sort, is because it's constantly falling out of my pockets. I'm rather tall, so many seating positions put my knees higher than my waist, which I think contributes to that.
Further, since I don't have enough pockets to have a dedicated change pocket, it's always getting caught up in my keys and/or pocket knife.
Nobody really gave us training on this stuff, do other countries use a coin purse or some such?
Lastly, they're just comparatively heavy.
I just carry cash around in either a clip or a "front pocket wallet" I think they're called, and it seems more convenient all around.
Yeah. My proposal would be to have 10 cent, 50 cent, and $1 coins (rounding everything to the nearest 10 cents), with $2 the smallest bill. And probably you could drop the $5 bill at that point.
There's a lot of physical infrastructure that works with quarters, and it's probably not worth giving that up for slightly improved coinage. Just drop all the coins smaller than a quarter.
There's also the 3rd amendment. It would be worthless to say soldiers can't demand change for the vending machine, when nobody at all can get quarters.
> But I've never found a retailer willing to give a $2 bill as change.
Mostly retailers don't stock $2 bills (because they're weird), so if a customer brings a $2, the cashier will put it in their their exceptional bills area, which usually is just large bills. No change is made with exceptional bills, so twos don't get recirculated.
Dispensaries in OR/WA love $2 bills, for some chains they're as unremarkable as a $1 and must special request them in bulk to keep on hand for making change.
Sorry Europe and Canada, $1 and $2 coins are just absolutely terrible. I never want to have to think about where my change is. Bills are much lighter than coins and stack with the rest of the bills.
When I was in Japan everything was all-cash and the smallest bill was the equivalent of a $10, with equivalents to $1 and $5 coins being in common circulation. Most wallets they sold/people had had a coin pocket to account for this.
Nickels and dimes certainly have predecent. When the US killed the half-penny in 1857, it had a purchasing power of somewhere around 19 cents from 2024.
Honestly I'd rather just not have coins at that point, rather than try to push $1 and $2 coins. Then I can just carry my wallet for bills and not have to worry about keeping track of coins separately.
Gotta do something to make the $2 bill popular though, no idea how.
I'd mourn the loss of the quarter. I use those quite often.
> (we have a $1 coin but nobody uses it)
Because they keep designing it in the stupidest way, making it easy to confuse with a quarter. I don't know why they do that.
That said, I do prefer paper $1 bills over coins. Paper is lighter and easier to carry. But I'd only slightly grumble if we replaced it with a reasonable coin.
If you have vision problems, US currency is totally unfriendly to you. Unlike other countries, which have bills of different sizes, all the US currency bills are the same size, so getting change as a blind person is basically relying on the honesty of whoever is behind the counter.
That's why the dollar coin was redesigned in 2000. The old dollar coin had a reeded edge that was too similar to a quarter, so it was sometimes hard to distinguish if you had vision issues (or if you didn't have vision issues because they were about the same size as a quarter). The new ones have a smooth edge so you can tell them apart from quarters without having to look at them
True, and the new design is better than the old because of it. But it hasn't resolved the issue enough to really matter. Some less subtle physical difference is required -- put a hole in it, make it an obviously unique size, whatever.
At least that's how it seems to me. It's an interesting design issue. I don't personally care too much -- I'm fine with the paper bill -- but I do have curiosity about why the coin designers have made the decisions they did about the $1 coin.
Yeah, since I often buy things with cash in places that are so dark I can't see the coins that's a major consideration for me. JFC what planet do you live on?
I'm a little worried this will encourage vendors to increases prices up to the next 5 cent mark, which will cause inflation that we really don't need more of right now.
It doesn’t require it. There may still be (I dunno) fixed per-gallon taxes in the tenth-penny-per-gallon range, but stations aren’t forced to handle it the way they do.
In Canada, most prices still end in 99. You still pay to the cent if you're paying with a debit or credit card, which the vast majority of customers are these days.
Many countries eliminated their pennies without chaos or unfair burdens on shopkeepers. In Canada, the process was widely popular after the fact even though newspaper articles prior to the elimination intimated it wouldn't be due to their "both sides" style of reporting.
It's indicative of the current US administration that they managed to screw this up despite many examples world wide of how to do it properly.
It costs on average 2 cents because without legislative authority to round to closest the retailer must round down and eat up to 4 cents of difference.
Cash costs retailers money too. Safely transporting it to the bank, et cetera. For many, cash is more expensive than credit cards.
If you believe this is going to cause chaos or significant burdens on merchants I have got a bridge to sell you (but I don't take pennies). This quote tells you all you need to know.
> The government’s phasing out of the penny has been “a bit chaotic,” said Mark Weller, executive director of Americans for Common Cents. The pro-penny group is funded primarily by Artazn, the company that provides the blanks used to make pennies.
The same thing happened many years ago with the same company (previously called Jarden Zinc).
> Americans for Common Cents is a non-profit lobbying group dedicated to the protection of the one-cent coin. The group is primarily interested in preserving the penny for economic and historical reasons. In 2012, Executive Director Mark Weller was paid $340,000 by Jarden Zinc to discuss issues relating to minting with members of Congress and the US Mint.[41] Weller has acknowledged this funding, saying that “We make no secret that one of our major sponsors is a company that makes the zinc ‘blanks’ for pennies."[42] Weller has testified on multiple occasions before Congress. In 2020 Weller testified that the use of cash protects privacy, provides economic stability and "is a public good" that should not be replaced by mobile money.[43]
> even though newspaper articles prior to the elimination intimated it wouldn't be due to their "both sides" style of reporting.
No idea what you're talking about here. This isn't a left-vs-right issue, and journalism gave the concerns approximately the attention they merited.
> It's indicative of the current US administration that they managed to screw this up despite many examples world wide of how to do it properly.
No, it's indicative of problems uniquely caused by existing American governance and law. When we did it, we didn't have an issue analogous to the one with SNAP payments described throughout the thread, because our welfare programs don't work that way and our legal code isn't designed to enable the same kind of future pedantry. Besides which, the Biden and Obama administrations (and others before them) didn't even attempt this as far as I'm aware, despite that the US penny being costly for quite some time. (As far as I can tell, the current cost is mostly not due to the cost of the base metal, which is almost all zinc since 1982. Checking commodity prices and doing some back of the envelope math, switching back to copper would cost them an additional two cents per penny.)
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.
If the law is slow to change or there are no available pennies, the stores can adjust the prices to match the expected rounding of prices. I can't imagine someone being prosecuted from rounding a penny but it's a quick and easy way to avoid any doubt.
> I can't imagine someone being prosecuted from rounding a penny
Under this executive, I wouldn't be so sure. If a grocery chain starts deviating from the law, then the government can use it against them to further a political agenda like we've seen with Eric Adams for example.
The easy thing for stores to do then seems to be apply the cash rounding to EBT and card transactions.
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?
So, implement sales tax like Europe does VAT and include it in on the shelf price, and make sure all shelf prices end in 0 or 5. Then, adding up items in a cart will also end in 0 or 5, and the tax is already included, so there is no math beyond the addition that could change the total to anything ending in something that is not 0 or 5. No matter how people pay, cash or card, the price will be the same, and it will always end in 0 or 5. As an added bonus, customers don't have to wonder how much tax they'll pay, because that's already included in the price.
Is gas sold as a whole penny amounts in those locations? Where I am it's always something and 9/10ths of a cent.
Allowing gas stations to denominate their prices by the 10th of a cent has always struck me as a just an underhanded and extreme way to practice the "9.99" retail psychological trick. Why not allow retailers to price things 9.99999? Ridiculous.
It's because technically the dollar is divided into Dimes, Cents, and Mil. (this is why dimes say 'One Dime' on them instead of 'Ten Cents'.
So while the mil isn't really used anywhere else that regular people see any more due to inflation, it is a valid division of the dollar and that's why they are able to get away with it.
Has a Mil ever been minted?
So do whatever they do with mils but for the penny too. They don’t nor have they ever minted a mil coin, so the procedure for this is already well established if this is correct.
Turns out the station charges you a round number of cents per gallon. Then there are federal taxes, which are, IIRC, 24.5 cents per gallon. And then there's state tax, which varies from state to state but seems to always be x.4 cents per gallon.
So I don't think it's just "evil retailer tricks".
of course 9.99...(repeating) is mathematically 10, so I have a hard time being against allowing that.
The amount is only rounded at the end of the transaction. Those fractions make a difference if you're buying more than a few gallons
Here in Argentina the law says they must be rounded down. Initially it was for 5 AR$cents, and some shops still has the oficial sign that says AR$ 0.05.
We unofficially drop the coins/bills when the reach ~US$0.03, so now we dropped the AR$50 bills and everythig in cash is rounded down to AR$100 (US$0.07).
(The only exception is the photocopy shop 2 blocks away from home.)
Credit cards are charged the exact ammount, with cents that are irrelevant.
If the national government literally stops creating a certain precision of money, i expect the "exact change" requirement should be invalid.
You volunteering your business to be the the test legal case for that? Or are you stocking pennies?
“change will be provided via Venmo” sign at the entrance :)
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.
Congress seems like the most dysfunctional branch of government going on a couple decades now.
They poll worse than the most unpopular presidents
So, round down debit cards too? This seems like a really easy problem to solve.
They're all easily solvable problems. The issue, as GP mentioned, is that the pennies are just stopping without the thought through these problems and planning for the solutions. This was done via a social media post, not a well thought out transition like Canada had.
> The issue, as GP mentioned, is that the pennies are just stopping without the thought through these problems and planning for the solutions.
That's not an "issue". That's the way things that actually happen, happen.
If they're easily solvable then why do you need planning?
Changing the currency on a whim by executive fiat is stupid, but that's just principle. In practical terms, I really have a hard time caring about the problems this specific change creates.
> If they're easily solvable then why do you need planning?
Easily solvable problems still need coordination. Do you want to go to one store and have your change rounded up then go to another and have it rounded down?
Sure, who cares? This could already be happening today with rounding fractional pennies. I have no clue if stores round up, or down, or split at .5, or what. But obviously they're doing something, since there aren't physical fractional pennies and my card statements never show more than two decimal digits, so it's not a new problem. This would make the problem five times worse, but five times insignificant is still not something I'm going to worry about.
SNAP is a major source of revenue for grocers so it seems like you wouldn't have to prod them very hard to do that.
Charges take into account severity of the crime and intent. Nobody is going to get criminal charges for rounding pennies on cash transactions.
Ok— Walmart decides to do something the government doesn’t like re:tariffs or whatnot. They can either plead fealty and retract their decision or the C-Suite can defend themselves against conspiracy to commit a zillion misdemeanors an hour…
Sure, on paper. In reality bored fedcops trying to justify their budgets is how you get plenty of unjustifiable suffering.
The secret service probably won't cause a Waco out of it, but I'm sure they'll do something dumb.
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?
No, because the law applies to individual transactions, not averages.
Does the law say the average price must be the same, or does it say the price must be the same?
Reality: the supermarket does it the common sense way, and never gets sued, but if they do get sued, the outcome is "you must now refund 2 cents from every SNAP transaction you ever did"
Very unlikely that would happen. The way similar issues have been dealt with in the past is that settlement is negotiated to something "reasonable" (at least arguably so) and administrable. Probably the settlement amount would just go to a fund that the state would then distribute according to its priorities.
It's probably the case that the real risk is being suspended from SNAP for failing to comply with their rules.
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.
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
There's no reason you can't have 400 degrees in a circle and therefore 100 for a right angle.
It's a degree scale: you can choose any number you want.
Indeed, gradiens are a scale where a circle is divided into 400 equal parts. Really fucked me up a few times when I got a new calculator and wasn’t paying attention to what the little “grad” meant.
But I can't subdivide 400 in to as many ways as 360. Think about the pie industry. They could be put out of business!!
Of course that's true, that doesn't mean you should.
Some pocket calculators from not too long ago supported this unit for some reason, along with radians and degrees. That's the third option on "DRG" button.
The Indiana pi bill mandated certain mathematical values be changed to the wrong value.
https://en.wikipedia.org/wiki/Indiana_pi_bill
“The bill, written by a physician and an amateur mathematician, never became law.”
Whenever I'm late to a meeting I blame it on the french revolutionary calendar.
> 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.
It used to be that they gave you the choice. You could round or you could use pennies but you had to be consistent throughout the return, because even the IRS doesn’t care if you manage to scrape out 49 cents.
Has that changed and it has to be dollars now?
>> 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.
I'm not really sure about "He said it was to reduce [...] criminals having to store it". Storage shouldn't be a huge problem - IIRC you can pack about a hundred million onto a standard pallet. Even for Escobar, who is THE outlier here, and assuming he's holding 100% of it in cash, that's about 300 pallets which easily fits into a normal warehouse. If you've got that much money it shouldn't be impossible to keep a warehouse like that clean and dry.
Now, "illicit activity" more broadly speaking checks out to me. The EU stopped printing the 500 euro note because it was primarily used for illegal transactions and money laundering.
When the $1000 bill was retired, a loaf of bread cost a couple cents. There was indeed a push to purge them during the drug scares of the late 20th century. A suitcase of $1000 bills is far sexier than one of $100 bills. It really was porting them.
With bitcoin, it's moot.
A $100 is basically a tank of gas and a sandwich in CA.
In 1934 the dollar was worth approximately 24x more than in 2025. A cheap loaf of bread is about $2 here in NYC, so it would be about 8¢ at the time.
On one hand, the difference between 2¢ and 8¢ looks completely inconsequential now. OTOH it's a four-fold difference.
The 500-euro bill is being phased out for similar reasons. Though it's worth noting a 100-dollar bill was worth more than twice what it is today when Pablo Escobar died.
> rats chewing up the money
Profit for the US government. Fixed by plastic bills.
Every $ printed but never redeemed is a significant profit (assuming other costs are low like printing).
Especially yummy when countries just want to hoard the currency - same as selling stamps that are never used:
https://www.federalreserve.gov/pubs/ifdp/1993/460/ifdp460.pd...I'm pretty sure the OP was talking about a far future where a $100 bill is worth less than the current penny
Though I think the parent means, eventually in the (hopefully) distant future, we'll get rid of the $100 bill because it will be worth too little.
Exactly. Like with the Zimbabwe dollars being printed in billion-dollar denominations, $100 is irrelevant then
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.
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).
> 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.
Problem is it isn't just the $5.99 rounds to $6.00 it is tax. If the end cost is $6.36 will the state be happy with that one penny less? For any state 1 penny per transaction is millions of dollars per year! (note that I had to change your price from 4.99 to 5.99 - 5.00 times any tax rate is an even multiple of 5 and so cannot make the point).
They can add a "total not divisible by 5" fee, ranging from 1 to 4 cents
The other direction avoids a lot of stupid complains. Nobody will complain if the shop gives them a $0.04 gift.
Er... So just adjust prices to whole multiples of 5 cents? Helps math-challenged cashiers too...
Prices in the US are not tax-inclusive, so the effect of sales tax ruins that plan.
And sales tax varies a loooooot, and change constantly
There's 12000+ distinct sales tax regimes in the US
https://sovos.com/content-library/sut/state-by-state-guide-t...
Individual stores generally only have to deal with one. Set the prices at the store, and make them tax-inclusive while you're at it. This isn't rocket science.
Companies serve billions of web pages per second. We can't handle 12,000 tax calculations?
If only it were that simple. Some sales taxes are conditional at the point-of-sale. Different customers may pay a different tax rate. This creates a situation where the display price will be incorrect part of the time and may not round to 5c or whatever the legal quantum is.
I wonder if this could encourage retailers to start advertising tax-inclusive prices. That way there's no rounding in the customer transaction (if they set all their tax-inclusive pricing at multiples of 5 cents), and then the sales tax would just be calculated in aggregate, and paid electronically with no rounding.
That’s illegal in a lot of places.
Advertising the tax-included price is illegal? Where?
(No snark - serious question, as I'm not from the US, and would love to see the legislation and justification which required that...)
So they just make the price with tax a multiple of 5 cent and still show the price without.
Is the tax unknown at the time of setting the price? If that's the problem, set the final price at price + tax, deduce tax, display that. What's the matter?
I doubt that most people in the US know the local sales tax. Let alone any change that may occur due to laws changing or traveling. I'd like to see the out the door price listed but that throws the 99 cent game off retailers like. Also I don't shop very often but Aldi US is the only place I've seen the eink price displays, the rest still have paper.
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...
we should have converted everything to integers.
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.
I don't get it. Why couldn't a cashier pocket $1.99?
Because they were handed $2 and have to get the change out of the register.
Ok, but if the cashier is stealing they could just have change in their pocket?
I'm skeptical that preventing theft is the reason for these prices rather than the psychological trick of looking cheaper.
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.
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
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.
> 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.
This. A large chunk of the US population has been programmed that ALL CHANGE from when they were children in the 1950s is bad.
thats a strawman argument
> 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.
Since I'm already doing armchair stuff I'll just say that there's an argument to be made that consumer electronics HAVE to be cheaper due to the extremely inflated cost of essentials right now, which is the result of lack of regulation. It's not the system regulating itself it's just more bottom line chasing.
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.
> They don't know how many things anyone is going to buy.
They have historical data, so they know on average people buy 5 things, and they will have data on what impact on purchasing behavior the changes have. Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
> Most likely they will tune for increased volume as people spend more to avoid losing a couple of cents.
Why would they ever tune for that? “Uh oh, turns out customers are intentionally spending more money!”
I don’t understand how this same train of thought comes up every time eliminating pennies is raised. This whole train of thought collapses if you consider the scope we’re talking about (literally a couple of cents max per transaction) and how stores actually behave today. Stores are happy to drop a couple of pennies to make prices look better. But in this hypothetical world stores are going to calculate the optimal prices to round in a way that rips off customers for a couple of cents. This makes no sense. They give up a penny on nearly every item today for the sake of “pretty” prices.
Edit: Oh, I see you’re arguing that they would tune to encourage spending up to “save” the couple of cents, rather than retuning in response to the hypothetical increased spending. No doubt they would like to do this. I doubt they actually would because this is not trivial and it would require ruining the pretty prices.
If there is no rounding down, it could amount to more.
Hypothetically if you incur 10,000 transactions per year with the max rounding up of $0.04 per transaction, you're out $400.
This doesn't make a huge impact to individuals, but it absolutely will to large volume businesses.
For large volume businesses, $400 / year is what we usually call.. a rounding error.
A large volume business isn't doing 10k transactions.
You’re arguing about nonsense scenarios. Hypothetically every business could also tack a “convenience fee” of $20 on every purchase like TicketMaster and make 200k off this imaginary customer.
Also even if a business rounded up every transaction, the expected benefit is 2 cents per transaction vs fair rounding, not 4 cents.
But there would be rounding down, so how is this relevant?
What's even to say anything will be rounded down? If Walmart says "we're going to round anything from $0.01 to $0.04 up to $0.05," do you think the free market would put them out of business out of principle, or would they get away with it? I think they'd get away with it.
Nobody has to round down. There's no government rule.
I would expect many businesses to implement ceil()-flavored rounding.
> 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.
"In cash" is entirely separate from the rounding debate and is just the "people use cards, anyway" argument. It's not relevant to this discussion. This discussion is about cash. I do buy single items at stores sometimes.
> 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.
Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
> Where's the law preventing stores from imposing an accounting fee for multi-item purchases, conveniently totaling a few cents?
Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
> Where’s the law preventing someone from doing this right now? I don’t think this cynicism is justified.
You don't think businesses take advantage of situations for more profit?
Take this year's tariffs as an example. As you may've heard, UPS is charging customs brokerage fees of dozens or hundreds of dollars on top of the actual tariff payment; identical shipments sent via FedEx or DHL are only charged a few dollars for the service of customs brokerage, so we know UPS's actual costs for providing that service aren't that high. They saw a situation where consumers would be confused about prices and took advantage of it to make a lot more money by simply charging a lot more than they need to.
"But where's the law saying they couldn't have just raised their prices by hundreds of dollars without tariffs? Where's the law?!" There wasn't one, they could've raised their prices for international shipments before the tariffs happened. But consumers would have noticed a lot more and accepted it a lot less. They took advantage of the situation because the situation allowed them to get away with it.
> Similarly, if places are willing to price stuff at $1.03 for the few extra cents they’ll collect some of the time, then they can just raise prices on 99c items right now to $1 to collect the extra cent, which they don’t do because such prices have a psychological effect on the consumer that outweighs the small gain.
I'm not sure what you're arguing here. You admitted the $0.99 number has a psychological effect that outweighs the $0.01 gain of charging the extra cent. That would be the reason they don't do that. It's not super relevant to the discussion of whether rounding can/will be gamed.
>You don't think businesses take advantage of situations for more profit?
That's not the point. Businesses are obviously happy to raise prices under the confusion of other changes, but I find it very hard to believe "accounting fees" are a plausible way to do so. People know that the register machine can do the calculations easily - it already does so. And there is a good reason for businesses not to introduce such fees, because they are directly visible to the consumer who is going to complain and shop elsewhere.
The UPS example is apples to oranges. Tariffs are poorly understood, and consumers rarely shop around for shipping - they tend to take the service given by the merchant. The agency people will show on 2 random cents on every shop is way higher.
>It's not super relevant to the discussion of whether rounding can/will be gamed.
It's very relevant. How are consumers going to react to a price like $1.03? Especially since that's almost certainly something that would previously have been priced at $1.
> UPS is charging customs brokerage fees of dozens or hundreds of dollars on top of the actual tariff payment
To reinforce this point... UPS just does this all the time. I had to have a number of personal effects[1] shipped up from the US to Canada that I requested self-declaration forms for them and never received them - UPS decided to brokerage the shipment themselves. We then spent the next three months fighting a six hundred dollar charge[2] that should have never existed.
UPS is going to defraud customers on brokerage fees regardless of the scenario - it's just what UPS does. You've got bigger problems to worry about - the impact of dropping the penny will be unnoticeable in the sea of general corruption and fraud.
1. Items that you own in one country and are shipping to Canada for personal possession are exempt from most normal tariffs.
2. To really add icing to outrage - this was more than double the original shipping price and, considering we delivered an itemization with the shipment for customs UPS could calculate their BS fee upfront and show the actual cost to the customer but they don't because the US doesn't force them to.
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?
Americans like to pretend that history and the experience of the rest of the world doesn't exist and that things that large numbers of other countries have done successfully (and which even the US has done in the past, in this case, as the half-penny, after all, was phase out a long time ago) are impossible to do successfully.
Sales taxes as they are known in the US were largely introduced in the 20th century. The half-penny was phased out in the mid-19th century.
The legal structure of sales taxes in the US present some unique challenges that simply don't exist as problems that needed to be solved in other countries. These problems can't be legislated away because the authority to do so is highly decentralized. Pretending that these problems don't exist because they don't exist elsewhere is not helpful.
This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
> Pretending that these problems don't exist because they don't exist elsewhere is not helpful.
Pretend that’s everything in the US is globally unique to us also is not helpful. “No one else has sales tax like us” is likely not true but also not super relevant. Tax collecting agencies in 50 states and however many territories could issue guidance tomorrow for how to deal with this and it would have the force of law until/unless legislatures see fit to define different rules.
> for every complex problem there is a solution that is simple, obvious, and wrong.
Sure, but for every simple problem there is a small army of people online pretending it’s insurmountable.
The tax authorities cannot unilaterally change the law with "guidance".
It is explicitly written into statute in many cases, requiring legislative action across thousands of independent tax authorities. Complicating it more is that in some cases a change must satisfy constitutional requirements which are even harder to change.
Everything is easy if you pretend that you can change things by authoritarian fiat instead of abiding by existing statutory and constitutional restrictions. The courts would never allow it.
> The tax authorities cannot unilaterally change the law with "guidance".
The standard model for regulation is generally that the law empowers some agency to clear up any ambiguities.
Doubtful that any state has legislation on how to handle taxation if pennies are unavailable so a state tax body issuing reasonable guidance is a very believable outcome.
> It is explicitly written into statute in many cases, requiring legislative action across thousands of independent tax authorities. Complicating it more is that in some cases a change must satisfy constitutional requirements which are even harder to change.
Show me the legislation that says “taxes must be collected to the penny based on the posted price without rounding”.
What are these “thousands of independent tax authorities” anyway? Are you under the impression that every city and county needs to agree change the tax law? State law trumps local laws. Washington State doesn’t need Seattle to agree with laws specifying new rounding rules.
> Everything is easy if you pretend that you can change things by authoritarian fiat instead of abiding by existing statutory and constitutional restrictions. The courts would never allow it.
Have you not been around for the last 10 months?
But also the courts tend to be fairly reasonable. Faced with conflicting requirements they generally don’t say “fuck it you’re all going to jail” but direct legislatures to fix the issue. No way we end up in a situation where pennies are unavailable and the courts tell stores that they have to shut down or stop accepting cash entirely because there isn’t a legislatively specified way to round transactions to the nickel.
Unless I’m missing something, existing pennies are also not being removed from circulation, so none of this seems to be a major issue yet. Legislatures could do their jobs and clear this up quickly of they choose to.
>The legal structure of sales taxes in the US present some unique challenges
Nothing about sales tax in the US is unique at all. It is not special. It is not hard. It is not a complex problem. It is basically a lookup, and computerized POS systems have managed it just fine since the dawn of computerized POS systems.
In fact, when those sales taxes were first implemented, there was problems relating to how to manage sales that resulted in fractions of a cent worth of sales tax to account for. Several states created sales tax tokens worth fractions of a cent and had to insist that it didn't technically count as money because states can't mint money legally.
https://en.wikipedia.org/wiki/Sales_tax_token
Nobody went to jail. It was a minor nuisance for consumers and was quickly replaced with law changes to just have explicit rules for the edge case, which is the entire reason we have legislatures. If you don't want retailers to respond to this change in a certain way, have your legislatures say that.
>This is very much a case of the Mencken quote that for every complex problem there is a solution that is simple, obvious, and wrong.
Just stop already. The US is not special. The US regularly insists it cannot do the same things everyone else does and it is just wrong. We literally have textbooks full of examples from our own country. We've already phased out coinage before.
The UK went from it's absurd money system to reasonable and decimalized money within living memory! 15 February 1971. Sweden had a day where they switched from left hand roads to right hand roads! https://en.wikipedia.org/wiki/Dagen_H Most of Europe switched to Euros in living memory as well!
Stop insisting reasonable societal problems are too hard to solve, because that's the only actual reason they are hard to solve
>These problems can't be legislated away because the authority to do so is highly decentralized.
It isn't at all. It's in the Federal government, and it's in your local state government, and it's in your local-er governments, and that is just like a lot of other countries. A couple layers isn't "very decentralized".
It is only in the past 50 or so years that a singular political party has insisted that the same political party that did all sorts of speedy and useful lawmaking for a hundred years suddenly cannot adapt quickly. Meanwhile, 48 state governments continue to function mostly fine, with few problems adapting to local specific problems in a timely manner. If your state cannot adapt to this quickly and easily and without serious issues, consider electing different people.
Can you explain further? Canada has sales tax and successfully phased out the penny.
Sales taxes in the US are truly and insanely decentralized.
The US has thousands of independent sales tax authorities with their own laws and regulations about how sales tax must be computed and displayed. These jurisdictions overlap, the sales tax you pay may be the aggregate of multiple different sales tax authorities between which there is no coordination.
Rounding to the nearest 5c or whatever creates a situation where in many locales it would be impossible to comply with sales tax and pricing laws because different tax authorities requiring mutually exclusive ways of making this change.
This creates an obvious need to change the law. This is not trivial because they are often written into statute or constrained by constitutional processes. It requires thousands of jurisdictions to all change their laws at the same time in the same way, which is effectively impossible. Even if it weren't the process would require several years. In many locales it requires a democratic vote -- what if the voters vote against it? Courts aren't going to let the government ignore these requirements because it would be inconvenient.
It really is a "herding cats" problem. There are many other things in the US that effectively can't be changed because there is no central authority to overcome coordination problems by fiat. Even at the level of all 50 States, resolving these kinds of coordination problems typically takes several decades.
> effectively impossible
Let’s assume you are correct. It is impossible to ever make this change for reasons X, Y, and Z.
What happens when stores just can’t get pennies anymore? Does the sky fall?
No! The US is totally different from Canada. We cannot learn from anyone else’s success because we are a unique snowflake.
As others have pointed out, governments sometimes issue actual guidance on how it's supposed to work when they phase out currency. It's not always "just stop making them and see how the market deals with it."
> It's not always "just stop making them and see how the market deals with it."
On the other hand, we’ve been delaying this inevitable and necessary action for decades over hand-wringing about the implications of rounding up or down by a maximum of two damn cents per transactions _for decades_. If we did it “the right way” I’m sure it would take years and years and cost millions of dollars to “study the effects” of eliminating the penny. Just do it already. Even with the best plan in the world people are going to whine about rounding.
It makes no sense to spend more money to mint the actual money, then the money is worth OK. You might not like it, but something has to be done because to continue in a slow and methodical process 1) forgets that the government is the same entity that runs the DMV 2) people love to throw out criticisms of solutions that aren’t perfect not realizing that it’s still better than the status quo. To do nothing is costing money or in the case of Ukraine it’s costing lives. 3) I bet you $100 You don’t like Trump.
1) DMV is state-run, not federal govt. 2) Why can't we at least spend 5 minutes studying how it went in Canada, and learn that govt guidance was helpful to the transition, so do that too? 3) Sure. And even more because, even when he DOES pick up on a good idea (I support elimination of the penny), he does so in a haphazard / slipshod way that the end result is often worse than if nothing had been done.
> 3) I bet you $100 You don’t like Trump.
I actually like Trump (or at least his presidency) a lot more than I think most Hacker News browsers do. I like Trump's presidency more than most of my co-workers and many of my friends do. My arguments in this thread are entirely my own, not the product of some political allegiance.
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.
You attempt that at my store. To help ensure my business is sustainable in these hard times (/s), I'm imposing a "multi-item order" fee at my store. Now what?
Now your customers go and shop at a store that isn't cartoonishly customer-hostile. Now what?
If you seriously think that's realistic I guess I don't know what to tell you.
Pizza chains have delivery fees that aren't paid to delivery drivers. Restaurants have service fees for cooking food and convenience fees for placing orders (even if paying, in cash, when you pick up), on top of the sticker price of the food itself, which used to just be the price.
Some people in this thread have talked about stores having signs saying they'll round change up to the dollar if you pay in cash, and advising to pay by card if you want exact change. I've personally seen businesses have signs on their cash registers that say "our cash register is easily hacked, we strongly recommend paying by cash instead instead of card" (I'm assuming so they can cheat on their taxes).
Businesses will do anything they can get away with to make more money, and they can usually get away with tiny fees like this. It's only a few cents, right? Except for them, it adds up.
This is nonsense. No store is going to charge a multi item fee so that they can try to scrape an extra penny off their customers. As someone else’s already pointed out, they could just do this today if they believe their customers will accept it. Did you forget that stores can just raise prices?
Your premise that stores will find a way to force rounding up is nonsense. It’s nonsense because stores aren’t actually going to do it, but also because we’re talking about *pennies*. Oh, no. The store ripped me off for 2 cents. How will I survive?
> As someone else’s already pointed out, they could just do this today if they believe their customers will accept it. Did you forget that stores can just raise prices?
As I already pointed out, customers would be more likely to accept it if there's an excuse for it (pennies are being phased out) than just randomly. The discussion's about what rounding may cause, not about what stores have the legal ability to do.
> It’s nonsense because stores aren’t actually going to do it, but also because we’re talking about pennies. Oh, no. The store ripped me off for 2 cents. How will I survive?
So this argument is just "you may be right, but I don't care." That's not an argument, imo.
No one is going to buy “multi transaction fee” because of pennies being phased out. This makes no sense.
You have constructed a whole chain of absurd claims that have no basis Did you forget that right now, today, stores willingly take a cent off virtually every price so they can do the x.99 thing?
> So this argument is just "you may be right, but I don't care." That's not an argument, imo.
No. I can simultaneously believe that you are wrong and also that the fundamental concern is absurd.
The experience of other countries that have actually implemented this (see: Canada) demonstrates that this is not actually a problem.
What's stopping you from doing it now ?
There's not as much incentive to right now, because I don't have an excuse to round up prices, and customers don't have a case for rounding down prices. This discussion's about the possible effects of rounding, not about whether businesses are in control of their prices.
> There's not as much incentive to right now
Yeah, because stores don’t have an incentive to raise prices usually…
Now people stop shopping at your store.
If the store is e.g. Walmart, then their scale's already large enough that I don't think this is going to put them under. And if every store's doing it, then there'll be nowhere to turn to.
What if the stores detain you and force you to work in their perfume department to pay off the million-dollar multi-item fee they just thought up? What if they also do a bunch of allergen testing on you to figure out what you're allergic to and then make you exclusively sell perfumes containing those allergens?
All because of that darn penny-rounding.
Won't someone think of the children?
That's an entirely off-topic comment that has nothing to do with anything I said and adds nothing to the discussion.
> 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.
Unlikely that stores would be required to price in 5 cent increments. That would presumably require legislative action and would fly in the face of gas stations today pricing with fractional cents.
But yeah, this isn’t a real issue regardless.
Sales tax gets applied first.
Sales tax rates aren't secret. Stores can set their prices with it in mind. Consumers are far less likely to have sales tax rates memorized and to go through the trouble of checking how things'll work out from the sticker price before they get to the register.
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.
When I was a kid, most sodas had a short can size of 8oz available, good for "lunches" and similar.
Funny story, Coca Cola just announced thin 7.5oz cans last month, to be available in January.
Shrinkflation is often done by phasing out an old size, often by jacking up the price first to aid the sales of the "family size" version on its way out, and then introducing a "New" size that's just a bit smaller.
Just take a zero out of everything and change the name from dollar to something else!
*dllar*
dolla
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 $0.50 each. Make your own coffee.
If you go through coffee regularly, it's actually quite a nice thing to invest in. There are a really amazing number of craft roasters throughout the country, and simply having a quality grinder is enough. And you don't need a crazy espresso setup to enjoy it. My setup consists of a motorized flat burr grinder, a 20$ kettle from target, and a pour over funnel. The quality is so much higher than anything you can get from a pod that's been sitting around with pre ground coffee, and it only takes a couple minutes while you're waiting for Claude to rewrite your codebase in Rust or whatever it is "Hackers" do these days
I want a cup of coffee not a science project.
There's some really good hand grinders these days too, minimal effort and only takes a minute.
I wonder if the gourmet high end plastic ends up in the brew.
As opposed to the plastic pipes your water runs through, the plastic water filter, plastic coffee maker, and plastic travel mug you pour it into?
It pairs wonderfully with all the plastic in your water.
If you want to save money get a Moka pot instead of that Keurig garbage.
Even cheaper, tastes better, and takes only slightly longer to make.
You can solve this problem even better by drinking instant coffee. Bonus points for it making yuppies cringe.
lol gourmet (coffee) and keurig pods don’t go together in the same sentence.
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
$0.666. Half the population would think it's the mark of the beast, the other half rounds up to 6-7.
and the third half of the population thinks it's egregious that a repeating fraction has been truncated!
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.
I wouldn't think there is enough coinage in a register to be interesting as a theft target, but i don't know! I think they would still make bill change, but maybe I misunderstood, sure. Next time I see one I'll use cash to find out!
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?
It’s kind of like lots of imperial measurements where we use metric still have these in idioms.
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?
1/8, so 2 bits is a quarter.
it comes from old spanish coins that they would cut into eight pieces, or bits.
I learned that after watching one of the pirates of the Caribbean movies and googling pieces of eight.
THIS exactly and oops, I replied too quickly :)
Half a quarter.
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.
i want them to make coins for all the current bills, and expand bills to higher amounts. Cash has not kept up with inflation.
>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)
Also, we can store 1/4 exactly in binary, but not 1/100, 1/20, or 1/10. So that solves another problem.
Why is everyone talking about rounding?
I've read there's enough pennies in bank vaults to last for years.
Nothing avoids rounding.
also bring back the 50-cent piece, eliminate the redundant dollar bill, and replace the 2 dollar bill with a new 2 dollar coin
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.
I’ve found that self-checkouts in Canada are a great way to get rid of piles of change. You can pretty much dump it in. Curiously, it will reject all the US coins and spit them back out.
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
Some interesting complications with rounding I had not heard about before were mentioned here, worth noting I think, especially given the prominence of SNAP in the news lately:
>Four states - Delaware, Connecticut, Michigan and Oregon - as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change, according to the National Association of Convenience Stores (NACS).
>In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.
>“Rounding down on all transactions presents several challenges beyond the loss of an average of 2 cents per transaction,” Lenard said. “We desperately need legislation that allows rounding so retailers can make change for these customers.”
They can round down the card transactions too if it’s really a problem to charge differing amounts.
For those that seriously think this would be a major problem there was a comedy skit circulating in Australia when this happened. A guy would push his car to the petrol pump, fill with 2c of petrol, rounded down to 0. The guy at the counter just laughed at it. You could in theory do this 1000 more times (would take hours) for $20 of free petrol. At least until the worker got sick of it and enforced the whole right to refuse service.
> enforced the whole right to refuse service.
This is what everyone forgets. If you can't provide exact change, then you can refuse service.
It’s a self-service gas station. Refuse…yourself? You pumped the gas before paying.
If you pay with cash you’re going to be going to the cashier first anyway.
in the us, gas stations require you to pay before filling
I had this same idea and seem to recall even trying it, but it was mostly thwarted when they added minimum liquid delivery amounts.
In the Netherlands cash payments get rounded to the nearest 5 cents, in both directions. Card payments are not rounded. If I’m not mistaken, you can still demand exact change according to the law and you’re allowed to pay the exact amount (cents are still legal tender). Most merchants wouldn’t be able to give you exact change, so it depends on the situation what would happen. I’ve never heard of such a situation happening, though.
You are mistaken. Merchants are allowed to round to the nearest 5 cents and you can’t do anything about it (except pay by card). Of course, budget stores like Lidl and Aldi still use them but any other corporation is not going to care.
http://www.nederlandsemunten.nl/Artikelen_over_munten/De_cen...
If someone demands exact change is it allowed to give them more? What if you don't have the exact change?
You could always refuse service, I guess.
I think they should just change the prices to make it work out after tax. It’s not that hard.
For the SNAP law, could they just round down SNAP purchases in the same way to be compliant?
The SNAP equal treatment rule requirement works in both directions: Prices cannot be higher or lower for SNAP recipients. As a retailer, there is an option to request a waiver, though.
IMO, this is a strawman that is either going to be ignored or fixed easily.
The law did not account for every possible situation. Removal of the penny from national currency is clear a situation where minor variations on otherwise normal transactions would not be in violation of the intent of the law.
It'd be like TSA griping that your 100ml bottle of mouthwash was overfilled by .1ml because of slight variations in the filling process. Nobody cares.
I work in admin for a retailer. We got a nastigram from USDA last week reminding us that we were in no circumstances to help SNAP recipients in any way. The current administration very much does not care what the intent of the law is, and is actively looking for trivial violations as an excuse to punish SNAP recipients and SNAP retailers. It would not surprise me at all to see a retailer banned from the program for how they round pennies.
So, that sounds like a yes, they could round up or down SNAP purchases just like cash purchases.
No, because they'd still be paying less/more than people paying with credit cards, debit cards, or checks.
Round them all. Why is this so difficult?
Retailers will reject ever rounding down because they lose money, and customers will reject ever rounding up because they lose money.
Completely different discussion. Regardless, you skipped explaining why these options worked for Canadian Penny (just 12 years ago) at a time when their penny had more buying power than the current US penny, yet the exact same thing cannot ever possibly work for the US penny.
Things don't just happen to cost *.99 today either, the market just has wiggle room for bullshit about values. With inflation, the coinage that corresponds to also inflates over time. The penny is long past its time.
Furthermore:
> Rounding to the closest nickel will cost consumers about $6 million a year, according to a July study by the Federal Reserve Bank of Richmond. That is fairly modest, coming to about five cents each across 133 million American households.
The US lost ~$85 million minting pennies in 2024 because they cost more to make than they are worth. That's over a 10x savings, not a loss. 5 cents is also less than 0.00006% of median household income in 2024.
If people were actually that worried we'd have had laws about credit card transaction fees decades ago.
How does this work with coupons, discount for loyalty card holders, etc.?
Presumably that's fine because a SNAP recipient has access to those same discounts. So wouldn't this be the same - the "cash rounding" discount is available to SNAP and people paying cash?
Anyone can have a coupon the law is about not special fees or discounts to SNAP recipients, and since EBT/SNAP cards are essentially debit cards them always being charged exact change could be litigated as differential pricing in theory, which in a country as big and sue happy as the US means someone will try it eventually.
They probably will, but that means a POS software update on a tight deadline.
It's not like pennies just cease existing. You just can't buy them from the mint anymore.
I bet if you give customers an easy and free way to deposit change or to turn it into larger denominations you easily get enough pennies to delay ther update a couple years
There are a lot of solutions, as everyone has mentioned. The problem is not hard, it’s “what color to paint the bikeshed” territory. But we’re still having to solve a problem on a tight deadline based on a tweeted proclamation with no federal legislature specifying exactly what solutions are allowed and what solutions conflict with existing law.
just make the price a multiple of five cents
State and local taxes make this infeasible
It's just American custom to exclude some taxes from the posted price. Many countries include all taxes in the price, something I've always wished we would do in America. After that, I'd love to see the elimination of the custom of always ending fuel cost per gallon in 9/10 of a cent.
I'm in Ireland where EU law mandates posted prices include all taxes and charges, and fuel prices are still advertised with a .9 or .8 at the end.
They're selling a liquid, so even if it were all priced in whole cents you'd have to deal with fractional cents.
Rounding sales tax on each item will often result in a different price than rounding once for the total. The store will collect the wrong amount of tax that way.
They're saying include the sales tax in the price and set the item's price such that the sum of price + all taxes is an even increment of 5 cents. Gets a little tricky with fractional sales taxes but that's only a problem where POS systems strictly enforce 2 digit cents (not sure if that's the case).
Come on, this is not complicated. It's elementary algebra. You sum the rounded prices, then add a credit or surcharge of 2 cents to make the tax come out to a round number.
The tax is on the actual, real amount in your transaction subtotal. You are charged sales tax on the actual, real money you pay for the entire transaction. Then you multiply by 1.06 or whatever the tax rate is. That's how sales tax works.
If one rearranges the equations as we all learned in 5th grade, one can compute the amount that the subtotal must be to get a round number after tax. Then you charge or credit the customer the difference.
Alternatively, the retailer can simply pay the 4 cent difference in sales tax.
That's it. You either do algebra or just pay the difference. It is not complicated.
You have to do this algebra per state and locale, and your reward is higher advertised prices than the shop next door. I think you both underestimate the problem and overestimate everyone involved in retail, especially the consumer.
I’m not saying it’s hard, I’m saying there is enough friction where it’s just not going to happen without legislation mandating it.
> it’s just not going to happen without legislation mandating it.
Obviously, and I don't think anyone said otherwise.
Well, this is happening without legislation mandating it (that’s kinda the problem, our federal legislature doesn’t legislate much and is being largely ignored)
> State and local taxes make this infeasible
I don’t see why that would be the case? In my country, most prices with VAT (which is what you’re charged) are nice, round numbers, but not the price without VAT.
I suppose the stores set a target price, and then adjust it a bit to make the price + VAT a “nice” number.
Is there a reason that couldn’t be done to make all prices + VAT multiples of 5c?
Several reasons, it really is a mess.
The local tax is set by multiple independent tax authorities that change their taxes independently, the tax you see is the aggregate of those independent authorities computed separately, which do not coordinate with each other.
Some of these taxes are conditional at point-of-sale, late-binding the taxes, such that different customers are subject to different rates across these tax authorities such that it is unlikely to round to exactly 5c.
It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.
And on top of all of this, the Federal government does not have the authority to regulate the way States and various locales structure their sales taxes. It is a herding cats problem.
> It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.
Having lived in Europe, this should be changed. It makes it infeasible to keep track of your total bill as you shop. The amount without tax should be printed on the receipt, if you care to reference it.
The issue is that the legal change would have to be made independently across thousands of decentralized tax authorities. Herding that many cats is infeasible so it can't be part of a plausible solution. In some jurisdictions, the legal process required to make the changes have effectively insurmountable voting thresholds.
It may not be convenient but any realistic solution has to recognize the hard facts that shape the nature of problem.
I've seen stores advertise "we pay your sales tax" like furniture outlets. Wouldn't this allow for legal priced items?
Lots of localities total taxes aren't whole percentages so it potentially gets tricky making prices work in those systems such that you can make whole 5 cent tax included prices with whole cent base prices. Do most POS systems support arbitrary precision item prices?
Retailers don't, like, have to add sales tax on top of listed prices.
They just have to pay it.
No, it's illegal in many, looks like most states:
https://www.avalara.com/blog/en/north-america/2019/07/retail...
IIRC, in New York it’s illegal to absorb sales tax on individual items because by law it’s a consumer tax collected by the business and explicitly not a tax on the business itself, but - and it’s a pretty big exception - anything sold as a bulk good can include the tax in the price. That includes things like liquid fuels, grains or candy by the scoop in the supermarket, loose sand/gravel/salt/whatever for outdoor use, and things like that. It’s been a long while since I had to set up an ecommerce site for New York though.
Who actually pays the tax depends on the Elasticity of the consumer and the business. Who the law says it should be collected from, is really irrelevant.
Now is our chance to switch to European style "you pay the price it says on the shelf"!
That makes too much sense, which is why it won't happen. Though I'd be all for it.
More specifically, if Americans stopped have a daily reminder of how much is paid in taxes (which IMO isn't egregious by any stretch), one party would have a tougher time whipping anti-tax sentiment.
Just show the price including tax. (half-sarcastic, because obviously that would be an unpopular change for sellers because it makes the visible number go up, but it would solve two problmes...)
They could still set the post-tax price to something that results in round numbers, at downside of the pre-tax price having more decimals.
> Just show the price including tax.
With a tax rate as precise as 1000ths of a percent in many jurisdictions*, you'd need extreme precision on the price tag (e.g. $11.798625), OR you need to substantially overcharge for tax (rounding up the tax to the penny or nickel on each individual item, instead of on the total of ALL items).
And sales tax rates can even be different from ONE CITY BLOCK TO THE NEXT.
* Arizona: 10.725% Hawaii: 4.712% Minnesota: 7.875% etc. https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...
No, you still round the number, that goes on the price tag and adjust the other.
So, lobby for changes to the structure of those taxes so that's not a problem. Tthe simple solution is changing them from surcharges adding a percent onto posted prices to making them a percentage taken out of the posted price; so that coin availability is only an issue in the improbable event that you are paying your sales tax bill in cash.
Of course, retailers don't want tax-inclusive posted prices, but... ::shrug::
Oh no, a made up problem that's easily solved by changing the price slightly in any direction, whatever will we do.
It's the same way with the penny.
Tax on a 0.99 item isn't coming out to an exact penny multiple.
So stores are already dealing with this situation
With some 5th grade algebra, one can adjust the total of a transaction to result in a round number after taxes.
Besides that, the law (at least where I live) is that the tax must be paid, but it does not specify by whom. It's completely feasible for a retailer to pay the 2 cent difference in the tax and charge the customer a round number.
Is this really the state of American education where a percentage calculation makes a very simple situation literally impossible? You can think of no other way to overcome the complicated calculations of checks notes x times 1.06?
Even with just a 6% tax, you end up with prices that need 4 digits of precision after the decimal (e.g.: $11.6494). That issue extends over a wide range of pre-tax/input prices, so one would have to DRASTICALLY change the prices so that the price including 6% tax rounds to even a penny, let alone a nickel.
While you could calculate a price that (after tax) would round a single item to the nearest nickel, it's completely IMPOSSIBLE to do so with unknown numbers of multiple items.
In addition, tax rates in the real world aren't just single-digit percentages. They have precision of 1/1000th of a percent, making such a calculation much more challenging.
Arizona: 10.725% Hawaii: 4.712% Minnesota: 7.875% etc.
https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...
And sales tax rates can be different from ONE CITY BLOCK TO THE NEXT, so a company with more than one location would find it IMPOSSIBLE to advertise their prices at all.
Right, but getting fined in this situation means the government is incompetent. They should just tell retailers the "right" thing to do and not fine any retailers that follow the guidelines.
The idea that this is complicated legally is an example of why so many Americans are so frustrated with their government. Common sense should rule the day, not mindless legalism.
The issue with "common sense" is there's no way to run anything based on it because you'll get 100 different ideas of what that means in any situation. 90% of customers would be fine with the rounding to the nearest 5 cent plan but there's a streak of stubborn people who'd refuse to accept it and waste some legal time trying to get proven 'right' so the stores want legal clarity so they don't have to deal with that.
We eliminated pennies in Canada in 2012 and the transition was a non-issue. The vast majority of retailers would round cash transactions to the nearest $0.05, but a few would round down to the nearest $0.05 in favor of the customer. https://en.wikipedia.org/wiki/Withdrawal_of_low-denomination...
Canadian cash is better than American cash in several ways: No penny, durable polymer banknotes (instead of dirty wrinkly cotton paper), colorful banknotes (instead of all green) that are easy to distinguish, $1 and $2 coins in wide circulation (instead of worn-out $1 bills).
> the transition was a non-issue
I'm reminded of when Minnesota passed the Minnesota Clean Indoor Air Act (MCIAA) close to 20 years ago. (Some) restauranteurs - along with the GOP - made pronouncements about how this would destroy the economy. No one would go to out to eat or for a drink again. Doom and gloom.
Last I checked, there are plenty of restaurants open in the state, and things are going fine. In fact, just before the MCIAA went into effect, I had a newborn, and we went out to eat one time with him in tow. We asked for a non-smoking area but were placed immediately next to a family chain smoking. We decided to never go out to eat again until we could do so without risk of second-hand smoke.
My point is that there are frequently these predictions of things being impossible or even just incredibly difficult and not worth the effort, and in the end, it's not a big deal.
> I'm reminded of when Minnesota passed the Minnesota Clean Indoor Air Act (MCIAA) close to 20 years ago. (Some) restauranteurs - along with the GOP - made pronouncements about how this would destroy the economy. No one would go to out to eat or for a drink again. Doom and gloom.
Yeah, they had done the same thing when California did the same thing 30 years ago. The fact that it didn't happen then didn't stop them from doing it everywhere else similar laws were subsequently proposed.
People overestimated the importance that smokers placed on being able to smoke in public.
A Japanese airline (Air Do) tried reintroducing the smoking section in the 1990s. It did not go well for them, and Japan's tobacco use rate was several times the US's.
I'll agree on all but one point. The cotton/linen notes feel so much better in the hand than the candy wrapper plastic of Canadian bills. I know it's a dumb reason, but I just hate the feeling.
Plus US dollars just have that smell to them. I wouldn't mind though if we rotated out some of the faces on the bills, e.g. Andrew Jackson
Is that what cocaine smells like?
Cocaine and feces smells like freedom
You do know who would be the first person to rotate in, don't you.
It would obviously be someone as equally legendary as Washington or Jefferson; noted American Paul Bunyan. We can even call them Big Blue Bucks.
My politics and his don't line up but I'm not against this. It would be pretty interesting to see the impact on cash usage, and faces on money are pretty archeologically useful-- at least on coins.
let's wait a few years before rotating faces to avoid debating another blatantly illegal thing Dear Leader would propose (actually he already did but it was out of the news rather quickly)
I am suspicious of any claims about relative cleanliness. As with wooden vs plastic cutting boards, our intuitions are likely misleading.
To be an effective fomite the currency has to not kill the microbe, and it has to readily give up the microbe to the next recipient. Organic materials like cotton or linen seem more likely to simply absorb a viral envelope or bacterial cell wall, thereby rendering it ineffective. Furthermore, the porous nature makes it more difficult for the note to give up any microbe that isn't immediately killed before it naturally dies over time.
A brief search of the scientific literature doesn't seem to show any conclusive results, but it does seem like the relative performance is pathogen specific.
"Dirty" also connotes physical appearance, you know.
The linked article raises a few problems that the US could have with that solution:
> Four states - Delaware, Connecticut, Michigan and Oregon - as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change.
This seems like a non-issue as long as they round the price down. Because there's no law that the store can't discount their total by a small amount and then provide exact change.
"Congratulations customer, we have a special coupon today for $0.03 off your purchase. Here's your change :)"
> In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.
So just round snap transactions too, not just cash ones. Now SNAP recipients are never paying more than any other customer for the same basket of goods.
So how do they account for people who use coupons or rewards cards today? Those create a discount that technically result in charging some customers less than others, including SNAP users. In the case of rounding, you wouldn't be charging SNAP user any more that other users who use cards for payment. The point of the law was to prevent stores from charging surcharges etc on food stamp users back in the day.
Rewards are taken from merchant fees. The retailer isn't party to that rebate. Likewise, coupons are almost always funded by the manufacturer who returns those monies to the store.
"Rewards are taken from merchant fees."
That would be true for credit card fees, but not for stuff like loyalty card discounts.
"Likewise, coupons are almost always funded by the manufacturer who returns those monies to the store."
It doesn't matter. The store is the one charging the customer. As stated, the law says the store cannot charge SNAP recipients more. Thus it would be a violation if we are taking it strictly.
When I lived in Australia, those paying with card were charged the exact amount. Those paying cash would round to the nearest 5 cents, in the customer’s favor. I suspect the same will happen here.
I don't see why you couldn't do it in either case. If you modify the actual price, then you are giving exact change. Why wouldn't round() be as valid a price modification as floor()?
Presumably "increase the price a small amount to avoid giving exact change" is exactly the sort of thing that laws requiring giving exact change were designed to prevent.
There will surely be some customer pissed about the extra 2 cents they were charged who will raise hell over the exact change law.
But what customer is going to be upset over a small discount?
Maybe sales tax makes that harder?
I guess you could calculate all of your prices such that, once sales tax is added, they round to a 5 cent value.
You don't need to do that. Compute the total sale, then figure the tax, then round. You don't need to round per item.
> require merchants to provide exact change
All the items in my dad's farm shop were priced so they came out to a round dollar amount after tax, and that was 40 years ago.
But less decent people can’t resist the dark pattern of using $x.99 prices everywhere.
At big retailers the price tag code indicates what type of price it is. For example the last digits can mean:
0: full
9: sale
8: reduced
7: clearance (item will not restock)
I forget the exact system Sears used but we could tell at a glance if a deal was really “good”.
I’m curious if Sears and WalMart used different systems and if WalMart exploited knowledge of the Sears system to signal better prices to shoppers. Like a full WalMart price being .97 and clearance being .94.
That sounds close to the Sears system to me, but they used the tens place. 8x was used for returned big ticket items, like appliances and treadmills. It would start at 88 and the rightmost digit would decrement to indicate how many weeks it had been sitting there.
It was 00 for full, 99 for sale (the majority of items, except for the one week every year they established the full price for that product), 8x for clearance.
[delayed]
It’s far more complicated than that. There is no one sales tax for everyone.
Oregon residents didn’t pay sales tax when making purchases in Idaho. Washington charges sales tax on out of state purchases if that state’s sales tax is less than Washington’s, including if it is zero.
How do they deal with sales tax? Connecticut has a 6.35% sales tax so if I buy something for $1, the total will be $1.0635.
They could do what every other country does, and include the sales tax in the shelf label price.
Paying cash, you would pay $1.05.
I'm referring to states that don't allow rounding.
> in some states, merchants could face legal trouble for rounding up or down
It seems obvious to me they are already rounding to the $1/100. Why is rounding to $1/20 a problem?
If the US properly got rid of pennies (instead of Trump just doing another end-run around congress, by ordering the Mint to stop making them, on shaky legal ground), the legislation could easily supersede those state laws.
I think this is wrong.
As far as I can tell the relevant statute is 31 USC §5112, and it does not require the minting of all authorized coins:
“(a) The Secretary of the Treasury *may mint* and issue only the following coins: ... (6) ... a one-cent coin that is 0.75 inch in diameter and weighs 3.11 grams.”
(Emphasis mine)
There may be another clause somewhere that requires the Treasury to issue all coins, but that seems unlikely to me. The _number_ of coins to issue of each type is left to the discretion of the Treasury; why wouldn't that include the option to issue none?
https://www.law.cornell.edu/uscode/text/31/5112
I addressed in another reply that "'none' is all that's necessary" is probably a defensible interpretation of the law (the more relevant portion being in 5111 rather than 5112), but the penny being explicitly listed makes it clearly not the intention of congress. That's why I said it's a "shaky" and not "baseless" legal ground. The law is clearly written with the expectation that there will be some, which is why Congress felt the need to pass the Coinage Act of 1857 to phase out the half cent.
I think we should get rid of the penny, but it's Congress's responsibility to do that, and they haven't. I'm opposed to Congress abdicating its power and responsibility like that.
You're right, 5111 is more pertinent here.
5111(a)(1) says “shall mint and issue coins” but qualifies it explicitly with “in amounts the Secretary decides are necessary to meet the needs of the United States”. This is a clear delegation of authority.
If you don't think zero pennies is a permissible amount, what about one penny? Two? What minimum number are you arguing for here, and what's your justification for it?
If Congress had wanted to set a minimum number, they could have done so.
Reading it as ”shall mint” is wrong, I think. “Shall” qualifies the whole clause “mint in amounts the Secretary decides (etc.)”.
Understood that way, 5111 makes it unlawful to mint any pennies if the Secretary decides that none are necessary.
If Congress had wanted to get rid of the penny, they would have done so, since they specifically have the power to “coin money” under Article 1, Section 8.
In fact they have introduced a bill to do just that, that has not passed yet, which means they have not done that.
What exactly is the law?
Can you show me the statute requiring the treasury department to coin pennies?
Article 1, Section 8 of the constitution gives Congress the authority responsibility to coin money. And in the coinage act of 1792, 31 USC 5111(a)(1), congress directs that the treasury "shall mint and issue coins described in section 5112 of this title in amounts the Secretary decides are necessary to meet the needs of the United States", with the list in section 5112 explicitly listing the penny (31 USC 5112(a)(6)). It's clearly intended to instruct the treasury to mint pennies without congress needing to proscribe the varying amount every year. It also clearly demonstrates the intent that pennies "shall" be produced.
https://spectrumlocalnews.com/mo/st-louis/politics/2025/04/3... https://www.law.cornell.edu/uscode/text/31/5111 https://www.law.cornell.edu/uscode/text/31/5112
The fact that all of that gives leeway for "'none' is all that's necessary" is why I said the legal basis was "shaky" and not "baseless". I think getting rid of pennies is good, but this is something that Congress needs to do, rather than continually abdicating its responsibilities.
Don't you understand it's an emergency?!?! The United States may not be standing next week if we don't stop minting the penny now!!!
American banknotes have numbers on them to easily distinguish the different values!
> The United States is the only country that prints all denominations of currency in the same size. The US and Switzerland are the only two countries that use the same colors for all of their various bills. Needless to say, this sameness of size and color make it impossible for a blind person to locate the correct bills to make a purchase without some sort of assistance, or confirm that he or she has been given the correct change by the sales clerk. Even people with partial sight may have trouble distinguishing a $1 bill from a $10, especially if the bill is old and worn.
https://afb.org/blindness-and-low-vision/using-technology/ac...
> The United States is the only country that prints all denominations of currency in the same size
Let me assure you that all Canadian banknotes are the same size too, 6.00 inch × 2.75 inch (152.40 mm × 69.85 mm). I'm not sure how the article got this fact wrong.
As a side note, Canadian banknotes don't have braille, but have an ad hoc system of bumps: https://en.wikipedia.org/wiki/Canadian_currency_tactile_feat...
> Let me assure you that all Canadian banknotes are the same size too [...] not sure how the article got this fact wrong.
Because Canada is just part of the U.S.
(flame away)
> Because Canada is just part of the U.S.
As a Canadian, I'm amused to hear this because it is basically true as a first approximation.
Random factoid - Canadian coins ($2, $1, $0.25, $0.10, $0.05, $0.01 (withdrawn)) come in almost the same denominations as US coins ($1 (uncommon), $0.05 (rare), $0.25, $0.10, $0.05, $0.01), and they are the same diameter and thickness, but maybe having different weight and magnetic properties. It's kind of scary that Canadian coins are essentially state-sanctioned counterfeits of US coins.
Another weird thing is that the National Basketball Association (NBA) has 29 American teams and 1 Canadian one... making it more of an international basketball association. I think another sports league with "national" in its name also crosses national boundaries.
If you take a random person and teleport them between a random mix of Canadian and US cities, I think they'll find it hard to tell the two countries apart. The primary language is English, the accent is the same, the streets and buildings look the same, people watch/listen/read much of the same media, and so on.
One party trick that I practice when traveling in America is to not volunteer information about where I'm from, and see how long I can blend into groups of people and conversations until someone suspects something or asks a direct question. Needless to say, I can last pretty long, and even debated things like US federal politics. The internal diversity of people within the US (e.g. skin color, accent, beliefs) really helps an outsider like me blend in.
Also note that there is a one-way relationship going on. Canadians know more about the US than what's necessary for life. Heck, even the state broadcaster CBC will put out entire news segments (e.g. 5 to 20 minutes) on US-specific issues. Knowing about the US - whether it's major companies, cities, TV series - is unavoidable to Canadians. But ask the average American about anything related to Canada, and you'll likely get a blank stare.
However, some of the differences between Canada and the USA include: Guns(!), personal and state violence, healthcare, social safety net, political polarization, income, prestige, number of big companies, French language, atmospheric climate.
> Another weird thing is that the National Basketball Association (NBA) has 29 American teams and 1 Canadian one
The NHL is a better example of this, I think.
> Although similar in appearance to braille, it differs because standard Braille was deemed too sensitive.
Yes. This system is more resistant to wear and tear.
It's a bit odd that the mint doesn't emboss the denomination in braille on each note. I'd think that there would be a way to do that and have it hold up pretty well in circulation?
I think I've seen that blind people in the US have a little machine that they can use to add the braille themselves. Also from a quick google search there's also electronic bill readers that can be provided to blind people for free if they qualify.
In Canada the bills are embossed with braille by the mint. There may be other accommodations too, but I haven't looked it up.
> I think I've seen that blind people in the US have a little machine that they can use to add the braille themselves.
That solves half the problem, but you still don't know whether you're getting correct change.
Not braille; see https://news.ycombinator.com/item?id=45904000.
Braille does not help everyone. Most people with vision issues are not legally lind and do not know braille.
Anyone able to feel the dots could learn to distinguish bills this way without learning braille beyond that, regardless of their vision.
Anyone who didn't find the feature useful could ignore it.
In canada it's "one cluster of dots = $5, two clusters = $10, three = $20" and so on. You just feel the number of dot clusters & count, no braille involved.
It's wild to see you downvoted. Only about 10% of blind people know braille. There are many more people who have visual impairments but are not blind. Braille is not a universal solution (though I would rather have it than not have it).
Chiming in to complain that a good, working solution to a problem just doesn't happen to solve ALL PROBLEMS is just banality or perhaps pedantry. Unless it was also proposing an alternative that might do better...
Braille on money also doesn't help dyslexic quadrplegics with dysesthesia... Checkmate.
But you don't need to know braille to learn how the most common bills are marked.
Just like you don't need to know Japanese to count the exact amount of yen bills.
You need a week of low-key exposure to learn how each bill is marked.
Switzerland has same colors for all of the various bills? As far as I can tell, that has never been true
This also confused me. The current ones have very distinct colors and also all the previous series used different colors as far as I can tell: https://en.wikipedia.org/wiki/Banknotes_of_the_Swiss_franc
The ten dollar bill has a somewhat different color than the other currency, somewhat yellowish.
All U.S. bills in common circulation (all denominations except $2) have been different colors for 20 years.
From dealing with Euro notes, I like being able to look down at the money in the wallet and pull the right notes out based on color. With USD I need to take the bills out of the wallet.
Which is great if you are fully abled! But for folks for whom sight isn't as strong, additional aids (different colors, different sized banknotes for different denominations) are super helpful.
Being fully sighted, I still appreciate it.
https://en.wikipedia.org/wiki/Curb_cut_effect
Some currencies also have braille-like embossments so that if you're totally blind, you can still pick out the correct denominations.
Not everyone can see.
Australian notes vary in size for this reason.
And it would be even easier to distinguish them if they were different colors in addition to the printed numerals.
This is a joke right?
That's because in Canada you actually prepared for the transition, instead of just proclaiming it in a tweet.
Paying by card doesn't round, the amount charged is exact cents, or at least that's the way it worked last time I was in Canada.
> $1 and $2 coins in wide circulation (instead of worn-out $1 bills).
This has its own pros/cons...
One advantage of $1 bill over coin is the majority of people in US don't need a wallet with zipper to hold coins. Five $1 bills is much less bulky and much lighter than five $1 CAD or five 1€ coins
I simply don’t like coins because they are heavy. I will continue to prefer $1 bills over $1 coins. Agree with the rest of your points though.
Canadian Tire Company should be the ones designing the bills, however…
In my country they round up if you pay in cash but they keep the cents for electronic payments.
So for instance 1.69 in cash would be 1.70 but if you pay with your phone it stays at 1.69
There are several US states where, by law, retailers are not allowed to give preferential treatment to credit card paying customers over cash paying ones. Which means, in those states, retailers will be required to always round transactions to the cash paying customer's benefit, where in other states the retailer is allowed to round to the nearest 5 cents. This is going to cost large retailers millions.
Interestingly many of them had already put the work into updating the cash register software to allow for this due to the penny shortages during covid.
Let those large retailers put pressure on their suppliers. Prices haven't exactly been stable recently. I really don't think it matters, but if it did (as you claim) then surely some downward pressure is a good thing.
It doesn't cost anyone anything. They can just raise prices 3 cents or whatever.
It gets tricky because sales tax is added on top of the sticker price.
Then include the sales tax in the sticker price, like every other country does.
Unfortunately I think this is much easier said than done. No single store is going to want to make this change, because it'll make their prices look higher than the competitors'. It'd require legislation, (and even that'd likely be state-by-state legislation).
It also means a company wouldn't be able to advertise a single price for a product nationwide, since sales tax rates vary by state (and many times even within a state).
Also worth noting that Canada also doesn't include sales taxes.
The statistics on consumers evaluating the purchase of something that is $9.99 vs $10 is well proven.
Switching to round number prices would cost retailers a whole lot more.
https://www.sciencedirect.com/science/article/pii/S002243599...
https://www.researchgate.net/publication/23547242_Penny_Wise...
https://www.sciencedirect.com/science/article/pii/S002243590...
The rounding is applied to an entire-after tax bill, not to shelf prices.
Again: Canada actually did this many years ago. The effect you predict did not appear.
All green notes are barely there anymore... the dollar bill itself. Even the five has some color now.
I honestly don't know why we don't get rid of nickels and dimes as well. What can you still buy that costs less than $0.25?
When we got rid of the half-penny, it was worth more in 2024 cents than the dime is now.
We waited so long past when we should have gotten rid of the penny that now a coin ten times as valuable is also worthless enough that we ought to get rid of it.
So how would you propose paying for something that cost $0.40, or would you just like to see all prices be multiples of 25c?
BTW, the reason for wanting to get rid of the penny isn't so much the low purchasing value, but more that they cost more to make (~4c) than their face value, so the government loses money making them. The same is true of nickels.
Yes, the quarter is pretty much the smallest useful unit of US currency and even that usefulness is shrinking pretty quickly.
If we would adopt a policy of including local sales tax in advertised prices, skipping to whole dollars would be pretty painless.
The main reason to keep at least quarters is all of the various coin-op machines that are still in service.
The US has too many tax permutations for this to be practicable. Companies would have to make prices a bit higher to accommodate unexpected sales tax increases in some or other jurisdiction.
There's a small industry that specializes in knowing what the sales tax for a particular transaction should be at the moment it goes through.
Knowing the sales tax at a particular in-person store is more feasible, and that’s the only case where you have to deal with cash.
If I’m buying online with a digital transaction you can charge whatever cents are necessary.
You then still have the issue of standardized advertising prices.
Right now, a company can say they sell gadget X for $999, which would not be possible if they had to work out item taxes.
The other possibility is that they now have to mark X up to take into account the most pessimistic possible tax rate and advertise the marked-up rate.
Forcing the simplification of all those taxes doesn't seem like it has a downside, to me.
That would centralize power to the larger taxing authority.
Right now, there's a huge number of elected people in the US who wield real local power through these taxes and other rules that they can make.
It's a headache but we live in the computer age and we can automate administrative things like tax calculation at checkout; we should be using systems to aid decentralization and democratization instead of the opposite.
My employer has a 55¢ vending machine with a dodgy bill validator.
I was once at a place that had a vending machine that accepted U.S. Currency as well as coupons. I wish I saved one of those coupons and reverse-engineered it and see if it worked on other machines, oh well.
Bananas
Same in UK but we also size each face value differently.
Which helps partially sighted people and is a good visual check.
It doesn't happen very often, but resizing coins when a new design is created strikes me as annoying.
Last time I was in the UK I also found it funny how large the 2p coin is compared to its value.
Even though I never use cash, I’m really not a fan of coins, so I wish we did have $1 bills.
We do have $1 bills. And coins!
The US has been moving to colored denominations for awhile now.
> We eliminated pennies in Canada in 2012 and the transition was a non-issue.
That's because Canada had a plan, thought it through, and rolled it out.
In the US...
“We had a social media post (by Trump) during Super Bowl Sunday, but no real plan for what retailers would have to do,” he said, referring to the president’s February announcement.
We have a deranged old man posting random shit on social media determining federal policy, so of course it's a chaotic shitshow.
We elected a clown, we got a circus.
Unlike serving as a Republican politician, clowning requires a lot of work and training. It's nothing resembling an unskilled job. Ringling Bros. would do a lot better.
US notes also stink.
Better is very subjective here. I hate the colorful, plastic, canadian money. It feels toyish, like monopoly money. Whereas USD feels much more nice to deal with.
As a Canadian with kids who recently bought Monopoly, I can you tell you that American money objectively feels much more like Monopoly money...
Copper pennies weigh 3.11 grams. Copper is currently US$10987 per tonne https://www.metal.com/en/prices/LME_CA_3M so a copper penny is worth 3.4¢. This is a surprisingly low number to me; I would have expected it to be closer to 10¢ or 20¢, since presumably it was about 1¢ of copper when it was still copper.
By comparison, a silver dime (90% silver, 10% copper) is 2.268 grams, and silver is US$1486.77/kg https://www.metal.com/en/prices/201102250392, so the dime contains about US$3.03 worth of silver. From the point of view of an 18th- or 19th-century person, for whom the purpose of the mint was to certify the value of the precious metal in the coin by stamping it, the dollar has lost 29/30 (97%) of its value since minting of silver coins ended.
Too early to say "ever", considering there has been no act of congress on this matter and the penny continues to be legal tender. The decision to stop minting it is a (legally debatable) executive order, and the next president or even the current one can change their mind about it tomorrow.
lets hope not. This is long overdue and should pose relatively little issue compared to most other recent questionable executive orders.
stop minting and stop accepting is commonly separated to allow adjustment. so likely a later president will just add the second phaseout step.
I agree it's time to follow Canada and the rest of the world but it needs to be done through congress, not executive orders. It needs to have a proper framework for migration and laws for how payments are rounded.
I don’t believe we actually have a law that dictates how to round in Canada. There’s just a government recommendation.
I get that the U.S. is a much lower trust culture, but is it really necessary? The rounding is only for cash transactions.
I watched a video on the demise of the penny and its predicament was so succinctly explained: everyone gets pennies as change but few carry them around let alone spend them, so we are stuck producing ever more. One news outlet even did an "experiment" where they threw hundreds of pennies on the ground in a city on a busy morning and not one person stopped to pick any up.
> everyone gets pennies as change but few carry them around let alone spend them
It's not just pennies, it's all coins. In a former life I worked in retail and almost nobody would fish around in their pockets for exact (or even near) change. They'd always hand me bills for their purchase even if they had just completed a transaction and had the coins in their pocket. That was in the 90's, and I still see it happening today, even though I'm no longer in the retail world.
I’d regularly use quarters in vending machines, but not waste time during a retail transaction.
In most other countries, since prices are shown including all taxes you can often have the money ready while waiting in line etc.
Another aspect of the idiotic "we don't know what your tax is going to be" system (they do know it, actually) is that prices will typically end with .99 and the tax will push it over the next dollar and cause a bunch of change to be returned, instead of a single penny.
It's amazing to me that people consider "saving time while paying money" to be a good thing.
I will never "tap" my debit card as long as I have any legal option. Everyone else can wait for me to exercise my consumer rights, by inputting my PIN, verifying the amount displayed on screen etc.
Wasting people’s time is rude here not illegal.
Courtesy may seem outdated to some, but it can occasionally come back to bite people. Being overly rude to waitstaff is something I’m concerned with around promotions because of how they might treat people inside the company. Without better information you extrapolate.
I've seen a pattern where people that value their own time at $0 unfortunately often value the time of others at $0. Worse is valuing others at $0 and your own at $lots (which is also common).
> but not waste time during a retail transaction.
we could just go back to writing checks while we're at it.
I pay exact change whenever I can.
And on the occasions where I can only make (exact change + simple amount), I often get deer-in-headlights looks from cashiers who can't do mental arithmetic and apparently haven't learned how to get the machine to understand payments of more than one physical bill or coin.
Nowadays I pay for everything with my phone but back in the day I too hated using coins. Having to calculate and fish out coins? Ain't nobody got time for that.
> Having to calculate and fish out coins? Ain't nobody got time for that.
It's not that hard or time consuming if you actually use your change instead of letting it accumulate. I typically have less than a dollar in coins on my person at any given time because I spent it.
If you're paying in cash, you either take time to count the change you're going to spend, or you take time waiting for the cashier to count the change you're going to get. Or you go cashless and avoid the whole thing
It's amazing to me that there are people with this mindset. I enjoy the process.
That's incredibly bizarre. If I have coins my first instinct is to spend them ASAP so I don't have to carry them around.
Only place I've ever noticed them is the $0.01 pony ride that's been sitting at my grocery store for 30 years.
Even they've gotten the hint and simply leave a tray of pennies next to it so people can actually use it.
Random anecdote: I go to a boulangerie almost daily (as one does here in France). There is one close to me that started charging 12 centimes for slicing the bread. I got annoyed with this and nowadays make a point to take lots of small change from the coin jar and use it. They don't seem to mind.
I remember moving out of a place (decades ago). I was the last roommate out, and so was stuck with some of the cleanup (wanted to get that deposit back!).
One of the things we had was a ton of pennies (no idea why). I had no room in my car, so I spend a few minutes late at night flinging pennies out onto the sidewalk after a long day of cleaning the place.
Would it not have been better/easier for all involved to have just set a container of all the pennies on the street on your way out? If someone really could use them, you're kind of a dick for making them pick them up one at a time, but if they were all together...
I actually do that for numismatic reasons now. After today they will only increase in scarcity.
Not that I imagine they'll ever be valuable mind you... I should really just go and get $5 worth somewhere. That would satiate my desires
> not one person stopped to pick any up.
Isn't that the old joke about the economist?
I use quarters in parking meters sometimes.
>But with 20 million customers a year, and 17% of them paying with cash, the policy will eventually cost Kwik Trip a couple of million dollars a year, McHugh said.
If we figure two-fifths of cash transactions need to be rounded up and the store is losing an average of 1.5 cents each time, their expected losses would be around $2,000, yeah?
> Kwik Trip, a family-owned convenience store chain that operates in the Midwest, decided to round down cash purchases in stores where it hasn’t been able to find pennies.
They're rounding all cash transactions down to the nearest nickel, so an average of 2 cents per transaction, 3.4 million customers, gives me $68,000 assuming each "customer" makes a single transaction per year. If they mean that there are 20 million unique customers, not 20m transactions, then the a long tail of customers who make frequent small transactions in cash could make their claim check out.
Certianly the costs in employee time making change in pennies and stocking / transporting / changing pennies is way higher
Whatever the total ends up being, it's basically a marketing expense that they're electing to make. Probably they do it for a year and then switch to rounding to the nearest nickel, which is what everyone else will be doing.
I would bet they have a way to write it off.
Edit: why disagree? Can't the write it off as a loss, uncollected account, or promotional? Maybe even goodwill
Writing it off as a loss isn't useful.
Without a write off, their income is $X (what they actually collected), with a write off, their income is $Z (what they should have collected) - $Y (what they didn't collect), but $X = $Z - $Y. There's no material difference between counting what they actual collect as income vs what they should have collected minus the goodwill discount. Unless there's some specific tax justification (maybe accounting differences could justify remitting less sales tax overall and retaining more of the funds, etc)
Why wouldn't the write off be useful? I think your formual needs to add "+ ($Y x .3)" for tax deduction if you frame as promotional or other tax write off strategies.
It won't be the same as what they would have collected without rounding, but it will be better than if you didn't write off anything.
20 million customers doesn't mean 20 million transactions. Considering we are talking about a convenience store I'm sure a large chunk of their customers visit every day, some probably multiple times a day.
Assuming 3.4 million customers (cash users) and 2.5 cents average loss per transaction, it would only take one visit a month for them to cross a million dollars in losses.
Of course at that scale it's not like that million or two is really making a difference to their bottom line. Doing some quick Googling their annual revenue is estimated to be $6-7 billion.
They must mean unique customers, not customer transactions.
They have about 878 stores, according to Wikipedia, so if it was transactions, each store would only see about 62 transactions per day, which is way too low.
Sure. But multiply by whatever number you want and it is still the same percentage of revenue.
If we make the maximally pessimistic assumption that every cash transaction would require rounding down four cents, that's 68,000 customers per year times four cents, which is $136,000 per year.
A more reasonable assumption that half of transactions require rounding down cuts that in half, I suppose.
20m customers * 17% * 4 cents * 'x' transactions per customer = $136,000 * x
I suppose this makes some sense. In a worst case situation, if every customer makes 10-20 transactions per year, and they always round down the maximum possible amount, they would lose millions per year.
In many parts of Wisconsin the value of `x` could very easily be 100+, so I'd say this checks out.
I get $20,400 (20m * 17% * 40% * 0.015). But that's still nothing for a company that does 20 million POS transactions a year.
It's cheaper than the credit card fees, that's for sure.
What's more contemptible: that CNN refused to spend the 30 seconds that it would take to do the math; or that it interviewed a "spokesman" that also didn't spend 30 seconds to do the math, and was sure that nobody would check?
This is the kind of article that should be written by AI (or not written, really.) If you completely fictionalized the empty interviews, nothing would be lost.
Maybe the "spokesman" has been told to angle for a government subsidy for the inconvenience of losing pennies? And from a gas station, which add that goofy fraction of a cent at the end of their pricing.
Like many people, I throw my change into a jar when I get home. One time I only kept pennies and used an old apple cider jug. Turns out that a gallon of pennies is worth almost $55 [0]. And that carrying a heavy glass jug filled with pennies to the Coinstar machine is very anxiety inducing.
Speaking of which - the Coinstar machines near me will give you several options for redemption. Some of which have been Amazon and Home Depot e-gift codes that have no redemption fee.
[0] A potential worthless interview question...
I'm not sure why the article says this is so hard for retailers to figure out. They already round.
When they apply 7% sales tax to a $1.99 purchase, what do they charge you? $2.1293? Obviously not.
Just do whatever they already do.
So what you're telling me is that pennies are the new bitcoin. Fixed supply.
Except they're backed by something of value (worth even more than a penny).
Gas prices are frequently in fractions of a penny. This never matters because they round. Yep, rounding, in the real world, and the nation has not imploded. As pointed out by others Canada does this already and it's no issue.
And whenever tax is added it's usually a fraction of a penny as well. Rounding has been with us for a long time.
I’m old enough to remember being able to scrounge around the house for pennies and heading down to Gracie’s corner store so I could buy some Swedish fish. They were 1 cent each. Gracie counted them out and put them in a small paper bag for you.
A major score was finding a dime or quarter on the street. When the Whatchamacallit first came out they were 25 cents!
Do any other countries have/had “penny squish” souvenir machines? You put in 2 quarters + a penny, and it stamps a design onto the penny. My favorite souvenir, small, cheap, can keep in a booklet, and many landmarks have the machines. There are a few machines that take a $1 bill and use a fresh penny blank internally.
Can any coin collectors let me know what, if any, effect this may have on the collection of steel pennies I have secured in my bunker in the woods?
"What are we going to do about the rounding problem?!"
INCLUDE TAX IN THE PRICE, then you won't have a rounding problem!
The common argument against that is "but there are so many tax jurisdictions"
One, Europe has a bunch too and has solved this, and two, it would only apply to in person cash transactions. You should be able to figure out the tax rules for the one specific place the transaction is taking place.
Call me cynical but I don't at all believe the issue is tax jurisdictions or anything related to complexity.
It's that it's easier to show a price of $0.99 and have the consumer pay $1.08 (for example) than either show a price of $1.08 and have the consumer pay it, or show a price of $0.99 and have the consumer pay $0.99 and "lose" 7 cents (because your price was $0.92 before taxes).
Pre-tax price is lower and sells better than post-tax price.
That wouldn't apply if everyone included tax in their prices. In this case, the item would just be $1.10.
If the business really thinks they will lose money by pricing over a dollar, then yes, they would have to take that hit. But they are already taking that hit if the "real value" is $1.02 for example.
It's just a price/demand curve. They would simply have to optimize it differently.
There's a reason everything is priced at some variety of .99, 99.99, 999.99, etc: it sells better than 1.08, 108, 1080, etc.
My point is getting the consumer to eat the sales tax on top is just a wise trick by US businesses, and nothing to do with complexity.
That's been debunked. Every consumer just auto-rounds in their head. Companies keep doing it because of tradition more than anything else.
It is a wise trick, and exactly the job of government -- to prevent the public from getting tricked by businesses.
> That's been debunked. Every consumer just auto-rounds in their head.
Has it?
I'm searching around and not coming up with much that says that's the case.
On the other hand, here are some recent-ish links that suggest it still works:
- https://www.rd.com/article/why-prices-end-in-99/
- https://capitaloneshopping.com/research/pricing-psychology-s...
This one suggests it depends on the consumer, with "highly numerate" consumers being less likely to think the price is lower (but presumably also less common in the customer pool):
- https://business.missouri.edu/about/news/99-ending-prices-ar...
Edit: searching for "charm pricing" specifically suggests it does work, but I suppose maybe there's some bias on the context in which people use that term.
Ikr? It's like everyone thinks "It is simply not possible to set a price on an item so that its total price is a nice round number after tax is applied! One would need to... invent a special kind of math to do that!"
It's like the whole country is unwilling to calculate 1.065x=$2 or whatever.
And... why not include tax in the display price? I never did get a good explanation for that.
Debasement through inflation steals from workers, pensioners, and savers. On the other hand, its great for big business and big government.
The money illusion fools many people into believing they've gained (ie real estate) when in reality, they've lost purchasing power.
https://en.wikipedia.org/wiki/Money_illusion
penny-rounding “imposes a tax of $3.27 million Canadian dollars from consumers to grocery stores on a yearly basis in aggregate
https://economics.ubc.ca/news/penny-rounding-profitable-for-...
eliminating the penny would require producing more nickels to “fill the gap in small-value transactions.” But nickels suffer from a similar “seigniorage” problem: the 2024 U.S. Mint report said the five-cent coins have a unit cost of 13.78 cents each.
https://time.com/7215870/trump-us-penny-mint-costs-one-cent-...
i think ~5 cents per capita is a fine price to pay to never have to think about pennies again
I remember going to the drugstore and buying two pieces of candy for a penny each. I added a third for sales tax. The cashier handed back the penny because the tax didn't kick in until 10 cents.
Finally!
Here is a delightful article from NYT from last year on this topic. Truly fascinating and bewildering.
https://www.nytimes.com/2024/09/01/magazine/worthless-pennie...
> Finally... NYT from last year... Truly fascinating and bewildering
Yeah, really bewildering, happiness inflated by inflation.
> When Robert Whaples, an economist at Wake Forest University, published an article in 2006 about the imperative to eliminate America’s 1-cent coin, he received a personal note: “Get it done, and you will deserve the Nobel Prize!”
Everything makes sense now...
The last ever American penny (as the article text clarifies). Don't any other countries with a "dollar" use the same name for their 1-cent pieces?
> The penny costs nearly four cents to mint, more than the coin’s worth.
Wow. I think it was only something like 1.5c (in the local market) when Canada gave up on them.
The mighty penny is dead. Long live the penny!!
I have a couple glass jars full of pennies. I think I'll just give them to the thrift store.
I wonder how long of not minting new pennies it would take for the average collectible value of the existing stock to reach break-even again.
I feel like pennies fall out of circulation at a very high rate compared to other denominations.
Our money is being depreciated at a rate of 3% per year and up to 25%-30% during the last inflationary cycle and is now to the point where coins are nearly useless. At the current trajectory, the one dollar note will also be obsolete in our lifetime.
Hmm. I actually still like coins and paper money. However had in the EU, I don't like the 1 and 2 eurocent at all. These are just pointless really. I'd like a 5 euro coin and a 2 euro paper instead.
Can't retailers just price everything to the nearest $.05 to begin with so there is nothing to round? I guess tax percentages screw that up. Nevermind.
Step one: make all items cost an even five cents after tax. step two: when making price adjustments like discount, round the effect to the nearest five cents. Step three: charge everyone this amount
But if 99 cent stuff costs a dollar, sales will plummet.
My country quit using our (then) lowest denomination coin 32 years ago. Also worth 1/100 of a USD.
I've got a ridiculous question, but hear me out.
Pennies have more zinc in them than they are worth, right?
Did the penny have any sort of stabling force against inflation… a sort of "Zinc Standard" as it were?
Civil libertarians are always talking about how moving away from gold coins, and later moving away from the gold standard that backed the non-gold coins is the root of inflation.
If gold can have such an effect, why not zinc?
You can't legally melt down US coins for their metals
Even so, it has intrinsic value. A gold coin wouldn't become worthless just because the government stopped you from melting it. Same goes for a zinc coin.
Many are reporting this as if failing to mint new pennies each year is going to produce some kind of shortage. There are billions of pennies sitting in drawers or jars in homes across the nation (I certainly have one with about a thousand pennies in it).
I doubt anyone who needs a penny will be unable to find one within the next 100 years.
There's a cash-heavy business I work with that's already having a hard time sourcing the pennies they need. I guess they're all in a jar under your desk.
It seems to me that if there was truly a shortage of pennies, banks could offer to pay 2 cents for every penny someone turned in (still far cheaper than minting a new one) and enough people would pull out their penny jars and cash them in.
Now we've unlocked a new lucrative business model where we can cut the customer out entirely! Simply buy pennies from the bank on the dollar and sell them back for 100% profit...
That...actually seems economically sound, but it's also a strong argument for the idea that pennies are effectively worthless.
I have a hard time believing any business relies on access to Pennies when all cash transactions can be rounded to a nickel in some way amenable to both parties. I imagine most customers just don’t give a damn.
I'm pretty sure they're considering doing this, but I don't know what all the pros and cons or complexities are.
> I doubt anyone who needs a penny will be unable to find one within the next 100 years.
Based on my experience with the universe, this ability of being able to find something whenever you need it, only happens until you start expecting it and when you really need it, you're not gonna be able to find it anywhere. Maybe "Murphy's law" isn't what I'm looking for but something similar? For when what you really need is no longer there, universe always works against you? Can't recall.
Selective attention or confirmation bias with a hint of cosmic irony?
I don't know how accurate this is, but someone posted on Reddit some Burger King is already having a hard time getting pennies from their bank: https://old.reddit.com/r/mildlyinteresting/comments/1opdlm2/...
Most of the stores in my area have started requiring people to pay with exact change or by card because they can't get pennies to make change.
Personally, I think stores should just start setting prices to avoid the need for pennies, but that would be too easy, I guess.
Setting prices to avoid the need for pennies is probably technically challenging given the combination of requirements to post prices and sales taxes that don't always round the same way.
If the effective tax rate is 7.432%, you can price single items so that the price plus tax ends up in a multiple of $0.05, but if you get a purchase with multiple items, you either need to round somewhere or post prices that are like $9.346263437.
For example, $0.93 * 1.07432 = is $0.9991176 exactly, which rounds to $1.00. But if you buy a dozen such items then $0.93 * 12 * 1.07432 = $11.9894112 exactly, which rounds to $11.99.
Imagine a world where they just posted the price you would pay at the register on the shelf instead of some number that is ~93.082% of the price you would pay.
I know it's hard to imagine the price on the shelf being the price that you pay, but I believe it is possible even in complex tax situations.
I live where there is no sales tax, so it's not hard to imagine!
But good luck convincing every state, county, municipality, and other weird governing body that requires something other than that and also collects a weird sales tax.
Or go with the solution that papers over all that nonsense: a flexible and maximum $0.04 per purchase discount.
What if businesses issues their own penny coupons that could be used in future purchases? If you bought from there regularly you'd on average only have a couple of them.
This is what happens when you wish on a monkey's paw to get rid of pennies.
I mean it's not on the state, county, municipality, or weird governing body to put the prices on the shelf at the store. Nation wide advertising might be different (is that still a thing? There were always asterisks that made a dollar menu not always a dollar anyway), but the literal price on the shelf / menu / ... at any given physical building could price things appropriately for the physical location that they are on.
I live in a place with a fixed VAT (that is included in the price on the shelf / menu / ...), but grew up in the US in several different weirdly taxed localities. It's just such a silly argument to say "we can't write the correct price on the shelf because the laws vary." The register knows the correct price, the labels on the shelf are computer generated, and updated regularly. The labels at many nation wide fast food type places are displays anyway.
If Baarle-Hertog and Baarle-Nassau can make it work I feel like it's at least imaginable that stores that already automate this weird complex tax code could print accurate labels instead of inaccurate labels, with an accurate calculation at sales time.
Good point. I forgot about sales tax. That also seems fixable by adjusting tax law, but adjusting law is always more hassle.
sales tax should be charged per item, not for the total transaction, so that it's possible to list prices that include the sales tax.
Sales tax varies by state/county/city. It is generally not cost-effective to have each individual store label all their products with local sales taxes applied.
I see this excuse all the time, but why not? This calculation does not need to happen more often than the product prices are adjusted. There's no difference in effort between labeling something "$5.52+tax" and labeling it "$6".
The difference is where the product is labeled. Is it labeled nationally like Arizona Iced Tea? Is it labeled at a regional bottling facility? Or is it labeled at the store itself? And what about when tax rates change, you gonna go pull all the labels off everything in the whole store and update them?
Most of this could be resolved by not putting the prices on the products themselves, but that isn't as good of an experience for the shopper.
> Most of this could be resolved by not putting the prices on the products themselves
That is already often the case. Prices are usually on the shelves not on the product itself at many stores. And when purchasing online there is no reason that the sales tax couldn't be included in the listed price.
Also sellers could just charge the same price everywhere and take the sales tax out of the revenue.
It generally is, or at least per category of items. Different items can have different (or none) sales tax rates.
If your sales tax rate is 8.875%, what do you price a banana at to avoid change?
This problem is easily solved in countries that use VAT
You price it including sales tax. Sticker price is final price.
If someone is buying a banana for resale, or buying with WIC or SNAP benefits (among other things), they would not owe sales tax. So if the price included sales tax, the sticker price would not be the final price.
You do not know the final price until you know how they are paying for it, what they are using it for, and when they are buying it (among other things).
Falsehoods programmers believe about sales tax (among other things).
Then that discount can be deducted by the cash register when it's time to pay.
$10
It isn't that simple. There are stacked tax jurisdictions that can change their fraction of the tax independently. Some of those taxes are conditional at point-of-sale so the exact rate varies from customer to customer.
It is a mess but also not easy to unwind or patch over.
A penny contains about .6 cents worth of zinc, so this was going to happen sooner or later.
If only Trump could get the daylight savings and the metrics system updates done too.
Russia eliminated all kopeck coins years ago and anyone hardly noticed. Seemingly the only place you could still see any is a bank. Retailers usually round down to whole rubles if you're paying in cash.
It's been useless baggage for decades. The even saner approach would be to fade-out an order of magnitude of currency every century. The math checks out.
IMO:
1: The price posted should be the price you pay. (Include all taxes, fees, gratuities, ect.)
2: The price posted should be a multiple of $0.05, $0.10, or $0.25
Problem solved.
Penny-wise and pound-foolish.
As much as there's a lot of reasonable arguments for ending the minting of the penny, the method in which this president waves his hands and fundamentally changes things such as our White House, our currency, our trade policies, our universities leaves me with a bad taste in my mouth and it's hard to support even sensible decisions this authoritarian regime makes.
This is a very minor but pleasant surprise. An action like this is beyond what I thought the US government (my government, sadly) was capable of. It is kind of puzzling to me that this issue, like every other one, didn't get politicized, with right wing talking heads bemoaning progress of any sort, appealing to the good old days, when America was great, the days that MAGAs want to return to.
It's a good start. Now let's do metric.
The fact that you'd need to even mint them in 2025 is mind boggling. Why isn't there a law that stops minting coins that cost more than their values? You'd think they would have figured this out by now?
Did anyone ever make a simulator for pennies hitting the floor like in the top video?
> The penny costs nearly four cents to mint, more than the coin’s worth.
To be clear, coins and bills are used far more than once.
I would even go so far as to say they are re-used hundreds of times.
The argument that we should stop minting them because they cost more to produce than their face value falls flat for me.
A penny is not a single use item. The cost of production must be depreciated across the thousands of transactions in which it is used and then compared to the economic benefit of its existence.
It may be true that the economic benefit of a penny is less than the production cost but I don’t see anyone making that case.
What will it actually cost the US economy to stop minting these coins?
How long will they remain in circulation until they are no longer accepted for payment?
I'm now seeing signs in stores begging people for exact change due to a "penny shortage"
Seriously? You can't give up 4 cents per transaction to round to a nickel? Fuck, round it up for all I care, 5 cents is worth approximately nothing today.
I’d give you my 2c on the matter but now with the scarcity of a penny I’m not sure how to calculate the value.
I, for one, favor having a .1 cent piece, a third the size of a penny about the size of a shirt button.
Because San Francisco sales tax is 8.63 and something the costs 1 dollar is really 1.083. And I would like 91.7 bach cents when I give 2 dollars.
Oo, I'd like to get a roll of these. But I live in Norway.
We should mint ₥ills. Really lean into useless currency.
https://wikipedia.org/wiki/Mill_(currency)
In other countries that have eliminated pennies, was it done with more planning and advice from the government?
It strikes me as uniquely American (perhaps uniquely Trumpian) to just stop making them and let whatever happens happen with no detailed planning.
That seems weird. I mean, if you decide to abolish the penny, you just do it cold turkey. You don't set a date in the future and the continue making them, so that the last penny is accompanied by fanfare.
> Trump announced via social media in February that he instructed the Mint to stop making the once-popular coin, citing the cost of production.
So between February and today, they just ignored the order?
What justified the pennies produced between February and November? Those pennies were necessary, and still cost-effective, but going forward, the penny as such is no longer necessary?
> the final coins pressed will be auctioned off and that the actual last pennies put into circulation from the US Mint were struck in June.
Seems like this is a stunt to extract a bit of money from collectors. I kind of wonder if collectors really value coins/stamps/etc. that were specially made to target the collector market and didn't even exist in the natural world. Feels icky.
"Last-ever" seems premature to me. I don't think the odds that there's a redomination or Trump decides he likes pennies are that low
And the people rejoiced!
When will they create a $200 bill or bring back the 500? I feel like the 50s is the new 20.
so its an NFT now???
Nick Mullen should be the guest of honor at this event.
Ha, didn't expect to see a comment about Mullen on HN. Saw him live in Boston a few months ago. Very cool to see the C-Town boys blowing up in popularity.
Can we stop changing our clocks twice a year as well?
There's something about getting rid of Honest Abe on coinage that seems... sadly appropriate for the current climate.
At least he's still on fives.
So Obama wanted to wanted to ban the penny, but it was deemed illegal to do so and efforts to get rid of the law requiring it did not pass:
* https://www.washingtonpost.com/nation/2025/02/10/trump-us-mi...
* https://www.local3news.com/obama-wants-to-retire-the-penny-b...
It's not that keeping the penny around is (necessarily) a good idea, but that there are, you know, laws, and people (including the President and cabinet folks) should kind of follow those laws. So has the law been amended to not require the minting of the penny anymore?
* https://abcnews.go.com/US/trumps-order-scrap-penny-make-cent...
* https://www.npr.org/2025/02/10/nx-s1-5292082/trump-penny-min...
Is there some 'new interpretation' that has been 'found' that allows Sec. Treasury to not mint pennies? Or is this change one made by fiat / executive order?
* https://en.wikipedia.org/wiki/Penny_debate_in_the_United_Sta...
There's only semi-consideration been given to this; the retailers want official rules passed on how round should be done
* https://www.rila.org/focus-areas/finance/main-street-busines...
For example, one subtly:
> Ensure rounding for cash customers does not violate terms of the Supplemental Nutrition Assistance Program (SNAP). The SNAP program sensibly requires that SNAP customers cannot be treated differently than other customers.2 These provisions prohibit treating SNAP customers less favorably or more favorably than other customers. That means that rounding the price of food for a cash customer in either direction risks creating a violation of SNAP regulations for stores that participate in the SNAP program.
My understanding from something I read months ago - its a new interpretation. Specifically the law instructs the gov to make as many pennies as is necessary, but does not define what that is or how to calculate it. If the government deems necessary = 0, then you dont need to make any more.
Since the law is still on the books its still legal tender, and production may restart at any moment.
You already know the answer.
That was before Trump v. United States (2024)
to my knowledge the legislation only says that the executive branch needs to make the "necessary" amount of pennies. the argument is that because they're losing money literally printing money that the "necessary" amount is zero and that therefore doing this follows the law because zero is an amount.
I don’t understand why it costing more than face value to mint is such a bad thing
A better measure, assuming that pennies facilitate value exchange[1], would be whether the cost to mint a penny exceeded the marginal increase in GDP[2] due to having that additional penny available.
[1]: This assumption may not be true; if they're worth so little that people lose track of them, they could actually make it harder to exchange value.
[2]: Making the GDP higher is also a very debatable measure, but I think this generalizes to other dollar-denominated measures of prosperity.
I would prefer if we do not spend billions of dollars each year on pennies when we could do something actually productive with that money.
People do not reuse pennies. They are lost and forgotten about much of the time.
This is one of the stupidest comments I have seen on the internet bar none. Wasting money is bad. I should not have to explain further.
A penny is reused over and over again, every time it changes hands. It’s not necessarily bad that it costs a few cents to make one if it has utility.
It costs more to make a ceramic mug than it does to fill it with coffee. That doesn’t make a ceramic mug uneconomical, because it’s used lots of times and the cost amortizes.
...Having said that, I don’t think there’s actually much value to having an individual token of exchange that signifies as little value as a penny does - it would be a good idea to stop making them even if they cost far less to make than they do.
The president is now immune to obeying the law and can pardon all of his stooges.
These are the types of comments people start making when they've been mindkilled by politics.
Apropos: https://www.youtube.com/watch?v=F8R5QCPUqaI
Finally, can we next stop making dollar bills and add a two dollar coin.
we don’t have “pennies” in the EU anymore
Good. BYE. lol.
The mighty penny is dead. Long live the penny!!
could get rid of dimes and nickels as well.
Yes. I used to work at a movie theater, where all transactions were to the nearest $0.25 because it made it easier for the kids like me behind the counter to count the change and not lose track... seemed sensible at the time and that was 20 years ago.
It would be cool to remove the hundredth place in general; just dimes and half dollars, although I don't see that happening any time soon
Honestly nickels and dimes, and maybe even quarters, should go too. It's ridiculous that we don't have $1 and $2 coins in widespread circulation in the US (we have a $1 coin but nobody uses it).
Quarters might be premature, but the half-cent was discontinued when it was worth a (modern equivalent) of $0.12-17. Even 20-30 years ago, when I was just starting to interact with money enough to have an opinion, I thought it was a hassle to deal with anything smaller than a quarter. The same logic behind getting rid of pennies (they cost more to make than the face value) also supports doing at least nickels.
> The same logic behind getting rid of pennies (they cost more to make than the face value)
I've honestly never understood why this is a valid reason to object to the coin. Coins aren't used only once, so that they cost most to make than their face value doesn't seem very important, unless the differential is much, much larger than it actually is.
I get what you mean, but the Mint does "sell" currency in a sense, so it's not a terrible point to make. It also serves as a decent benchmark for the "should we even bother" aspect; should we lose money by literally making money?
We also have a $2 bill that nobody uses for whatever reason.
I never understood the objections to the $1 coin, especially after the redesign to make it more distinct from a quarter. $1 coins are great for buying stuff out of vending machines since you don't have to fight with a dodgy bill acceptor or a mangled bill.
My only real objection I guess, and the reason I don't carry change of any sort, is because it's constantly falling out of my pockets. I'm rather tall, so many seating positions put my knees higher than my waist, which I think contributes to that.
Further, since I don't have enough pockets to have a dedicated change pocket, it's always getting caught up in my keys and/or pocket knife.
Nobody really gave us training on this stuff, do other countries use a coin purse or some such?
Lastly, they're just comparatively heavy.
I just carry cash around in either a clip or a "front pocket wallet" I think they're called, and it seems more convenient all around.
> Nobody really gave us training on this stuff, do other countries use a coin purse or some such?
Americans also use coin purses or rubber coin pouches, but I mostly only see older generations using them.
This was a whole thing in the 70s. There was a 3 step plan:
1) Bring back the $2 bill (it had not been printed for a decade+)
2) Redesign the $1 coin (Eisenhowers being too big and heavy)
3) Stop printing $1 bills
Unfortunately they never got to step 3, which made 1 and 2 pointless, and here we are.
Yeah. My proposal would be to have 10 cent, 50 cent, and $1 coins (rounding everything to the nearest 10 cents), with $2 the smallest bill. And probably you could drop the $5 bill at that point.
There's a lot of physical infrastructure that works with quarters, and it's probably not worth giving that up for slightly improved coinage. Just drop all the coins smaller than a quarter.
There's also the 3rd amendment. It would be worthless to say soldiers can't demand change for the vending machine, when nobody at all can get quarters.
There's a lot of physical infrastructure that works with quarters
Very good point and I think I'm convinced.
That only works if you completely reconfigure sales tax
> We also have a $2 bill that nobody uses for whatever reason.
It’s because retailers wont accept them - they think they’re counterfeit because no one uses them. A catch-22 situation, really.
I've never had a retailer refuse to accept a $2 bill, although a couple of times the clerk summoned the manager about it.
But I've never found a retailer willing to give a $2 bill as change.
The resistance to the $2 bill is a very weird cultural thing.
> But I've never found a retailer willing to give a $2 bill as change.
Mostly retailers don't stock $2 bills (because they're weird), so if a customer brings a $2, the cashier will put it in their their exceptional bills area, which usually is just large bills. No change is made with exceptional bills, so twos don't get recirculated.
Dispensaries in OR/WA love $2 bills, for some chains they're as unremarkable as a $1 and must special request them in bulk to keep on hand for making change.
Sorry Europe and Canada, $1 and $2 coins are just absolutely terrible. I never want to have to think about where my change is. Bills are much lighter than coins and stack with the rest of the bills.
I want to get rid of bills and move to only coins. We can carry coin pouches and act like a medieval/fantasy novel character.
IMO best would be some kind of money where you could physically break a given piece of cash into two pieces of half the value.
When I was in Japan everything was all-cash and the smallest bill was the equivalent of a $10, with equivalents to $1 and $5 coins being in common circulation. Most wallets they sold/people had had a coin pocket to account for this.
Nickels and dimes certainly have predecent. When the US killed the half-penny in 1857, it had a purchasing power of somewhere around 19 cents from 2024.
Used to use dollar coins at toll booths all the time. That was before ez pass
Honestly I'd rather just not have coins at that point, rather than try to push $1 and $2 coins. Then I can just carry my wallet for bills and not have to worry about keeping track of coins separately.
Gotta do something to make the $2 bill popular though, no idea how.
At least nickels should go so we can always round by one digit.
I'd mourn the loss of the quarter. I use those quite often.
> (we have a $1 coin but nobody uses it)
Because they keep designing it in the stupidest way, making it easy to confuse with a quarter. I don't know why they do that.
That said, I do prefer paper $1 bills over coins. Paper is lighter and easier to carry. But I'd only slightly grumble if we replaced it with a reasonable coin.
> That said, I do prefer paper $1 bills over coins. Paper is lighter and easier to carry.
Sure, but how many $1 bills do you typically carry around? If it's more than four, then you can trade them in for a $5 bill just about anywhere.
It's a completely different color than a quarter.
That doesn't help if you're in dim lighting or have vision problems.
If you have vision problems, US currency is totally unfriendly to you. Unlike other countries, which have bills of different sizes, all the US currency bills are the same size, so getting change as a blind person is basically relying on the honesty of whoever is behind the counter.
Absolutely true. It's one of the several crazy design problems with US paper currency.
That's why the dollar coin was redesigned in 2000. The old dollar coin had a reeded edge that was too similar to a quarter, so it was sometimes hard to distinguish if you had vision issues (or if you didn't have vision issues because they were about the same size as a quarter). The new ones have a smooth edge so you can tell them apart from quarters without having to look at them
True, and the new design is better than the old because of it. But it hasn't resolved the issue enough to really matter. Some less subtle physical difference is required -- put a hole in it, make it an obviously unique size, whatever.
At least that's how it seems to me. It's an interesting design issue. I don't personally care too much -- I'm fine with the paper bill -- but I do have curiosity about why the coin designers have made the decisions they did about the $1 coin.
That would explain why 1% of people don't use the $1 coin. It doesn't explain the other 99%.
99% of people have Darkvision? What is this, a D&D party?
Yeah, since I often buy things with cash in places that are so dark I can't see the coins that's a major consideration for me. JFC what planet do you live on?
If your fingertips can sense the color of things in your pocket, I'd love to learn more.
Bring back the Eisenhower dollar!
Well no, apparently ANY President now has almost ANY power
so the next President could order a new penny made with their face on it
sure they could, look at the east-wing and tell me what limits of power a President has
Any Republican president maybe. The Supreme Court and a Fox media circuit would never let the opposition ignore congress like this.
I'm a little worried this will encourage vendors to increases prices up to the next 5 cent mark, which will cause inflation that we really don't need more of right now.
Gas stations price to the tenth of a penny per gallon. There is no 1/10 cent coin. Works fine.
That's because the law requires them to charge that extra 9/10. It's silly.
It doesn’t require it. There may still be (I dunno) fixed per-gallon taxes in the tenth-penny-per-gallon range, but stations aren’t forced to handle it the way they do.
In Canada, most prices still end in 99. You still pay to the cent if you're paying with a debit or credit card, which the vast majority of customers are these days.
This has not been an issue in Canada. There is sales tax, which basically randomizes the last digit.
Many countries eliminated their pennies without chaos or unfair burdens on shopkeepers. In Canada, the process was widely popular after the fact even though newspaper articles prior to the elimination intimated it wouldn't be due to their "both sides" style of reporting.
It's indicative of the current US administration that they managed to screw this up despite many examples world wide of how to do it properly.
Unfair burden?? I think you’re blowing this out of proportion..
Credit card fees are 2-4%. Rounding to the nearest nickel costs at most $0.02 (1,2 round to 0; 3,4 round to 5)
It is cheaper for the merchant to round to the nearest nickel for any transaction of one dollar or more than it is to pay CC merchant fees.
It costs on average 2 cents because without legislative authority to round to closest the retailer must round down and eat up to 4 cents of difference.
Cash costs retailers money too. Safely transporting it to the bank, et cetera. For many, cash is more expensive than credit cards.
> Cash costs retailers money too. Safely transporting it to the bank, et cetera.
Yes, and now they won't have to incur that cost for pennies.
They can reprice items to minimize rounding
If you believe this is going to cause chaos or significant burdens on merchants I have got a bridge to sell you (but I don't take pennies). This quote tells you all you need to know.
> The government’s phasing out of the penny has been “a bit chaotic,” said Mark Weller, executive director of Americans for Common Cents. The pro-penny group is funded primarily by Artazn, the company that provides the blanks used to make pennies.
The same thing happened many years ago with the same company (previously called Jarden Zinc).
> Americans for Common Cents is a non-profit lobbying group dedicated to the protection of the one-cent coin. The group is primarily interested in preserving the penny for economic and historical reasons. In 2012, Executive Director Mark Weller was paid $340,000 by Jarden Zinc to discuss issues relating to minting with members of Congress and the US Mint.[41] Weller has acknowledged this funding, saying that “We make no secret that one of our major sponsors is a company that makes the zinc ‘blanks’ for pennies."[42] Weller has testified on multiple occasions before Congress. In 2020 Weller testified that the use of cash protects privacy, provides economic stability and "is a public good" that should not be replaced by mobile money.[43]
> even though newspaper articles prior to the elimination intimated it wouldn't be due to their "both sides" style of reporting.
No idea what you're talking about here. This isn't a left-vs-right issue, and journalism gave the concerns approximately the attention they merited.
> It's indicative of the current US administration that they managed to screw this up despite many examples world wide of how to do it properly.
No, it's indicative of problems uniquely caused by existing American governance and law. When we did it, we didn't have an issue analogous to the one with SNAP payments described throughout the thread, because our welfare programs don't work that way and our legal code isn't designed to enable the same kind of future pedantry. Besides which, the Biden and Obama administrations (and others before them) didn't even attempt this as far as I'm aware, despite that the US penny being costly for quite some time. (As far as I can tell, the current cost is mostly not due to the cost of the base metal, which is almost all zinc since 1982. Checking commodity prices and doing some back of the envelope math, switching back to copper would cost them an additional two cents per penny.)