Personal Finance, Shopping

Should The Penny Go?

pennies in a wishing well

Pennies made the news this month, as they now cost more than their value to mint. (Nickels do, too.) These costs are blamed on the rising prices of the metals used to make the coins, so theoretically, you might be able to melt down a pile of coins and sell them for more than their face value. (Before you run to the smelter’s, read this article to see why it’s not practical to do so.)

The government’s proposed solution to the high cost of minting pennies and nickels is to change the composition of the coins to less expensive metals. However, some would rather see pennies be eliminated completely. These people have some valid arguments backing them up:

1. A penny has little value and little buying power, especially compared to what it had a century ago, when a first-class stamp cost two pennies and a loaf of bread cost a nickel.

2. Today, anything that costs less than a nickel, such as a minute of telephone communication using a phone card, is sold in multiple units. It’s a rare event to go into a store and spend only two or three pennies. (When it happens, it’s usually because of coupons and discounts.)

3. Coins are heavy and take up more space than paper money worth the same amount. Pennies are the biggest offenders, taking up far more space than they deserve.

4. Perhaps because of the weight of pennies, people tend to hoard them. This tendency was blamed for a penny shortage several years ago. By eliminating pennies, people are more likely to keep their change in circulation, and the mint would not have to make as many coins.

5. Eliminating pennies will save the government the time and money spent minting them.

6. Abe Lincoln already has the $5 bill; he doesn’t need a coin in his honor, too.

7. Counting change takes time, and not having to count pennies would take less time. In fact, the students who recently used pennies to pay for lunches in protest of their short lunch periods might not have been suspended had they been forced to used nickels.

On the other side of the coin (pun intended), pennies have some strong advocates, as well. The website of Americans for Common Cents cites polls that say most Americans want to keep the penny. Pennies are too popular to be ostracized, they say. Beyond popularity, there are other arguments for keeping the penny, arguments as legitimate as those for eliminating it:

1. Eliminating the penny would cause price increases or, at the very least, the perception of price increases. While stores would be able to keep prices ending in cents, most would tend to round prices up. For grocery shopping and other trips that result in many small purchases, even a penny increase on each item would result in a noticeable price difference.

2. For stores that keep pricing at amounts between nickels, eliminating the penny would require people to pay by check or credit card if they want to pay the exact amount they owe. Paying in “exact change” will be impossible.

3. While some stores would round to the nearest nickel, others would automatically round everything up. Some customers would fiercely resent those stores’ practice of rounding up. (Of course, some stores could court new customers by rounding everything down.)

4. Charities that conduct “pennies from heaven” campaigns or rely on change in wishing wells and fountains for donations would see a decrease in funding. Because people value pennies little, they are likely to donate them when asked, even if they wouldn’t normally donate to the requesting charity.

5. Phrases like “pennies from heaven” and “pinch a penny” would fall into linguistic obscurity. Penny folklore and traditions, such as picking up a penny for good luck or making a wish when throwing a penny into a wishing well, would eventually be forgotten. Brides would have to find something else to put in their shoes.

6. We would miss out on a lot of fun.

7. Though it’s already nearly impossible to find, penny candy would definitely be a goner.

Both supporters and detractors of the penny argue passionately for their sides of the debate. Supporters currently seem to be winning, though one day — maybe a just a few years down the road, when even an Atomic Fireball at the old-fashioned candy store costs $1.00 — pennies will most likely disappear from our culture. In the meantime, enjoy those bits of copper (or copper-colored steel, if the Coin Modernization and Taxpayer Savings Act of 2008 passes) in your pocket.

Image courtesy of ButterflySha

15 thoughts on “Should The Penny Go?

  1. The penny is the most ridiculous thing in the world. They are so worthless that I throw them away. I know that people are going to say that every penny counts, but it just gets ridiculous. The value of the deposit on cans is worth more 10x that of a penny and everyone puts them into recycling bins, so why is a penny any different? Especially since it is our taxpayer money that it costs to make them.

  2. “While stores would be able to keep prices ending in cents, most would tend to round prices up.” This is not true. Something that costs $4.99 would now be $4.95 not $5.00. I know retail VERY well and this is the way it would go.

  3. I’m not sure what all the fuss is about keeping the penny. We used to have a half penny and we got rid of that. If it no longer makes sense to produce them since they cost more to produce them than they’re worth, I say get rid of them. The same is true for the nickel – get rid of it too.

  4. It is a rare event when I pull out the cash, much less going looking for a penny in my purse.

    The penny really isn’t that necessary. My son can’t even use it to buy penny candies — he’d need at least a quarter for me to let him choose anything anyway.

    Down with the penny! We can at least cut back on government waste SOMEWHERE…

  5. All people that throw away pennies are stupid and financially irresponsible. Go ahead and I will gladly pick them up. I get an extra $50 a year picking up coins that people drop and don;t care to pick up. Money is money and 100 pennies is just as good as a dollar.

  6. I personally think we should keep the penny. Yes, I am in agreement with the other posters that the penny isn’t worth much these days, but I think we have a much greater issue: government mismanagement and inflation. Getting rid of the penny is an easy way for us to ignore the real problem, inflation. The question that I think we should be asking is how can we restore value to the penny? What are we doing to stop inflation and the dropping dollar? As someone trying to save money, I hate to see every dollar I save worth less and less over time. Every so often I will go to the bank and pick up a $25 dollar box of pennies. It’s a fun rainy day activity to sort through them. The pre-1982 pennies are actually worth over 2 cents due to their copper content. This is an instant way to get 100% risk-free returns on your investment, but again more of a hobby than anything else. In the long run, if inflation keeps ramping up, this hobby may turn out to be quite profitable. 🙂 In conclusion, let’s keep the penny and address the real problem at hand.

  7. If they get rid of the penny, what is going to happen to all those machines that squash pennies into historic landmarks at tourist spots?

  8. Yeah! let’s get rid of the penny instead of addressing the real problem, inflation and non-asset backed currencies.
    You will never hear anyone say, “let’s get rid of the 1/10th oz. gold coin, it’s worthless and a hassle”.
    It makes me sad when I think about how retarded we Americans are sometimes.
    If a currency is worth less than the materials required to make it, that should be a real clear sign that the currency is FAR TOO DILUTED.

  9. perhaps the penny and even the nickel being worthless will be a wake-up call for people. Inflation is a hidden tax. When the govt. decides they need money they borrow it (at interest) from the Fed, and the fed just cranks up the printing presses. Every dollar that is printed steals value from the ones in your pocket, because it is impossible to create wealth out of thin air.
    everyone needs to look at this:

  10. I personally would NOT like to see the penny go. Aside from it being the inspiration for my blogging pen name (Penelope Pince) ;), it is sad to see tradition and longstanding elements of our past disappear. As children, many of us enjoyed collecting pennies and counting them, and they played a role in our early financial education and learning the value of money.

    Those who throw away pennies are not only wasting their own money, but contributing to the inflation. If those pennies aren’t thrown away so frequently, the government wouldn’t have to mint more.

    We don’t need yet another excuse for inflation. Prices are going up quickly enough as is. I shop for groceries once a month and notice significant price increase each month. The worry that everything will cost more next month makes me want to hoard and buy as much as possible this month.

    My sister just posted an article this morning, Homemade Coin Bank for Saving Wayward Coins, about saving spare change and with instructions for making yourself an attractive coin jar. We counted all our accrued change last night and came up with $18.90. So, yes, a single coin isn’t worth much alone, but a few at time over time does add up, and more quickly than you might think.

  11. What about taxes? They would round up to cover taxes. Therefore, your paying more. I say use a different metal and find a way to add value to the penny. All our money is currently losing value and in another 50 years they will want to get rid of the nickle. Everything is inflating like crazy. Plus, if you throw away ANY kind of money, including the penny, then you are only contributing to this economic decline by your wastefulness (if you throw away pennies how do you treat other items?) Some people should just pull their lower lip up over their head and swallow!! LOL!!!

  12. common big part of this country is what Abraham Lincoln did for us.
    the least we could do is keep his spirit at least worth a penny.
    we do use the penny, every day of our lifes.
    yes lets say if you bought a bunch of items, then added in sales tax, you’d have a 50-50 shot at getting price of, say, $15.82—which would round down for saving two pennies.

    and keep in mind a penny is MONEY!!!

  13. Why would you throw away Pennies? It is such a foolish thing to do. Get an empty jelly jar, throw all the Pennies you come in contact with into that jar, and when you go to the bank, deposit those Pennies! It is practically no hassle, and as much as you want to dismiss this fact, Pennies DO add up over time. Also, what a lot of people ignore is the fact that the metals used to produce Pennies are already bought by the government, wether or not the government mints the Penny or not. The rounding tax will definitely be an issue, also. Businesses will be much more limited on how they can price their goods and services, they would have to make the choice of rounding up, or rounding down. This rounding tax may not mean much to you, but it really can have an effect on the poorer community. Finally, all logic aside, the Penny is just too traditional and is embedded into our culture to just stop making it. Coin jars would look quite bland without that distinctive Copper color. We would stop throwing our Pennies into the wishing wells, and you would not get good luck as much by finding the Penny on the ground. There are other countless cultural examples, too. Maybe one day, when the world becomes a different place, we can get rid of the Penny. However, for now, the arguments for elimination just aren’t strong enough, and the arguments for preservation are too strong. The Penny is here to stay, and it is a really cool coin!

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