What's the future of the US penny?
Some countries across the world have eliminated low denomination coins, Canada being one of the most recent examples. Just several months ago, the Canadian government made the move to stop one-cent coin production as the penny became too costly to make and few consumers saw the point to using the coins any more.
However, this debate isn't just occurring in other countries - it's gaining ground domestically as well. For years, groups have advocated the elimination of the penny, claiming it is far too expensive to produce, forces businesses to waste more time counting cash drawers and is quickly becoming irrelevant with today's customers. With individuals and organizations pushing to get rid of the penny, the U.S. could see major coin changes in the coming years.
Pro-penny groups slam attempts to ban coin
While some are eager to stop penny production and get the coin out of circulation, others, such as Americans for Common Cents, are quick to counter such attempts.
"Such a move would remove the image of one of our greatest presidents, Abraham Lincoln, from public view in our circulating coinage and harm consumers," said Mark Weller, the group's executive director.
The group also claims penny elimination could hurt consumers, especially lower income families, who tend to use cash more frequently. Because businesses would round to the nickel, those engaging in cash transactions would be forced to pay more than their counterparts using credit or debit cards, placing an additional financial burden on those who can least afford it.
Instead of getting rid of one-cent coins entirely, the group has suggested the United States Mint make the coins more cost effective. Pennies cost more than twice their value to make, posing a serious problem for the government, which is already burdened with high debt loads. The penny is currently made primarily of zinc and investigating less-expensive metal options could be a solution to bringing creation costs down, according to Americans for Common Cents.
Some groups advocate penny elimination
One of the biggest reasons many are stressing the importance of phasing out the penny is the coin's expensive production. While pennies are only worth one cent, they cost 2.41 cents to produce. The government's gross cost of penny manufacturing last year was $116.4 million, making it the most expensive of any U.S. coin. As material costs increase, the penny production could become even more costly in the future.
In recent years, people have attempted to pass legislation that would phase the penny out. According to NBC News, former U.S. Representative Jim Kolbe tried several times to introduce a bill that would have eliminated the one-cent coin by having businesses round to the nearest nickel when dealing with customers paying cash. Military bases overseas already round cash purchases in this manner to avoid pennies.
Even President Barack Obama recently voiced his opinion on the penny in a Google+ Hangout, though he admitted that with all the major issues facing the country, Congress may not be able to get to the legislation necessary to eliminate the coin.
How will this impact businesses?
Whether the penny stays or goes, debate will continue to linger and companies could see a change in how they deal with cash transactions. Keeping the penny will mean companies will need to invest in a commercial coin sorter that will allow them to continue efficiently handling their cash drawers and determining the day's profits. If the coin is eliminated within the coming years, companies will need to prepare by revising their till system and ensuring all employees are well versed in potential regulations and coin phase outs.