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Canada To Stop Producing Pennies In 2013
First time accepted submitter master_kaos writes "Canada is going to stop producing pennies in February 2013 to help save the tax payers $11 million per year. Cash transactions will be rounded to the nearest nickel. Cheque/Credit Card transactions are not affected."
I have wondered for years how long it would take us Canadians to finally get rid of that awful piece of currency. Especially given that it takes more money to produce it than it is actually worth. No one can buy anything with pennies anymore and they really are nothing more than just metal wasting space. Plus, vending machines have never taken them which has made them even more useless than before.
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China and India are both transforming their economies to be more like the west, creating a larger middle class in those countries. A larger middle class wants bigger and better housing. With China and India making up almost 4 billion people together, that is a lot of new housing, and a lot of copper that needs to go into making those houses. Supply of copper has not been able to keep up with demand. How do you expect prices of copper to stay low if the demand shoots through the roof for copper and supply does not grow accordingly?
Yes, you're right, it costs 1.6 cents per penny.
citation: metro news
No, that is not right. Your own source specifies that 1.6 cents is the MANUFACTURING cost, not the price of the metal in the penny.
If the metal in the penny was worth more than the penny people would be melting them down, as they did with gold coins. Clearly that is not happening.
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Sensible merchants would just use divisible-by-5 prices to avoid issues with rounding.
This doesn't always work. A common example where it doesn't work is grocery stores where certain items are sold by weight.
No, Advertised price at 9.96 would round down to 9.95. Then the price should increase to 10.05 or so, then jump to 10.95.
http://en.wikipedia.org/wiki/Psychological_pricing
What's a penny? What's a nickel? ;)
Here in Switzerland we have done away with them since a very very very long time ago. BTW a Swiss Franc is slightly worth more than a USD or CAD. I personally prefer it that way. Actually I prefer the debit transaction system we have. I can have a 100 CHF in my pockets and it will last me for about 1 to 2 months.
The one dollar bill of the US just confounds me.
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The reason the penny costs so much to keep in circulation is not solely the cost of minting. If a penny costs $0.02 to mint but is used in 10,000 transaction in it's life time that would be ok.
The problem with the penny is that they don't get spent. The mint needs to keep producing new ones for retailers to give out and people go home and throw them in a coffee can.
Oddly, this is the exact argument in favour of $1, $2, and $5 coins. People don't spend coins as easily, they tend fall between couch cushions or collect in jars. Until those jars are emptied, and the couch cleaned those coins are basically a kind of interest free loan the government.
I hate pennies .. they are evil and need to be banished from the earth. But Americans would scream blue murder if the gubmint tried to take their precious away.
But the funny/bizarre thing is that the US public has already been conditioned to rounding the bill through the use of the give/take-a-penny trays in innumerable stores across the country.
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In most cases rounding will go UP by a penny or four, because of the tendency to price things at xxx.99.
If and only if I buy only one item. I buy 3, all ending in 9, and the total transaction ends in 7. Therefore rounding down to the nearest nickel. Whee!! I screwed xCorp out of 2 cents!
The penny is just as pointless in the USA as it is in Canada. Of course, the USA is considerably behind Canada in recognizing the changes wrought by inflation. In addition to abolishing the penny, it should abolish the dollar bill and introduce a $2 coin as Canada did many years ago. (If you wanted to be really far-sighted, you could establish a plan for when to abolish the nickel and the $5 bill and introduce a $5 coin.)
Unfortunately, currency reform would not only face stiff opposition from the zinc lobby (because penny is largely zinc now), but from the politically well-connected Crane Company in Massachusetts, which manufactures all of the paper used in printing US currency. The absurdity of vending machines and tollbooths needing to accept paper money (much more expensive than coins) counts for nothing as against a corporation with skilled lobbyists.
I still can't fathom how posting "prices" that are different from what you actually pay may be considered a good idea.
It adds to customer confusion, cashier's work, and the benefit is... what? That it stresses how much the government gouges you for? That's not useful for anything but a political statement, and if so, it should note the credit card robbery as well.
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