Pennies at the Cash Register

Does time spent at the cash register really "cost" the economy millions of dollars? Are retail workers actually paid according to their productivity? The answer to both questions is a resounding "No" according to Americans for Common Cents (ACC) Executive Director, Mark Weller.

A Closer Look at Costs Associated with Making Change

Does time spent at the cash register really "cost" the economy millions of dollars? Are retail workers actually paid according to their productivity?  The answer to both questions is a resounding "No" according to Americans for Common Cents (ACC) Executive Director, Mark Weller.

Both arguments about freeing up economic resources via penny elimination are made by the dollar coin lobby, which supports currency reform to include elimination of both the dollar bill and penny. Weller says his group sees no connection between the two coins. "Congress can move forward on the dollar coin, or choose not to, even though the American public has already rejected it three times. Eliminating the dollar bill in favor of a coin has no bearing on the penny," he added.

The U.S. Mint is currently looking at ways to reduce the cost of vended coins. There should not be any discussion about the dollar coin unless potential savings from other vended coins are part of the debate.

The argument put forth by the Dollar Coin Alliance (DCA) goes as follows:  If the penny was eliminated, it would save time at the cash register and improve worker productivity. The DCA supported a Citizens Against Government Waste study that estimated it adds a couple of seconds per cash transaction to handle dollar notes and pennies. They suggest that penny elimination would free up economic resources of "about a billion a year." Such astronomical claims of savings are empty in the absence of evidence bearing on the issue.  ACC's Weller challenges the claim with three facts:

Lost worker productivity charge is absurd

First, the charge of lost worker "productivity" with the penny is absurd. "It takes leaps of logic to link time 'wasted' with giving pennies in change to time that might have been used to clean, restock shelves or serve consumers," he said.

Net time making transactions will actually increase with price rounding

Second, the more troubling problem arises with the assumption that removing the penny from circulation would eliminate the productivity loss. Such conjecture is illusory. In fact, Weller says, there are many reasons to believe the net time associated with consummating transactions would increase, not decrease, without the penny.

The removal of the penny would require the implementation of a rounding system for cash transactions. The actual execution of that rounding system,, as well as employee training and adjustment for each transaction, would be time consuming and unavoidable, likely resulting in consumers spending more time waiting, not less.

Economic costs of rounding of transactions eclipses time associated with handling pennies   

Removing the penny from circulation would impose a regressive rounding tax on those making a disproportionate share of their transactions in cash - the poor and under-represented members of our society. This consumer rounding tax would eclipse any business cost of handling pennies.

Economists agree on one principle: businesses are guided by a desire to maximize profits. There is no obvious incentive for business to set prices in a way that will lead to rounding down. "In practice, price rounding cannot be done fairly," Weller said.  

At a December 2, 1998 committee meeting, members of the National Association of Convenience Stores (NACS) were told that the net profit on an average transaction in a convenience store is only 3% or 6 to 7 cents. Comparing the two cent difference in rounding up a penny versus rounding down a penny, it was stated that such a difference "accounts for over 30% of that net profit and, therefore all prices in the convenience store would have to be raised." At the same NACS meeting, it was reported that "the offset in the cost of handling the penny does not even compare to the 30%" of the net profit which would be lost from rounding down.  "Over three-quarters of Americans (77 percent) are concerned merchants would raise prices without the penny, and they’re probably right," Weller concluded.

CONCLUDING THOUGHTS

The major alleged benefit associated with eliminating the penny - recovering the time and therefore productivity lost when making change at the cash register - is an illusion.  The rounding costs that would come from eliminating the penny would also have significant adverse effects on consumers, and time making change would dwarf any estimates of improved productivity. The elimination of the dollar bill in favor of a dollar coin has no relevance to the penny and arguments to remove it from circulation.  Additionally, the dollar coin should not be discussed without considering the cost savings of alternative metals for the coin, including the plated coin technology adopted by Canada.

 

President's Day - A Time to Celebrate Abraham Lincoln and Cheaper Pennies

President's Day gives us the chance - at least once a year - to recognize Abraham Lincoln's immense contributions to the country and a legacy that continues to enrich us daily.


President Lincoln is a unique cultural and historical figure," said Mark Weller, Executive Director of Americans for Common Cents. "It's not just that the front of the penny has had Lincoln's image since 1909, it's what Lincoln did for our nation," Weller added "He possessed all the qualities we want in a president -- the ability to unite a divided nation, honesty, strength, and humility," Weller concluded.


For the full press release, please click here

 

Special Announcement!

Pennies for Pasta and Pennies for Patients

These are run by The Leukemia and Lymphoma Society through its local chapters as part of its renamed Student Series program:  www.studentseries.org

For more information, you should call your local Chapter which may be found by going to the Society's website at: www.lls.org

Please note Americans for Common Cents does not get actively engaged in any fundraising activities.

Collapse of the zinc market means the penny is cheaper to make; saves taxpayers!

A collapse in metals prices means U.S. coins, including the penny, are less expensive to make. The penny has reached its lowest cost in seven years. Each 1-cent coin, made almost entirely of zinc, now costs the taxpayer much less to produce and its likely to stay that way for the foreseeable future.

Click here to read more.

More than Two-Thirds of Americans Still Favor Keeping the Penny

Recent Poll Shows Increasing Penny Support and Concern About Price Increases If Penny Is Eliminated

WASHINGTON--(BUSINESS WIRE)--A poll released today by Americans for Common Cents (ACC) continues to show overwhelming and increasing support for the penny by the American public. 68% of those surveyed favor keeping the penny in circulation, representing a slight increase since the last poll in 2012.

"These results confirm the strong and unwavering support the penny continues to receive from Americans," said Mark Weller, Executive Director of ACC. Weller's group includes more than 50 organizations that support continued production of the penny.

For the full article, please click here

What Does it Really Cost to Make a Penny?

Recent reports about penny costs have led some to ask if the government would save money by eliminating production of the penny. So, are we better off financially without the penny? The answer is "no" according to a recent report by Navigant Consulting, Inc.

Navigant found the government would actually lose money without the penny. How? Click here to read more

WHAT DOES IT REALLY COST TO MAKE A PENNY?

 

Recent reports about penny costs have led some to ask if the government would save money by eliminating production of the penny. So, are we better off financially without the penny? The answer is "no" according to a recent report by Navigant Consulting, Inc.

 

Navigant found the government would actually lose money without the penny.  How? Click here to read more

Contact Us

Americans for Common Cents
1900 K Street, N.W.
Washington, DC 20006-1102    
Phone (800) 561-7909
Fax (202) 408-6399
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Penny News

  • A poll released today continues to show overwhelming and increasing support for the penny by the American public. 68% of those surveyed favor keeping the penny in circulation. "These results confirm the strong and unwavering support the penny continues to receive from Americans," said Mark Weller, Executive Director of ACC.

     
  • Does time spent at the cash register really "cost" the economy millions of dollars? Are retail workers actually paid according to their productivity? The answer to both questions is a resounding "No" according to Americans for Common Cents (ACC) Executive Director, Mark Weller.

    Read more...  

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Lincoln In His Own Words

Most folks are about as happy as they make up their minds to be.
Abraham Lincoln

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