A Penny Saved Is Not Worth Much

Pennies are useless clutter, so why are they still around?

We’ve all been there. You buy something at the store, pay cash, and then stand there counting pennies to lessen the load on your wallet and foist them onto the store, all while the clerk watches impatiently and the people in line behind you fume.

What good are pennies? No one wants to carry them around and they pile up in your home. You fill containers because you can’t use them to buy anything in a vending machine or pay a toll, so there is nearly no benefit to carrying them around. Perhaps you pay electronically with a debit or credit card, so pennies don’t plague you, but try paying in cash, and you can’t escape them.

Even if you take away the annoyance factor, pennies are bad for the environment being made of 3% copper and 97% zinc, heavy metals that must be mined. Currently the largest zinc mine in the U.S., Red Dog Mine, has had problems with toxins entering the air as metal-laden dust, and metals leaching into the ground and water, prompting a lawsuit from communities downstream from its operations.

Metal mining becomes more expensive as the value of heavy metals goes up. As of 2010, it cost the government 1.79 cents to create each penny. The U.S. Mint created four billion pennies in 2010 at a $32 million loss. Lawmakers looked at all the items on the budget and cut funds for education and other much needed programs, but decided to keep churning out pennies at a financial loss.

The biggest argument against eliminating pennies is that rounding prices to the nearest nickel would cost consumers money, however, those paying electronically wouldn’t be affected, only consumers paying cash. A 2006 study showed that consumers actually gained about one cent for every 40 transactions, which essentially means that stores and consumers broke even.

Getting rid of the penny also cuts down on wasting time. Consumers and clerks spend at least a few seconds during each transaction that the customer digs for pennies or the clerk counts out change. Studies estimate that consumers spend more than 12 hours a year dealing with pennies, and that doesn’t include rolling them and taking them to the bank to trade them in.

One California business has taken matters into its own hands. Mike’s Bikes has banned pennies in its nine stores. The company is rounding each cash transaction down, in favor of the customer every time. Mike’s Bikes estimates that by eliminating pennies, it will save over $5,000 a year, and it wants to pass on some of those savings to their customers.

Why are we still stuck with this fiscally useless and environmentally damaging clutter? The penny debate has been raging since 2001, when U.S. Representative Jim Kolbe (R-AZ) introduced legislation to eliminate it. The legislation failed and despite numerous arguments to retire it, a decade later the (bad) penny still keeps turning up.

image: tattooed jj

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