Canada leads the way, again.

[rubato]

When making cents doesn't, its time to follow the Talking Heads.


________________________
http://news.yahoo.com/canada-pennys-dro ... 50832.html
In Canada, the penny's about to drop into history
Associated PressBy ROB GILLIES | Associated Press – 9 hrs ago


TORONTO (AP) — They clutter your dresser and cost too much to make. They're a nuisance and have outlived their purpose.

Finance Minister Jim Flaherty was talking about the Canadian penny and why the Royal Canadian Mint will end its production this fall as part of his austerity budget.

"The penny is a currency without any currency in Canada, and it costs us 1.5 cents to produce a penny," Flaherty told reporters.

Responses Friday were mixed, with some Canadians saying it would make life easier, while others worried it would become an opening for sneaky price hikes.

David Berman, a blogger at the Toronto Globe and Mail, took issue with Flaherty calling the penny a nuisance. "For a government that has been warning Canadians against piling on too much debt, it seems like a contradiction to then denigrate the one-cent coin — hey, it's still money — as nothing more than a waste of space. It isn't."

_____________________________

yrs,
rubato

[dales]

I've been grousing about this for decades.

The one-cent piece (aka: the penny) has long outlived its usefulness.

When I was in high school, nickel candy bars were still being offered, gas was less than 25cents/gallon, and sodas were a dime...I could see the reason for pennies.

Now the d@amned things are just a nusiance!

[Crackpot]

THey don't bug me. and i'm suspicious of how things will be rounded. I somehow doubt the consumer will end up on top with that one.

[Scooter]

The way it's going to work here, for a while at least, is that transactions will not actually be rounded. If you're paying by credit/debit card, then the transaction will still be charged to the penny. If you are paying cash, and have pennies to use (and I suspect they will be coming out of where they are being stashed for quite a while after this is implemented), then you can pay to the penny. Only if neither of those applies (and that's less and less nowadays) will the transaction be rounded to the nearest nickel, but it won't be the cash register doing it, so you can clearly see the rounding being done.

[Crackpot]

Sure you can see it but I suspect that the prices will be set to ensure that the house will win.

[Scooter]

Prices are going to be set based on what stores believe will make people buy. It's easy to say, for example, that the house will win because so many things are priced at 99 cents or end in 99 cents, but guess what, if I buy 3 or 4 items priced that way (or 8 or 9), I am going to win. And I see pretty much as many items priced to end in 97, because that is a different marketing strategy, and I am going to be paying two cents less every time I buy one of those.

Of course that doesn't even take into account items that are taxable, and how purchases of different items are combined. The permutations are way too complex for anyone to come out with a pricing strategy that they know is going to be a net win for them.

[Crackpot]

You set it up on the single item. (plus tax) and more often than not you'll come out on top. Beyond that given a large enough market you can bet your ass it will be studied and exploited.

[Scooter]

Well here, for example, a 99 cent taxable item will come out to $1.12. I find it difficult to believe that stores are going to give up the marketing advantage inherent in a 99 cent price hoping to capture an additional penny or two.

[Crackpot]

and a 1.99 item? what if you had one place selling something for 1.99 and someone selling it for 1.98? who do you think will sell more?

[Scooter]

Both would round to $2.25. If the price would have been $1.99 but for the fact that the store is trying to capture the extra cent (and perhaps extra sales) by pricing it at $1.98, then the customer is no worse off.

And again, if I buy two at $1.98 I will come out ahead. There's nothing stopping customers from being just as savvy about how to come out on the winning side of the transaction. Even more so, because the customer will have perfect information about the purchases they are making, and the store will not.

[Scooter]

And customers could profit even more by paying electronically when rounding would work against them and in cash when it would work for them.

[Crackpot]

You'd be surprised how much of the economy and your spending is one off items.

[rubato]

Now if only we could dump the dollar bill in favor of coins ...

yrs,
rubato

[Gob]

THey don't bug me. and i'm suspicious of how things will be rounded. I somehow doubt the consumer will end up on top with that one.

The smallest coin here is a 5c piece. Things are rounded to the nearest 5c, 82c becomes 80c, 88c becomes 90c.

Aus lead the way, (not Canada ) in 1990.

Edited to add; The British one pound (£1) coin replaced the note as far back as 1983.

[alice]

.... and the last discussions Australia had were about whether the 5c coin should be scrapped (I remember that being a topic a year or so ago. Haven't heard much of it lately though)

[dales]

Now if only we could dump the dollar bill in favor of coins ...

yrs,
rubato

http://www.thirdage.com/news/dollar-coi ... 12-14-2011

The U.S. Mint will stop producing the dollar coins to help cut government waste, U.S. Vice President Joe Biden announced Tuesday.

During a meeting, Biden said the commemorative coin program has been a failure.

"Right now, the law requires us to make dollar coins featuring every deceased president of the United States," UPI.com quoted Biden as saying. "They make hundreds of millions of these coins every year, 40 percent of them end up being returned to the Federal Reserve because nobody wants them. And here's the worst part: They're still making coins of presidents from the 1800s, meaning the United States Mint is about halfway through its planned production.

"And as it will shock you all, the call for Chester A. Arthur coins is not there," Biden joked.

He said an estimated $1.4 billion in dollar coins are "literally just sitting around unused" in Federal Reserve vaults.

UPI said the Mint was scheduled to issue $1.6 billion more through 2016.

"Nobody wants these coins," the vice president said, pointing out that suspending production would save about $50 million annually.

During the meeting, Health and Human Services Secretary Kathleen Sebelius and Treasury Secretary Timothy Geithner[quad's boss] announced other cost-saving plans such as moving Americans to electronic payment systems, expanded e-filing of tax returns and pushing insurance companies to track abuse of painkillers more closely to reduce emergency room visits for overdoses, UPI reported

[BoSoxGal]

So stupid; Americans need to get past their aversion to the dollar coin.

They're quite attractive, and incredibly durable. Why doesn't the Treasury just eliminate the dollar on its own accord? Does doing so require an act of Congress?

[Jarlaxle]

I believe they do.

[Crackpot]

they just need to stop producing the bills that's what Canada did. IIRC to a fair amount of whining at the time (I'll defer to scooter on this one tho.

[Scooter]

There was some whining, but it was pretty short lived. After dollar bills were no longer produced, it only took about a year for the remaining ones to disappear from circulation, and then there wasn't much point to whining about anymore. Same with when the $2 bill was replaced with a coin.