It’s been reported that the Mint is going to be encourage people to use the dollar coin in targeted cities. They’re probably paying a marketing company hundreds of thousands instead of facing facts.
Other than a few coin collectors, people do not like the dollar coin. They should change the dollar coin, or just give up on it.
The dollar coin has been tried and failed for almost 50 years. Since 1979, we’ve had the Susan B. Anthony, the Sacagawea and now the Presidential dollars. All failures. If they really want to give the dollar coin a chance, the Mint needs to stand up to the vending machine lobby and change the dimensions. Make it smaller and thicker than a quarter and a different composition entirely, something like the reeded-edge nickel-brass alloy 1 pound coin used by Britain.
Some don’t like the idea of having a dollar coin smaller than a quarter, but the size is too similar to the quarter, and the golden-brown color hasn’t helped it gain acceptance. Unless we want to make a smaller quarter, it’s easier to go with a smaller diameter dollar, but thicker to differentiate from a nickel. The Mint won’t need to pay for marketing; jokes about the shrinking dollar will do the job for them.
Except perhaps for the quarter, most of our coins don’t actually circulate. They follow this cycle:
First, the bank sells coins to a merchant. Next, the merchant passes the coins to the consumer. The consumer takes the coins home and puts them in a jar (except maybe quarters). Every year or so, the consumer returns the coins to the bank and the process starts over.
Most transactions today are handled with credit and debit cards. Go to the grocery store, the gas station, the drugstore – people pay with plastic. When people do pay cash, they use bills, not change.
For instance, someone buys lunch and the bill is $6.36. Most times, the cashier will be handed a $10 or a $20 and make change. Consumers rarely bother with exact change – those brave souls who try receive impatient grumblings from the people in line and/or the cashier, reinforcing the decision to just pay with paper.
Cents, nickels and dimes are only used if the total due is just over a dollar amount – for instance, if the total is $10.02 you might dig around for 2 cents, but the motivation is to avoid receiving more change. (Though the odd collector might pay $11 solely to receive the change.)
Small bills, on the other hand, do circulate. People don’t have paper money jars at home. In the example above, you pay with $10. The note goes in the cash register. The next person pays with a $20. She gets your $10 in change. Maybe she uses the $10 later on to buy coffee. The $10 bill is passed from person to merchant and back again numerous times, only returned to the bank when the merchant makes a large cash deposit.
The numbers don’t lie – billions of coins minted each year for 300 million people.
Look at it this way: The U.S. population is about 300 million. That figure includes people who don’t use coins – like kids under 3, who only eat coins; or people in nursing homes (who might collect them)
So why do we churn out billions of cents, nickels, dimes and quarters every year? If coins were actually circulating, how many coins, per person, would be required to support commerce? I would guess that 25 cents, 10 nickels, 10 dimes and 40 quarters, per person, would be more than sufficient.
So why are we making billions of cents a year? At first it seems counterintuitive, but we mint billions of cents each year precisely because they don’t circulate. Some are abandoned in need-a-penny cups, or even discarded. Most end up in penny jars; we don’t like throwing away cents, but they aren’t worth carrying. When the jar is full, we roll and return them to the bank (or, if you have a bank with a coin machine, you can empty the jar there).
How about encouraging people to empty their penny jars?
It would be interesting if, instead of wasting funds on another failed public relations campaign promoting the dollar coin, the money was used to encourage people to empty their penny jars. It could be tied to a certain event, the way we are reminded to change smoke detector batteries at daylight saving time. The government could set up collection points with free counting machines to make it easier for people to turn in change. I’m sure any number of collectors would happily volunteer to man those collection points. Who knows what we might find? Based on mintage figures, there should be billions of noncirculating coins sitting in penny jars.
Don’t get me wrong. I’m not saying that small denomination coins aren’t useful in commerce nor am I advocating their elimination. I’m just pointing out that most do not actively circulate.
Dan Knauth is a hobbyist from New York, N.Y.
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