The Price of Minting a Penny

Consider the lowly penny, ditched in a bowl on the dresser or tossed in a jar where it will eventually be ... what?  Deposited in the change-O-meter at the grocery store?  Given away under the pretense of charity?  Buried under a tree in the backyard with photographs of the family and a note for the future?  (Okay, that last idea is pretty cool.  I've done it more than once.)

But how much longer should we hang on to this antiquated, money-losing proposition. Money losing? Yes – ridiculously so. How much is a penny worth? One cent – which is the formal way the US Government recognizes the coin. And how much does it cost to make one cent? Estimates vary from 1.23 cents to 1.67 cents. But the key is in the numbers to the right of the 1. It costs more to make a penny than a penny is worth.

Maybe they make up the difference in volume, as the US Mint produces 8 b-b-b-billion pennies each year. Eight billion cents = 8,000,000,000 coins. Moving the decimal as Mrs. Larson taught me in the fourth grade means that it totals $80,000,000.00. Eighty million dollars, in case your eyeballs started to cross at all those zeroes. And how much can we estimate it costs to make 80 million dollars? Let’s split the difference and say 1.45 cents for each coin x 80 million and I think it’s $116,000,000,000, but my calculator erred out. One hundred sixteen million dollars to produce 80 million dollars worth of … well, dollars, in a sense.

So wotta ya gonna do about it? On the higher level, write your Congressperson and Senator and tell them that we don’t need the penny, we don’t want the penny and we can’t afford the penny. Then watch them leap into inaction. Or more likely, watch the lobbyists for the zinc industry, of which "copper" pennies are made, continue to pour over $100,000 into the pocket of your Congressional representative.

On a personal level, don’t take the pennies you are given in change when you are shopping. Throw them in the Tip Jar (cheapskate), leave them on the counter “for the next poor slob,” as I like to say, or give them to the next person in line, saying, “Here – in case you need these." Depending on your shopping habits, this may actually cost you as much as 15 cents a day, but remember – you are working towards a greater cause.

But frankly, none of this will make a difference. The only way the penny would likely be eliminated is if McDonald’s and Starbucks and Wal-Mart and the other major retailers began rejecting their use. I’m not saying they shouldn’t accept pennies – I’m saying they shouldn’t give them out. Work with me here. If you are buying your whatever and the penny total comes to 1 or 2 cents, the company should round down and charge you the lower price. If the total is 3 or 4 cents, they charge should round up to the nickel. If you want to pay with pennies, go ahead. Maybe they will leave them on the counter for the person who thinks they are getting cheated out of their two cents, while very likely spending dollars on something they don’t need. But if the larger retail establishments set this tone and it gains in popularity, the vote-seekers in Congress will eventually make the daring choice of doing the will of the people. And soon, those pennies will go the way of the two-cent piece.

By the way, did you know it costs almost seven cents to make a nickel? One step at a time, though.

UPDATE! February 5, 2103 
In Canada, The Royal Canadian mint officially ended its distrubtuion of one-cent coins to financial institutions.  The government has issued guidelines urging store owners to start rounding prices to the nearest nickel for cash transactions. I guess someone is reading this site!