Big changes ahead for Small Change? 1 1

[Henri Charriere]

In its latest opinion piece, the American Institute for Economic Research (AIER) in an on-line item entitled, "Small Change: Let's Put Pennies (sic) and Nickels to Rest," the organization argues that with cents costing up to two cents to make and nickels costing nearly eight cents, depending on metal market conditions, it's time to dispense with them entirely.

What are your thoughts on this?

[J P M]

It will be bad for me. I wont get my cheap nickels any more. Everyone will want them.

[Jason Abshier]

We were supposed to make that move back when Canada gotten rid of their cent … somehow we hung on to our beloved Lincoln cent … it had a good run for a lot years the longest running US coin ! Time to lay it to rest I won’t miss it … as for nickels? They don’t usually circulate as much anymore same could be said for Dimes … now a days everyone uses credit cards and debit cards to make purchases 

[BKW1]

Personally, I have no problem with removing cents and nickels from general circulation, but they should continue to be released as part of yearly mint and proof sets.

[The Neophyte Numismatist]

The half cent was decommissioned when it was worth the modern equivalent of ~$0.16.

[Coinbuf]

On 4/24/2023 at 5:21 PM, Henri Charriere said:

In its latest opinion piece, the American Institute for Economic Research (AIER) in an on-line item entitled, "Small Change: Let's Put Pennies (sic) and Nickels to Rest," the organization argues that with cents costing up to two cents to make and nickels costing nearly eight cents, depending on metal market conditions, it's time to dispense with them entirely.

What are your thoughts on this?

Garbage reporting.   The job of the US mint is to make coins for commerce, that is its real and true purpose.   Somewhere along the line some bonehead decided that it should be a profit center, so now it is.   When I took my tour of the Denver mint a few years ago the guide told us that the mint does lose on the cent and nickel, however, what he also said (that goes unsaid by those with an agenda) is that the mint more than makes up for those loses with what is made on the dime, quarter, and dollar coins.

Edited April 25, 2023 by Coinbuf

[Coinbuf]

On 4/24/2023 at 6:01 PM, Jason Abshier said:

We were supposed to make that move back when Canada gotten rid of their cent … somehow we hung on to our beloved Lincoln cent … it had a good run for a lot years the longest running US coin ! Time to lay it to rest I won’t miss it … as for nickels? They don’t usually circulate as much anymore same could be said for Dimes … now a days everyone uses credit cards and debit cards to make purchases 

Dang, I wonder why I am constantly having to take the change from my vending machine business to the bank if everyone is using cards now, weird.

[Just Bob]

On 4/24/2023 at 10:21 PM, Coinbuf said:

Dang, I wonder why I am constantly having to take the change from my vending machine business to the bank if everyone is using cards now, weird.

I don't own a credit card. I use debit cards or checks for business and online purchasing. Everything else I buy using cash, and I usually pay with exact change. I try to make sure I have at a minimum 3 quarters, two dimes, one nickel, and four cents in my pocket at all times so I can give the teller the exact amount of the purchase. It's an "old man" thing, I guess.

[Jason Abshier]

On 4/24/2023 at 11:21 PM, Coinbuf said:

Dang, I wonder why I am constantly having to take the change from my vending machine business to the bank if everyone is using cards now, weird.

Not in my neck of the woods I don’t see it that way , even at my work place all Vending machines are equipped with Credit/debit card 95% of employees use their debit or credit card to make snack or pop purchase.. Same could be said at the Malls and other store where I see vending machines I see a lot people using credit cards , as well at car washes too … Most folks I see aren’t carrying the money on them anymore 

[J P M]

On 4/25/2023 at 1:09 AM, Just Bob said:

I don't own a credit card. I use debit cards or checks for business and online purchasing. Everything else I buy using cash, and I usually pay with exact change. I try to make sure I have at a minimum 3 quarters, two dimes, one nickel, and four cents in my pocket at all times so I can give the teller the exact amount of the purchase. It's an "old man" thing, I guess.

I always use cash and change whenever I can, Mostly to teach the young people that can't count change.

[JT2]

I have a credit card.... wait let me go and ask my wife if i can look at it... HAHAHAHAHAHAHAHAH... i only use a credit card if i am out of town and have to get a room and or a car.  other than that it stays in my safe... i am a cash carring person.  also.  cents and nickels are very large portion of my collections from the beginning of the small cent and nickels.  love'em 

[ldhair]

I have noticed a few changes in my area. 

The local bars have changed pool tables and other machines over to dollar coins only. Everything used to be quarters.

I have also seen a change in the habits of those that have to pay rent each month. A few years ago, 80% paid by check or money order. Now, 80% are paying with cash, most with $20 bills from ATMs. Some would think that is a good thing but not for me. I can deposit checks and money orders with my phone. Cash is a pain in the backside. It requires a trip to the bank and deal with long lines.  

[World Colonial]

I still carry more folding money than most people, a few hundred usually just in case.  I don't carry any change anymore and haven't for years.  It's not worth anything.  I also avoid paying cash where I will receive change back.  

I've used change so little the last 10+ years I have limited knowledge of the designs on circulating coins.  I know the cent changed in 2009, the nickel in 2004, Sac and Presidential dollars, and recognize some or most of the SQ.

Anything else, I have no idea.

[Henri Charriere]

On 4/25/2023 at 8:53 AM, World Colonial said:

Anything else, I have no idea.

Fair enough, off-topic, but can you -- or anyone else, remember the name of the Secretary of the Treasury whose portrait graced the $10,000 bill, the highest denomination currency to ever circulate publicly in the U.S?

 

[World Colonial]

On 4/25/2023 at 10:06 AM, Henri Charriere said:

Fair enough, off-topic, but can you -- or anyone else, remember the name of the Secretary of the Treasury whose portrait graced the $10,000 bill, the highest denomination currency to ever circulate publicly in the U.S?

 

No, not without looking it up.  I know President Wilson is on the $100K note and I think Grant is also on the $500 or $1000 though probably wrong about that.

I was looking at currency lots on Stacks last week where they do have $500s and $1000s available but don't remember who is on it.  It would be kind of neat to own one of these bills, but it's a guaranteed financial sinkhole (from currency debasement) and I'd never buy one.

[Jason Abshier]

On 4/25/2023 at 10:06 AM, Henri Charriere said:

Fair enough, off-topic, but can you -- or anyone else, remember the name of the Secretary of the Treasury whose portrait graced the $10,000 bill, the highest denomination currency to ever circulate publicly in the U.S?

 

@Henri Charriere Salmon Chase Was on $10,000 gold certificate 

[Jason Abshier]

On 4/25/2023 at 10:06 AM, Henri Charriere said:

the highest denomination currency to ever circulate publicly in the U.S?

@Henri Charriere Actually I believe I saw once $100,000 that had President Woodrow Wilson on it … I highly doubted it circulated much maybe among banks and higher up folks who had that kind of money 

[Jason Abshier]

I used read into collectible paper currency when I was bored , but I never dabbled around into buying it maybe someday I’ll pull trigger on it and start collecting some paper currency just to have a small collection. I’m more into coins tho 

[Henri Charriere]

On 4/25/2023 at 10:47 AM, Jason Abshier said:

@Henri Charriere Actually I believe I saw once $100,000 that had President Woodrow Wilson on it … I highly doubted it circulated much maybe among banks and higher up folks who had that kind of money 

Yes, amongst the Federal Reserve Districts.

[zadok]

On 4/25/2023 at 1:09 AM, Just Bob said:

I don't own a credit card. I use debit cards or checks for business and online purchasing. Everything else I buy using cash, and I usually pay with exact change. I try to make sure I have at a minimum 3 quarters, two dimes, one nickel, and four cents in my pocket at all times so I can give the teller the exact amount of the purchase. It's an "old man" thing, I guess.

...no its a "teller cant make change anymore thing" thanks to our "superb" national education standards....

[zadok]

On 4/25/2023 at 10:47 AM, Jason Abshier said:

@Henri Charriere Actually I believe I saw once $100,000 that had President Woodrow Wilson on it … I highly doubted it circulated much maybe among banks and higher up folks who had that kind of money 

...never circulated....

[Henri Charriere]

On 4/25/2023 at 10:28 AM, World Colonial said:

.... It would be kind of neat to own one of these bills, but it's a guaranteed financial sinkhole (from currency debasement) and I'd never buy one.

I did buy one for a nominal $50 once, but they were never really in demand. Then, Numismatic Coin came into a bunch of them quite recently as well as "straps" of $1 silver certificates (some consecutively numbered) and if the lofty prices requested are any indication, interest in owning one of these novelties has soared.  It is my understanding, though still legal tender, when they are spent they are returned to the Federal Reserve Bank where they are checked off and discharged from service.  I am sure the FRB has an "idea" as to how many are still out there.

 

[Coinbuf]

On 4/25/2023 at 2:31 AM, Jason Abshier said:

Not in my neck of the woods I don’t see it that way , even at my work place all Vending machines are equipped with Credit/debit card 95% of employees use their debit or credit card to make snack or pop purchase.. Same could be said at the Malls and other store where I see vending machines I see a lot people using credit cards , as well at car washes too … Most folks I see aren’t carrying the money on them anymore 

Do you pull the cash from the machines at your work, do you see the reports from the credit card processor for each machine that details how many sales were in cash vs card?   You seem to be making the same mistake that many do, you see something, perhaps more than once and you assume that what you see has to be true and that it has to be true across the entire country or society.   Just because you see a soda machine with a card reader doesn't mean that machine cannot take cash as well.      There certainly could be some machines somewhere that are dedicated card only, but not very many.

I have owned and operated my vending machine business since 1996, only about half of my machines have a card reader because some locations do not generate enough revenue to make it financially viable to update and outfit. And I am not alone, there are thousands of small business owners, be it vending machines, coin-op laundry shops, and many others who have cash only machines operating in their businesses.   And of those machines which are outfitted with a reader, the card to cash split is roughly 60/40 and has been for the past five years.

It takes anywhere from $800 to $1,500 per machine depending on if you need to update the software as well as the hardware to add a card reader. Older hardware and software cannot communicate with the readers in many cases, and in some cases the cost to update is more than the machine may be worth. I recently donated a machine to a church youth group for their rec room because it would have cost more to update that machine than it was worth.

Also, there are the monthly costs to operate a card reader, the air charges and the 6% of each swipe that the processing company takes really adds up, the machine owner has to up the prices to cover these costs. However, this can cause a reduction in sales as many people are still reeling from inflation, which makes it even more unprofitable to add a card reader. I service several middle and high schools in my area, and while the younger teachers want a reader on the machine, when I explain how much the prices are going to go up to accommodate that request, the answer I get is almost unilaterally the same, "Oh ok please don't we don't make enough to afford higher prices".

As I said its easy for people that do not know the industry to make assumptions because of what they see at the mall, and because of what we observe in our tiny circle of the world, as well as our own personal choices or habits, but those assumptions may not reflect reality.

I'm not saying that electronic payments are not becoming more routine, just that it is a mistake to make that determination from observation and assumptions when you do not have access to the data.

Edited April 25, 2023 by Coinbuf

[Jason Abshier]

On 4/25/2023 at 12:17 PM, Coinbuf said:

Do you pull the cash from the machines at your work, do you see the reports from the credit card processor for each machine that details how many sales were in cash vs card? 

@Coinbuf no I don’t count cash , but however my CNC lathe is right next to the candy/pop machine . I see everyone who approaches it everyday at work 

again I have a lot younger guys working here I rarely see younger people carrying money they use their iPhones to pay for everything … My “everyday routine” glory days with candy machine gotten best of me I’m watching my health as I age now a days… But back in the days Little Debbie was my favorite girl! and I cannot lie about it 

times sure are changing , got to a Walmart sit down on bench by the check out you’ll notice more and more people pay with credit/debit card than you’ll see someone paying in cash … I can’t remember last time I saw a person pay with check at food checkout …. However to this day I still pay all my bills by personal check ! I don’t trust that online debit transactions for my bills … one time my wife paid electric bill through our online banking … some how they tripled the amount of bill took me a whole week I went to bank and explained to stop the payment now ! They said they couldn’t it MUST go through the. I would have take up with billing company to refund me the money they took from my account … what a shame I have no control over my “own” money at the bank all because the billing company screwed up and tripled the amount when we did NOT authorize it ! … in the end they did refund me back though … since that day on my wife and I only write checks to pay the bills the Ol’fashion way !!!

also around my town and area I’ve notice a lot of the bank branches shutting down over the years and going under one roof … everything pretty much being done online now a days , if I want to go inside a bank to talk to teller get a personal loan for a car ? There usually only 1-2 tellers inside the bank anymore … I have drive all way to other side of town ! Just to go into my bank branch when in last 30 years I’ve had (4 bank branches) within 2 miles of my house either way ! Not no more …

Edited April 25, 2023 by Jason Abshier

[World Colonial]

On 4/25/2023 at 12:05 PM, Henri Charriere said:

I did buy one for a nominal $50 once, but they were never really in demand.

 

You bought a $500 or $1000 for $50?  That's what I was referencing.  I've seen other currency, like the Bison reverse, but this type of paper currency is way too expensive as a sideline collection.  I'm not interested in the common cheap stuff.

World currency I'd only buy in high grade certified and it's not cheap either.

[Henri Charriere]

On 4/25/2023 at 3:12 PM, World Colonial said:

You bought a $500 or $1000 for $50?  That's what I was referencing.  I've seen other currency, like the Bison reverse, but this type of paper currency is way too expensive as a sideline collection.  I'm not interested in the common cheap stuff.

World currency I'd only buy in high grade certified and it's not cheap either.

It was a $1000. 1934 series note I bought for $1,057, I believe, pre-EPQ era and I can assure you the novelty of owning it wore off quickly.  True, they were once guaranteed financial sinkholes (from currency debasement) as you've indicated, but I guess the times they are a-changin'.

[World Colonial]

On 4/25/2023 at 4:21 PM, Henri Charriere said:

It was a $1000. 1934 series note I bought for $1,057, I believe, pre-EPQ era and I can assure you the novelty of owning it wore off quickly.  True, they were once guaranteed financial sinkholes (from currency debasement) as you've indicated, but I guess the times they are a-changin'.

Still almost guaranteed to be a money loser longer term.  Not familiar with the price history since issuance but all of these are worth a low fraction measured in constant purchasing power.  Might have gone up recently due to the massive asset mania.

[Henri Charriere]

On 4/25/2023 at 12:17 PM, Coinbuf said:

.... There certainly could be some machines somewhere that are dedicated card only, but not very many..... I'm not saying that electronic payments are not becoming more routine, just that it is a mistake to make that determination from observation and assumptions when you do not have access to the data.

I don't have access to any data, but my own lying eyes and deceptive auditory receptors lead me to believe denying an unmistakable trend would be akin to insisting horses and dirigibles are set to make a comeback.

There are restaurants in New York (other than the thousands lost to the pandemic) that do not accept cash. You read that right! Then there are the places, 99.44% unlicensed and therefore illegal, which accept cash only: The so-called marijuana dispensaries. They get robbed regularly but how does one report a crime involving a drug that is illegal to possess and sell on the Federal level and unlawful to p&s without a license on the local level? A number of laundromats which should have been retooled to accept dollar coins have changed to cards you have to pay $3.00 for, and then add money too, instead.

Moving right along, the term "food stamps" is a misnomer. They're merely a balance on a plastic electronic benefit transfer (EBT) card (along with Medicaid). If I am not mistaken, paper Social Security and Federal and State tax refund checks are thisclose to becoming extinct. Ebay offers a number of payment options. None by check or cash. [The only on-line concern to my knowledge that permits payment with cash is PCGS.] To pay a utility bill, cable bill, cellphone bill--even rent, there is no opt-out option for automatic deduction from a bank account.  [For the privilege of paying my rent, I can choose automatic deduction -- and pay a mandatory $2.95 surcharge -- or continue to mail in my personal check with a Forever stamp. Collection of vehicular traffic tolls in New York is accomplished with license-plate readers and EZ-passes. Currency and coinage, including the once ubiquitous tokens, are no longer accepted on New York City subways and buses. [If you board a Metro-North or LIRR train without a ticket, you will be charged the standard fare + a ridiculous penalty fee. I believe cashless customers are summonsed.] Are half-dollars and one dollar coins even being minted for circulation anymore, or are they buried deep within bank vaults alongside the two-dollar bills?

I would characterize the AIER report not so much as rubbish, but a prognosis and portent of things to come.  Look at the bright side: maybe, just maybe you can complete your LHC Set Registry in your lifetime. 🤣

Moderators:  much obliged!  

[zadok]

On 4/25/2023 at 6:45 PM, World Colonial said:

Still almost guaranteed to be a money loser longer term.  Not familiar with the price history since issuance but all of these are worth a low fraction measured in constant purchasing power.  Might have gone up recently due to the massive asset mania.

...big money to be made in currency but u have to buy raw n certify n know what ur doing, very few collectors can grade currency accurately...%return on currency much higher than on coins...the $1000 notes routinely selling for $1700-$2000 range if in just decent mid range grades as an example...choice crisp clean uncs, the sky is the limit depending on the grade....

[World Colonial]

On 4/26/2023 at 8:43 AM, zadok said:

...big money to be made in currency but u have to buy raw n certify n know what ur doing, very few collectors can grade currency accurately...%return on currency much higher than on coins...the $1000 notes routinely selling for $1700-$2000 range if in just decent mid range grades as an example...choice crisp clean uncs, the sky is the limit depending on the grade....

I understand that. You're describing speculation, buying it to "flip".  I'm referring to buying it as a "hold" for someone's collection.

How do the prices you cite compare to the purchasing power of these notes decades ago?

That's my point.

$1700-$2000 now is worth a fraction of the FV (real value it could buy) when it was issued.  Same result if someone bought it when I started collecting coins in 1975.  Specific results depend upon the date of issuance and purchase.