Becoming penniless doesn’t always mean becoming poor; here it signifies operating without pennies. The Treasury announced that it had placed its last order for blank pennies and would not be minting any more one-cent pieces after the last of these blanks had been used. It costs the government 3.7¢ to produce a penny. It said that ceasing production would save $56 billion. The U.S. is following what has already been done in Sweden (in 1972 for the 1 ore), New Zealand (in 1990), Australia (in 1992), Canada (in 2012) and the U.K (in 2020 for 2p coins).
What does this mean for your business?
Pennies still count
Just because pennies are no longer being minted does not change their status as legal tender. Those already minted remain in circulation and you may continue to accept payment in pennies.
Changing prices?
Businesses are not required to make any changes in pricing in response to the Treasury’s action. Consider:
- Paying with cash. If an item costs an amount that would otherwise require a penny or pennies, you can round up or round down. Basically, you’d round to the nearest nickel. For instance, if the price of something is $9.71 or $9.72, round down to $9.70. If the price is $9.73 or $9.74, round up to $9.75.
- Paying with credit card, electronic transfer, or other non-cash means. The Federal Reserve says it’s not illegal to refuse cash, but some states and cities have made it illegal to refuse cash and other localities are considering “pro-cash” laws to protect low-income individuals who lack bank accounts and credit cards. If you only accept non-cash payment options (where allowed), there is no need to make any pricing changes.
Changing famous quotations and sayings?
Business matters aside, pennies are used to convey something in many famous quotations, and many famous expressions are tied to them. The following are just a few. Will the quotations need an update once pennies essentially disappear? Will the expressions stop being used?
Quotations:
- “Pennies do not come from heaven. They have to be earned here on earth.” Margaret Thatcher
- “A penny saved is a penny earned.” Attributed to Benjamin Franklin
- “Find a penny, pick it up, and all day long you’ll have good luck.” Unknown
- “A bad penny always turns up.” Unknown
- “A penny for your thoughts.” Unknown
Sayings:
- Penny ante
- Penny pinching
- Pennies on the dollar
Final thought
So much for pennies…nickels are next! It costs the government 13.8¢ for every nickel it creates. The Treasury has been reducing production of nickels. Is an end in sight?
