

Why the US keeps minting coins people hate and won't use - dmytton
http://www.bbc.co.uk/news/world-us-canada-10783019

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ww520
OT, the Treasury has a program of selling dollar coins with free shipping, to
encourage dollar coin usage. And they accept credit card payment. People have
been using credit cards to buy the coins and deposit them to the banks. It's a
good way to earn credit card cashback.

~~~
alaithea
I wonder how many of us it would take to start affecting change (no pun
intended) among our local retailers by getting dollar coins this way and
proceeding to use them around town on a consistent basis.

~~~
ww520
Here's the link.
[https://www.usmint.gov/mint_programs/$1coin/?action=directSh...](https://www.usmint.gov/mint_programs/$1coin/?action=directShip)

From what I heard the Treasury doesn't lose money with the direct-ship
program, at least with accounting on paper. It's kind of weird. They create
the money out of the thin air using some metal. We bought them at face value
using our money. The cost of the coins would be the metal, the minting
process, plus the shipping cost, which is less than the face value of the
coins. It defies intuition when it comes to the fiat money creation process.
Of course coins out-last paper money many times and have long term cost saving
result for the Treasury.

~~~
hga
The term of art for this is seigniorage:
<http://en.wikipedia.org/wiki/Seigniorage>

See especially the "Seigniorage Today" section.

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jasonkester
Dollar coins are in wide use. Just not in the USA.

Head down to Ecuador and pay for something with a five dollar bill. (Ecuador,
El Salvador, and a few other places use the US dollar as their official
currency). You'll get dollar coins in change.

It works great. Coins have value. Especially since nobody uses pennies down
there. Everything costs a multiple of five cents. Hopefully this little bit of
3rd world efficiency will trickle up the the 1st world.

~~~
CWuestefeld
Several years ago I vacationed in Bali (my employer was paying -- woohoo!). At
the time, the exchange rate was 10,000:1. So I'd walk into a bank with $100US,
and walk out as a "millionaire" in Indonesian Rupiah.

When you buy something in a store there, they pretty much ignore the two least
significant digits. They make up the rounding error for you by giving you a
handful of mints.

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gaius
The way the UK switched from pound notes to pound coins was simply to withdraw
the notes from circulation.

In Egypt you can get 25 Piastre notes, they are worth about 4p in Sterling.
Local cab drivers sometimes refuse to accept them.

~~~
timthorn
Pound notes are still printed in Scotland and are legal tender for the entire
UK. It always makes me feel quite nostalgic when I get one.

~~~
ropiku
I knew that scottish pounds aren't legal tender:
[http://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling...](http://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling#Scotland_and_Northern_Ireland)

Bus driver in England did not accept my £5 scottish note.

~~~
gaius
Hence the origin of the saying, to get away Scot free.

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ajtaylor
As an American living in Europe I can say that I love having 1 and 2 Euro
coins. Yes, they sometimes can get heavy and they do jingle. But that's more
than offset by the convenience. Quarters seem very puny in comparison now.

As a side benefit, a pocket full of coins can mean you're carrying around 10+
EUR. No wallet needed at all!

~~~
Luc
I take this combination of euro-cent coins with me when I go shopping: 1, 2,
2, 5, 10, 10, 20, 50.

Et voila, you can always pay exact change for any cent value with only 8
coins.

~~~
Yaggo
I take a plastic card instead. Voilà, I can always pay the exact sum!

~~~
Luc
Ah, well, where I shop that's not always an option. Besides, I like leaving a
tip when I get served.

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fbnt
These days there isn't really need to keep using traditional currency anymore.
Since I don't get charged for using them, I use cards even for <5€ payments
now and I hardly carry real money with me anymore. It's also much easier to
monitor your expenses this way. There are still an enormous amount of
shops/businesses that only accept physical money, but I think the world will
be ready for electronic-only currency in 10-30 years time.

~~~
silencio
> Since I don't get charged for using them...

That cost is factored into your purchase somehow, and if it isn't and it's a
problem to the retailer paying the fees, it will be eventually. Transaction
fees seem insignificantly small, but they'll easily chew into any profit
margin and more for a payment as small as €5 ( _as small as_ , not _less than_
). This is why at least in the US, lots of retailers try to enforce minimum
purchases, tack on surcharges, and have differing prices for card and cash
payments even if it's against the terms of their merchant agreement.

There's also that whole aspect of dealing strictly in cash being convenient
for tax fraud and purchases that can't easily be traced. Those two are
possibly the biggest stumbling blocks for an all electronic currency. Case in
point: I love the idea of going that way because it makes my finances easier
to manage, but I hate that my CC company already tracks _what_ I buy with my
card to determine my credit-worthiness and more that has nothing to do with
fraud monitoring, and it's frankly none of anyone's business what I buy with
my own damn money if I have had no trouble paying my bills in full on time for
years on end.

There's so many pros and cons here, I really don't know which way to go.

~~~
electromagnetic
Credit card is a percentage of the purchase price. Mastercard/Visa charge
roughly 2%, and IIRC roughly 1.7% on their debit cards. I know here in Canada
debit charges through the Interac system are a flat fee between $0.05 and
$0.25 and can be charged as a surcharge by stores (however as far as I can
tell they're charged full service fees if they surcharge it, like many
convenience stores).

However, because of the Interac system's flat fee some businesses will give
you a 2% credit for using a debit card over a credit card.

Here in Canada we have a $1 and $2 coin and I find it saves a lot of hassle, I
can pay for a lot of things by just grabbing my change. I don't like taking my
wallet out in a crowded area when I've got a couple 100 dollars in there.

~~~
silencio
That ultimately depends on the merchant agreement. Regardless, it's a
percentage and/or a flat fee (and usually the flat fee that makes no sense for
micropayments), and varies depending on other factors (which creditor, what
kind of card, etc). But that's not what I'm talking about. Typically in the US
the merchant is responsible for paying all fees and is not allowed to
explicitly charge the customer for it in any extra way except through methods
like "cash discounts". So the customer will pay for this some other way (like
raising the price of the product). I guess that's the difference I'm
nitpicking about here...just as ridiculous as it is ok to provide cash
discounts but not credit card surcharges, it's ridiculous to claim you're not
paying anything for those additional fees, because retailers that have to deal
with the possibility of micropayments aren't exactly oblivious to the fact
that a percentage+flat fee just killed their profit on a $2 purchase.

There is a lot more to the cost of accepting credit cards than just the
transaction fee, just as there are costs of accepting cash. It's just that the
benefits of accepting cash (i.e. tax fraud as I mentioned above) is a lot more
appealing than accepting card payments to many businesses. But I digress...

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Corrado
I personally would use the $1 coin if retailers would give them to me. I'm not
going to the bank to make a special purchase of coins, but if they come back
in change I'm happy to take them.

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marknutter
I was at the MN State Fair last year with a buddy and he tried to pay for some
milk with a Sacajawea $1 coin and the teenaged girl lamented that they didn't
take foreign currency. After we told her it was American money she had to
confirm it with a superior. Needless to say she looked pretty embarrassed, but
I don't blame her, nobody seems to use these dollar coins.

When I was traveling in Europe I really liked having change that was actually
worth something. I especially liked the English Pounds because of their heft
and the sound they made when clinked together in the hand.

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CognitiveLens
Article headline should be "The US loses money as Congress appears unable to
phase out $1 bills". There's really not a 'hate' issue here, and people will
use the coins, but it's so painfully obvious that there won't be a change
until the bill is phased out. It amazes me that the coin was even allowed into
production without a plan to get rid of the bill - I can't believe that the
hope was to have "a greater variety of currency media for circulation", which
seems to be the only real effect of the coins' introduction so far.

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ohashi
I hate coins. Does't matter the currency. I don't have a change purse, no coin
slot in my wallet. They rattle around in my pocket and are unnecessarily
heavy.

~~~
ugh
_I don't have a change purse, no coin slot in my wallet._

Well … there’s your problem.

~~~
ohashi
I don't want to carry those around either. Honestly, I prefer just having a
few bills and a credit card.

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SandB0x
In England there are some Scottish notes in circulation, which as far as I
know are legal tender*, but many people still don't want anything to do with
them.

A friend worked in a pub where they had always had a Scottish £5 note in the
till to give as change. More often than not the customer would just put it
straight in the tip jar.

Edit: I am wrong about the concept of legal tender, and smazero is right.
Interesting. Check out the few paragraphs beginning:
[http://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling...](http://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling#Everyday_use_and_acceptance)

~~~
smazero
I think 'legal tender' doesn't mean what people think it means; I heard some
lawyer talking about this on the radio the other day: I don't remember
exactly, but the gist was that the term legal tender is just to do with money
that can't be refused as payment for a debt imposed by the courts.

For example in the UK no coins are 'legal tender' as they can be refused as
payment for a debt, but still all shops will accept them as they have a fixed
value relative to legal tender.

Alternatively my watch is not legal tender, but if I offered it to a shop
keeper in exchange for a newspaper, there is nothing stopping the shop keeper
from accepting it.

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loewenskind
The US seems to have the worst currency setup of anywhere I've been. You have
to put in a lot of effort to not end up with a wallet thick with one dollar
bills and pockets full of pennies. The UK seems pretty bad as well since the
the coin size doesn't seem to have much correlation to how much it's going to
be worth.

The EU is better, but I find Switzerland the best so far. No bill smaller than
10, all notes are different sizes so you never accidentally pay with a 100
instead of a 10. A nice big 5cf coin (it's cool to be able to buy a new DVD
with 3 coins or less) and no pennies. There is a .05 coin but it's rare, most
prices are to the nearest 0.1. Every time I go back home I remember how
painful the US system is by comparison.

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julius_geezer
I tend to have them only if I've received them in change from a vending
machine at the post office. I can't say that I have a preference one way or
the other.

Back 30 years ago I longed for the Washington Metro Farecard machines to
accept them--in those days you about had to send your bills had to be all but
starched and ironed before the machines would accept them. The technology
improved tremendously, but as far as I know the machines still don't accept
dollar coins.

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eggoa
"coins people hate and don't use"

I was sure that this would be about pennies. Sure, you get them as change but
I've never _spent_ one in my life.

~~~
jdhopeunique
There needs to be some plan to phase out pennies. Perhaps have retailers round
prices after tax to the nearest multiple of 5 or nearest quarter and phase out
nickels and dimes as well.

~~~
mattmillr
We should get rid of at least pennies and nickels (both of which cost more to
make than they are worth.) The last time the US phased out a denomination --
the half-cent piece in 1857 -- it had more purchasing power than a dime does
today.

Besides, if we got rid of the penny and nickel, the size of the dime would
finally actually make sense.

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ZachPruckowski
I'm surprised nobody's mentioned vending machines and tollbooths. In an age
where every transaction more than about $10 is going on my credit card and I
can't buy much of anything for less than $3, my primary use for coins and
dollar bills is automated machines, all of which would need to be re-
configured to take dollar coins.

~~~
prodigal_erik
These coins have the same size and weight as the
<http://en.wikipedia.org/wiki/Sacagawea_dollar> that debuted ten years ago.
Are there vending machines out there that still don't take those, or that only
take bills?

~~~
slouch
yes, there are plenty of vending machines that date the dollar coins and are
unable to accept them. my local car wash and every parking meter i have seen
in my county included.

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mattwdelong
As a Canadian in the US, I miss my Loonie (1$ CAD Coin). I now open my wallet
and say, "oh I`m good for cash, no need to stop at the bank" only to realize
when I go pay for something that I have 10 x $1 bills. The ability to
determine value of a bill based on colour, in Canada, is useful too.

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blahblahblah
It's actually a good thing that Americans refuse to accept dollar coins. The
printing costs to make paper $1 bills are really the only check & balance that
the people have against the devaluing of our currency through excessive
printing of money.

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terrble
This is a problem, sure. But what about pennies? No one needs or wants those.

~~~
matrix
Agreed. Unfortunately there's a group of lobbyists that have successfully
prevented efforts to eliminate the penny (these groups primarily being "Save
the Greenback" and the cotton industry).

Sometimes I think we'd be better off eliminating congress...

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beagle3
Part of the reason is that American wallets don't have a coin purse inside
them -- the reason for which is that coins aren't that useful. Catch-22

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markbnine
A nice example of designing features that nobody wants.

~~~
Luyt
Indeed: I think it's indicative of a system which is too bureaucratic.

