
Canada ditches the penny - codergirl
http://www.globaltvedmonton.com/money/penny+to+disappear+from+coinage+system+minting+to+end+by+fall+budget/6442610744/story.html
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mmastrac
This line-item is basically a smokescreen for cutting all sorts of other
important things (like the research tax credit, SR&ED; various social
programs; the budget for our national broadcaster, the CBC; and the salary of
the Chief Electoral Officer):

[http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_b...](http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_billion_in_cuts_over_3_years_and/)

Amusingly this particular cut was actually a private member proposal from the
NDP (the left-most mainstream party).

~~~
dfc
I'm not very familiar with canadian politics. Why is it amusing that the NDP
proposed this?

~~~
mhyee
The party that implemented this is the Conservative party, the right-most
mainstream party. The two parties generally don't see eye to eye, to put it
lightly.

~~~
dhughes
The Conservative party was decimated years ago and was nearly eliminated then
eventually the Reform Party which became the Canadian Alliance merged into the
Conservative party (both parties were dead anyway).

Reformers were certainly farther right compared to the members of the old
Conservative party. Now there is a Conservative party it's the same skin on
the outside but fundamentally different, it couldn't be more different, it's
pretty much the Reform Party 2.0 yet people see "Conservative Party" and vote
for it.

That's my take on it anyway.

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kmm
A brilliant decision. Now if we could only get rid of our 1 euro cent here.

According to some inflation figures I quickly found on the internet, a (US
dollar) penny had a hundred years ago 23 times as much buying power as a penny
nowadays. That means the smallest denomination was then was worth almost as
much as a quarter is now! People could get by without smaller coins then and
they should be able to work perfectly fine now without worthless pennies.

~~~
phillco
Even better: the US used to have a half-cent but they abolished it in 1857 due
to its lack of value. With inflation, it's worth more than today's dime.

~~~
alasano
Some would argue that your example is almost exactly as good as the other one
given.

~~~
schiffern
His example features actual abolition of an existing coin, not just deciding
"well, this ought to be granular enough" when designing money.

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taitems
Just as a point of interest, Australia removed the 1 and 2 cent coins from
circulation back in 1992. Prices have been rounded to the nearest 5 cent value
when paying with cash ever since. A comment on this thread said that it's
madness, but it's all someone my age has grown up with.

~~~
_frog
As a fellow Australian the pennies aren't what I found most bizarre about US
and Canadian currency, I more often found myself getting tripped up by the
fact that listed prices in US and Canadian stores never include sales tax.

~~~
DerekL
Most stores in the US don't include sales tax in the listed price, but some
do. Examples include vending machines, Starbucks and other coffee shops (but
not usually locations inside book stores and supermarkets), and concession
stands at concerts, sporting events, and fairs. They probably do it because
they don't want to deal with pennies. Concession stands often go further and
use whole dollar amounts, since the prices are high anyway.

IIRC, some post office vending machines will take pennies, because they can
sell stamps one at a time.

~~~
blahedo
When I was in grad school there was a pizza-by-the-slice place where all
prices were tax-included and an exact multiple of 25c. The only coins in their
register were quarters. If you gave them any other coin, they counted it out
and dumped it in a jar next to the register. A manager claimed that it was way
more efficient and easy to count that way (and throughput mattered a lot
during busy times). It also meant that a large percentage of the time the
customers had exact change counted out before they even got to the register,
which meant they didn't even need to make change and throughput increased
further.

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alanh
Reminds me of an anecdote about a woman who balanced her checkbook by rounding
all amounts to the nearest dollar. Her father eventually heard about this,
freaked out, and re-tallied everything — and ended up within a dollar of her
previously-computed balance.

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randlet
"They cost more to produce than they are worth, nobody likes them, they have
no commercial value."

My very first (very primitive) public facing webpage was dedicated to
abolishing the Canadian penny. Good riddance!

~~~
rogerbinns
CGP Grey has an excellent youtube video on the whole issue for the US. The US
currently makes 4 billion 1 cent coins annually. And they have already been
abolished at US military overseas bases.

<http://www.youtube.com/watch?v=y5UT04p5f7U>

(Come to think of it, doesn't the US military use a lot more metric system
than the general population. If so, this would be a good reason to increase
the military since it would appear to be the only way progress happens!)

~~~
philwelch
The US military also uses a 24-hour clock (2000 hours instead of 8:00 PM) and
consistent little-endian date formats (29 March 2012 instead of March 29
2012).

~~~
rogerbinns
That does it. I'm now in favour of compulsory military service for everyone,
since that is the only way US citizens will be modernized.

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damncabbage
"And some old adages will likely fade away, too."

Australia hasn't had pennies since the sixties and we still use phrases like
"in for a penny, in for a pound."

~~~
blahedo
The US hasn't had pounds for _centuries_ and we still use phrases like "in for
a penny, in for a pound". :)

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ww520
Does that mean pricing psychology would work differently? 19.99 would be out
of fashion?

~~~
mahyarm
It will turn into 19.95 to keep the same psychology. Many stores already vary
the last digit to mark the status of the item. Such as 97 for clearance items
and so on.

~~~
aoprisan
actually, it'll be $20.00

~~~
artursapek
I sure wish it would. I never really understood the supposed psychology behind
.99 and .95. To me, three nines looks less welcoming than three zeros.

~~~
mahyarm
It's so it doesn't cross the subconscious barrier of "under 20 dollars".
$99.99 doesn't cross the subconscious barrier of $100 for example. It's
probably been A/B tested to death, since it's so widespread among retailers.

~~~
artursapek
Wow. I'd like to think people aren't wired like that, but I guess
subconsciously there's lots of exploits like this.

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dholowiski
I suspect that POS software vendors will make billions of pennies selling
upgrades.

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kitcar
I wonder how this will affect sales taxation, as the tax rate isn't a multiple
of 5 in all provinces, and hence the amount of tax collected on a purchase
will have to be either be rounded down or up.

~~~
msbarnett
"If the customer has the pennies, they can use them. Payments with debit or
credit cards, or cheques, can also be to the penny. But if the customer is
paying cash and doesn't have the pennies, the total will go up or down to the
nearest nickel."

I gather that's post application of sales tax.

~~~
mindslight
Presuming a uniform distribution of price endings, existing pennies are then
worth 1.43 cents (you only spend them when the price is congruent to (0.03 or
0.04) mod 0.05).

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meric
Now is a good time to buy up all the pennies for cheap. Melt them down the day
they're abolished and sell it all as scrap metal (or don't sell if you think
it'll hold value like gold does).

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CrystalKoo
Great in a way that it costs more money to produce a penny than what it's
worth.

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baltcode
This is simply patching over the underlying problem - dilution in the money
supply. There is no reason why countries like the US and Canada who have only
become a lot wealthier in the last 200 years should have such inflation. Stop
printing money, and the penny will remain valuable!

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vaksel
i wonder if Canada has that bit, where the prices you see in the store are the
final prices(i..e with tax already calculated in)

~~~
UnFleshedOne
No, the prices are before tax. I think there is even a law against showing
prices with tax for whatever reason.

~~~
brunoqc
I thought they don't include tax so they don't have to change it every time
the tax rate change.

~~~
alsocasey
I suspect pricing of goods changes more often than sales tax rates.

------
jstalin
The glory of central banking.

<http://coinflation.com/>

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jowiar
Ridiculously simple solution: Drop the hundredths place entirely. Kill
pennies, nickels, quarters, bring back $.5 pieces.

A tenth of a dollar is enough precision for any realistic transaction in the
United States.

~~~
NZ_Matt
New Zealand removed the 5c coin form circulation in 2004, leaving us with $2
,$1 , 50, 20c and 10c coins. Electronic card transactions are charged to the
nearest cent and cash transactions are rounded to the nearest 10th.

The transition was straight forward and I didn't hear any complaints.

~~~
_delirium
It works like that in Denmark as well; credit/debit transactions are charged
to the full 0.01 kr precision (an absurdly small amount, about 1/10 of a
eurocent), but cash transactions are rounded to the nearest 0.5 kr.

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maeon3
Is the ditching of the penny an alarming event like the addition of a zero on
the largest denomination of currency? Why do I work hard to exchange my labor
for money that is being inflated on purpose?

~~~
Egregore
To exchange that money for goods. To invest those money into something that
will bring you more money back.

------
Nesterov
The beginning of the end.

~~~
burgerbrain
...of pennies.

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seanmccann
_If the customer has the pennies, they can use them. Payments with debit or
credit cards, or cheques, can also be to the penny. But if the customer is
paying cash and doesn't have the pennies, the total will go up or down to the
nearest nickel. For example, $1.02 will become $1 and $1.03 will be $1.05._

Something just feels wrong about rounding. The customer would always get
screwed. They should solve this problem by using the federal sales tax to
round up/down. $1.25 + 5% = 5¢ of tax instead of 6.25¢.

That said, it would make sense for merchants to round down for cash purchases.
It would be a tiny incentive to use cash rather than credit cards (which cost
the merchant 2-4%)

~~~
sanswork
They don't have pennies in Australia and they just round up or down to the
nearest 5c interval. I assume they will do the same in Canada.

~~~
waqf
To be precise, that's only true if you pay in cash. Pay with plastic in
Australia and you're charged by the cent.

