Penny is already dead. Will nickel be the next choice?
President Donald Trump abolished the penny because the government lost money every time he pressed it. Will nickel be next?
Last year, the U.S. Mint put pressure on the last penny.
Penny preservationists have warned that the penny’s death could have dire consequences. Confusion about how to pay bills that don’t end in 0 or 5. And as greedy retailers started cutting up everything, prices went up.
But aside from scattered penny shortages, American society appears to have weathered the loss of its least valuable coin.
Will nickel be next?
This question is logical. President Donald Trump killed the penny because the government lost money every time it pushed a penny. Nickel is also a loser.
In fact, nickel has lost more money. The Mint spent 3.69 cents to create a penny in 2024. The government spent 13.78 cents on every nickel, a loss of nearly 9 cents per coin.
Add this up and the government lost about $18 million in penny minting in 2024. On nickels, the Mint lost $85 million.
“The argument for eliminating nickel is that nickel is expensive to produce and is actually much more expensive than its face value,” said David Smith, an economist at Pepperdine University.
Nickels are larger than pennies and are made from expensive materials, 75% copper and 25% nickel, making them more expensive to manufacture. Although pennies look like copper, they are actually, or were, made mostly of zinc.
Throwing away Penny was ‘easy’
It was “a no-brainer” to eliminate the penny from America, said Robert Whaples, an economist at Wake Forest University who has long advocated abolishing the penny.
“We got rid of the penny, and I think we should, because the value of the penny was so small that it wasn’t worth the time to use it,” he said.
Whales reasoned that America’s growing disdain for the penny was inevitable. Decades ago, Gumball could be bought for a penny. Currently, the average worker earns about a penny per second. If you spend more than a second on a penny, “you’ve wasted your time,” says Whatples.
Last penny minted in the US sells for millions of dollars at auction
The last U.S. penny ever minted sold at auction for millions of dollars.
Pennies were in short supply long before the Mint stopped putting pressure on them. One big reason is that Americans stopped picking them up. Pennies fell between couch cushions and on the closet floor, clogging vacuum cleaners and landfills.
Many Americans consider nickels and pennies to be more of a nuisance than currency. According to the Federal Reserve, the typical household holds between $60 and $90 in abandoned coins, the equivalent of one or two pint-sized beer mugs. Americans throw away millions of dollars in coins every year, literally treating them like trash.
Is Nickel living on borrowed time?
But Whaples and other coin experts say the U.S. Treasury has no official plan to phase out nickel.
Americans seem to prefer nickels to pennies. Consumers are likely to keep the nickels in circulation by carrying them around in their pockets and returning them to stores, Mr. Whatples said.
The Treasury only pressed 113 million nickels in 2024, but minted 3.2 billion pennies.
“I don’t see any excitement toward abolishing nickel,” Mr. Whatples said.
Still, the era of nickel may be over.
The death of the penny leaves the nickel as the least valuable coin. Inflation erodes the purchasing power of a coin every year. Stamps have cost less than a nickel since 1968. Calling at a payphone has cost less than a nickel since 1951 (not many people use payphones anymore).
Is the nickel the new penny?
Coin experts reason that once the penny is gone, consumers and store owners will rely more on the nickel. The Mint will probably end up producing more products, and losses will increase even more.
After the death of the penny, one big unknown was how retailers would handle rounding calculations for cash transactions. Will they round up and save the consumer a few cents, or will they round up and make themselves a few cents?
The Common Cent Act, introduced by a bipartisan group of lawmakers in 2025, would round cash transactions to the nearest 5 cents and could be a fairer solution. Although the bill has not progressed, some states are pursuing their own “rounding” laws.
If the nickel is abolished, there is a high possibility that the debate over revaluation will rise again.
“Let’s say you only pay $5 for an item that costs $4.91,” said Ute Wartenberg Kagan, executive director of the American Numismatic Association. “That’s a nine cent difference. It adds up to a lot of money.”
Wartenberg-Kagan said that in the world of coins, the Darwinian struggle for survival favors coins with higher value. America earned 10 cents ($36 million) and a quarter ($166 million) in 2024. She said the Mint could make a sizable profit from dollar coins if more Americans just used them.
“Governments throughout history have had the problem that it’s very cost-effective to make big money. But ordinary people need small amounts of money. That’s the paradox,” she said.
Government researchers have spent years studying ways to reduce the cost of producing nickel, perhaps by using cheaper combinations of ingredients. The goal, of course, is to keep manufacturing costs below 5 cents per coin.
But some observers are predicting the nickel’s eventual demise, given steadily rising inflation and the gradual decline in the purchasing power of the nickel.
“It’s going to be a long time before we get rid of the nickel,” Pepperdine’s Smith said. How long? “It will take 10 to 15 years,” he estimates.
“My sense is that at some point it’s inevitable. But it won’t be right away.”
