Donald Trump tells the Treasury to stop making penny
President Donald Trump has told the Treasury Department to stop making pennies, citing production costs.
Learn to love your coins.
This is a message from Kevin McColly, CEO of Coinstar, the company behind the coin chushing machines found in supermarkets.
According to the Federal Reserve, American consumers were only able to make 16% of their payments in cash in 2023. A 2022 Pew survey found that two-fifths of consumers don’t use cash at all.
President Trump ordered the Treasury to stop building penny because production costs exceed its value. (Interestingly, the same applies to nickel.)
Many Americans view both nickel and penny as more annoying than currency. According to the Federal Reserve, typical households sit with $60 to $90 in neglected coins. Americans throw away millions of dollars of coins each year and treat them like garbage.
Coins are literally money. Why do we treat them like garbage?
McColey believes we should change our way of thinking about coins.
To state the obvious, the coin is worth the money. Coinstar converts $3 billion in coins into easy-to-use cash each year. One coin jar at a time. The average bottle gives you $58 in purchasing power.
Most of us don’t understand how much our coins are worth. So a trip to a coin exchange kiosk (or a bank, or a credit union) can bring a pleasant surprise.
“People underestimate the value of bottles about half,” McColley said. “It’s a wonderful and enjoyable experience. People have this sense of money they found.”
Certain groups of Americans (low-income households, and those over 55) still use a lot of cash, the Fed discovered, along with people who prefer to shop in person.
The coins are not messy. They are currency
For the rest of us, we think McCollie is a time for a paradigm shift. Don’t consider your coins messy. Think of them as recyclable.
“They’re metal,” he said. “And they have a long service life.”
The Treasury still covers more than 5 billion coins a year, but numbers are falling, according to Journal Coinnews.
“These are natural resources coming out of the planet,” McCollie said: copper zinc, nickel, dime, and a quarter copper nickel alloy for pennies.
His point: If Americans get serious about collecting idol coins and “recycled” them into the financial system, Mint doesn’t have to make so many new things.
Certainly, McColly has a vested interest. His company collects small cuts of coins that consumers deposit.
“You can go to your own bank or credit union and you can’t pay the fee,” said Kimberly Palmer, a personal finance expert at Nerdwallet. Both Nerdwallet and Bankrate offer tip sheets when exchanging coins for cash. Most banks are not everything, but not everything.
“A lot of people probably have hidden coins hidden around their homes, and they may have time to gather them together,” Palmer said.
McColly points out that if a depositor chooses to trade coins on retail gift cards rather than cash, Coinstar generally gives up the fee.
He is not alone in predicting the future of Penny, Nickel and their more profitable relatives.
“We were able to adopt mobile payments and contactless credit cards much slower than parts of Europe and Asia,” said Ted Rothman, senior industry analyst at Bankrates.
The pandemic has reminded us in a timely manner the amount we still rely on cash. Consumers and business owners sat on coins amid the global closure and seeded the actual coin shortage.
“We’ve frozen the entire system,” Rothman said.
Resignation Coin: Where will it end?
Trump only instructed Mint to stop making pennies, but some voices have urged America to stop using them.
The Common Cents Act, introduced by a bipartisan group of lawmakers on April 30, will close the cash transaction at the nearest five cents.
“Penny is outdated and inefficient and no longer meets the needs of our economy,” said Sen. Kirsten Gillibrand, a New York Democrat.
However, the bill was able to push the country down onto a slippery slope.
“So you want to get rid of the penny,” the New York Times meditated in a recent headline. “Do you have any plans for nickel?”
After all, removing the penny creates a new problem. As America removes the penny, the Times reported, the country will soon find its overflowing with nickel.
The government loses nearly three cents each time it is minted. In nickel, you lose almost nine cents. An increase in nickel means sudden losses.
America was able to kill both Penny and Nickel, two Money Roses on the Coin roster.
But without penny or nickel, how would consumers pay a 15-cent tab?
You can round any price to the nearest ten cents, taking your general cents a step further. But what happens to the quarter after that?
and so on.