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Ending The Penny


DonRocks
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This commentary by Robert Whalpes is strongly in favor of eliminating the penny from our economy. In one paragraph, he mentions:

Penny advocates worry that customers will be ripped off if Congress kills the penny. In a penny-free world, sellers would round your bill to the nearest nickel for cash purchases. Purchases totaling $4.98 or $4.99, for example, would be rounded up to an even $5, while those equaling $5.01 or $5.02 would be rounded down to $5. Since so many retail prices end in a 9, the fear has been that this rounding will gouge consumers.

but what he fails to address is that these bogus $4.99 prices will no longer exist. It will be $5, and the undeniable psychological marketing that has lured consumers since ... I want to mention the 1793 Strawberry Leaves Variety of the Wreath Cent, but I guess back then a penny was worth something (that particular one certainly is now). Regardless, the 99-cent pricing will be gone, happily and forever, gone (works well until you're buying a car for $17,999). :)

However, if you click through this piece on Three Big Duds, you have to wonder if a penny might indeed have some value. Worst restaurant-related piece of the year? I defy anyone to get to click number five without whispering to themselves, "What the ...?"

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My mother-in-law's name is Penny. So the title of this thread really freaked me out.

Eliminating the penny (ack!) could cause an impact to restaurant ordering, at least initially. For the first year or so, while everyone was getting used to it, people might avoid the $18 pasta where as before the $17.99 fettuccine seemed worth trying.

I won't miss this penny.

(the other penny)

(is priceless)

(in this very lucky gal's world)

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The penny will stay in circulation as long as the Illinois legislators have their say. I lived there several years during which the "no more pennies" people were bashed on a regular basis by politicians from the Land of Lincoln.

Now let's talk about dollar coins. :)

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Instead of eliminating the penny, why don't we just lop off one decimal point, and revalue everything. Then we could keep the new penny and it would have some value. I'm imagining this being like the French New Franc, where they revalued by dropping two decimal points after the post-World War II inflation.

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Instead of eliminating the penny, why don't we just lop off one decimal point, and revalue everything. Then we could keep the new penny and it would have some value. I'm imagining this being like the French New Franc, where they revalued by dropping two decimal points after the post-World War II inflation.

Not yet.

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but what he fails to address is that these bogus $4.99 prices will no longer exist. It will be $5, and the undeniable psychological marketing that has lured consumers since ... I want to mention the 1793 Strawberry Leaves Variety of the Wreath Cent, but I guess back then a penny was worth something (that particular one certainly is now). Regardless, the 99-cent pricing will be gone, happily and forever, gone (works well until you're buying a car for $17,999). :)

The $4.99 prices won't become $5, they'll become $4.95 (or, if we're rounding down, $4.97). If you then get rid of the nickel, they'll become $4.90. That marketing trick will never go away.

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However, if you click through this piece on Three Big Duds, you have to wonder if a penny might indeed have some value. Worst restaurant-related piece of the year? I defy anyone to get to click number five without whispering to themselves, "What the ...?"

R.I.P., journalism.

(yeah, I know, it's not at all on-topic, cut me some slack here)

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The rounding argument is bogus to start with, because rounding can't be avoided no matter what is your smallest unit of account. Even pennies are rounded from fractional cents that come into play based on percentages. Take markups for example -- if a merchant buys something from his supplier for 5.89, and his normal markup is, say, 1/2, the shelf price would be $8.835. When is the last time anyone saw a shelf price of $8.835? Likely it will be 8.95, or more likely 9.95. The truth is, while pricing follows general rules, the last few cents, or even dollars, is random and a work of art, and has nothing to do with mathematics or underlying costs. IMO, anybody who has been in business and done shelf pricing will find these arguments that eliminating pennies is a plot to charge more for goods and services to be hilarious.

I lived in Switzerland in the mid-1970's, by which time the 1 centime piece, their penny, was long out of circulation -- all prices ended in x5 or x10 centimes, and indeed the smallest unit of account in the country was .05 franc (5 centimes). It was not possible to write a check or enter any amount in a bank record that was not divisible by 5. The Swiss did just fine with that system. AT the time I happened to have an American Express Card. They served their accounts in Europe from the UK. They would convert charges from other countries (I did a lot of shopping in Italy) to francs, and since nobody told their UK programmers about the .05 deal, the bills would usually be in odd centimes. When I decided to get rid of the card, because they refused to honor US law about limiting cardholder exposure to credit card fraud, they sent me a final bill for something like 120.76 francs, so I wrote them a check for 120.75, the best I could do (and no I was not going to give the bastards the extra .04). For the next 1 1/2 years, every month, their computer spent about 50 UK pence to send me a bill for 1 Swiss centime. I decided to wait and see what would happen. Finally, when I was about to return to the US, I had to write them and tell them they should have a real person look at what their computer was doing.

Sometimes revenge is sweet.

.

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Uncirculated pennies, just like the billions of dollars of tax withholdings that go unclaimed each year by undocumented workers living in fear, are a recondite free gift to the Treasury--without the both of which our entire economy would collapse almost instantaneously.

Therefore, neither the penny nor the cowardly branding of fellow human beings as "illegals" will ever go away.

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In Portugal during the time I was a frequent visitor and a short-term resident there, in the late 1980s and early 1990s, the centavo existed in the circulating currency only in the 2$50 coin (two escudos and 50 centavos). I'm afraid I can't really recall how centavos were counted in practice, but there was absolutely no way of giving or receiving them except with the 2$50 coin. I have no idea how this relates to the topic at hand, but I'm sure it does somehow.

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