Monday, April 27, 2009

Pennies: For or Against

This article from Torontoist talks about one of those kitschy tourist machines that, for the price of $2, will squish a penny and engrave something on it for you; in this case, something specially designed by an artist. Technically it’s against the law to deface money, so I’m hoping goons from the Royal Canadian Mint don’t come knocking with mean faces and lead pipes.

The article also talks about a 2007 study which debates whether or not Canada should stop using pennies. Turns out 63% of businesses are for it, as are 42% of consumers (33% against, 25% neutral).

When pennies were in the news a couple years ago, I was originally neutral (maybe leaning a bit more towards “against”) as to whether or not we should get rid of them; what the hell would everyone do with all those old pennies, would retailers have to change their systems or price points, etc. Though after visiting Australia (where they do not use pennies) my opinion is leaning slightly more towards “for”.

Australia and New Zealand got rid of pennies in the early 1990’s and either round up or down to the nearest $0.05 (so if your total is $9.02, you only pay $9). Though it may seem foreign and weird to us, I think it’s a pretty good option. The 2007 study, conducted by Desjardins, says it takes the government about $130 million a year to keep pennies around (production, storage, shipping, etc) and estimates that about 20 million pennies each year don’t go straight back into circulation, instead ending up in dust-covered jars and piggy banks. If we eliminate pennies, that’s a pretty big saving that could be used elsewhere (I’d like to think it would go into helping children, the needy or community programs, but in reality it would probably go towards putting up new plaques around cities or refreshing the paint in Parliament Hill parking lot). By getting rid of pennies we have one less coin to carry around and one less thing being produced (which could maybe lead to less pollution?). And you wouldn’t have to worry about getting $0.98 back if you didn’t have those extra two cents.

On the flip side (and after an unusually candid conversation with the president of my company) if we stop using pennies, retailers may start charging more for their goods and, even though it seems like it would all even out, we would probably end up loosing a few bucks because of it each year. “It’s my money, I want to keep it” is one point of view.

So lets say that they do end up getting rid of pennies – what do we do with them? Give them to Africa? Use them for pipes or cooking pots? Do a big tradsies with the US? Lots of statues? As always there are pros and cons to the “pennies” argument – what are your thoughts?

1 comment:

  1. The minute I heard that Australian did away with pennies ages ago, I thought, man, is that ever a great idea.

    Pennies are a waste of space and money. I don't think that prices will increase due to abolishing the penny, and if it does, it would only be a few dollars a year, like you mentioned...

    It is sad that there is the hoarding money point of view. It seems even when it comes down to pennies, a mere couple of cents, people are hesitant, even suspicious, to part with them. No wonder our taxes can't be increased.