The Best Anti-Penny Rant Ever?(freakonomics.blogs.nytimes.com)
freakonomics.blogs.nytimes.com
The Best Anti-Penny Rant Ever?
http://freakonomics.blogs.nytimes.com/2010/09/09/the-best-anti-penny-rant-ever/?ref=nf
40 comments
OT, but on my first week in Oz I had bought a cup of coffee for $4 (I could see them, they're four small copper coins.) then went through my pockets to get rid of small change as tips, much to the waitress' resistance. So I gave her something around 6 - 10 smaller copper coins, much smaller than $1 coin.
Turns out, the smaller coins are actually worth $2, and I must have given her $12-$20 worth of tips for a cup of coffee.
Turns out, the smaller coins are actually worth $2, and I must have given her $12-$20 worth of tips for a cup of coffee.
Could have happened in England, too. Just look at how big the 2 pence pieces are. There are almost the same shape as 2 Euro coins.
New Zealand is much the same, although we eliminated the 5 cent coin as well about 2 years ago (NZ dollars are worth about 9/10ths of Australian dollars, and 7/10ths of US dollars).
Stores still do pricing in exact numbers of cents and only round the final result, which means the price you end up paying with plastic is slightly different than what you'd pay with cash.
Stores still do pricing in exact numbers of cents and only round the final result, which means the price you end up paying with plastic is slightly different than what you'd pay with cash.
I remember at the time thinking that chaos would ensue, but can now barely remember all that 'copper' - in fact, they should ditch the 5c and 10c pieces as well. As it is, I only really use $2 and down for the office beer tin.
Was in the US last month and the only time I saw a $1 coin was when we used a machine to change a dollar bill into a $1 coin to use in an adjacent ticket machine!
Was in the US last month and the only time I saw a $1 coin was when we used a machine to change a dollar bill into a $1 coin to use in an adjacent ticket machine!
The same thing goes for Finland. When we adopted the Euro, it was legislated that cash purchases are rounded to the nearest five cents.
Finnish one and two cent coins are minted in small batches which go straight to collectors. You never see them in circulation.
Finnish one and two cent coins are minted in small batches which go straight to collectors. You never see them in circulation.
And get rid of the dollar bill, too.
Back in the 70s you could buy a meal with the spare change in your pocket, and you could buy a Coke by dropping a coin in a machine. Now you've got to jam a bunch of dollar bills into a flaky bill reader. It's ridiculous, and it only gets more ridiculous with each passing day as inflation takes its toll on the value of a dollar.
Back in the 70s you could buy a meal with the spare change in your pocket, and you could buy a Coke by dropping a coin in a machine. Now you've got to jam a bunch of dollar bills into a flaky bill reader. It's ridiculous, and it only gets more ridiculous with each passing day as inflation takes its toll on the value of a dollar.
Agreed. And jamming 50 dimes into a washing machine is equally ridiculous.
In the UK we have a 2GBP coin, which is roughly $5. Imagine how useful it'd be to have $1 $2 and $5 coins for vending machines etc.
In the UK we have a 2GBP coin, which is roughly $5. Imagine how useful it'd be to have $1 $2 and $5 coins for vending machines etc.
2GBP is 3.09USD currently.
The government has pushed $1 coins on several occasions before but they have never been able to get it to catch on.
> The government has pushed $1 coins on several occasions before but they have never been able to get it to catch on.
They would catch on real quick if you got rid of the dollar bill.
They would catch on real quick if you got rid of the dollar bill.
How would "ballers" show how much money they have then?
You still get them as change from Post Office vending machines, but that's about the only place that uses them. Stores seem confused if you try to use them, so if I get a dollar coin from the Post Office's machines, I usually use them in parking meters, which (at least around here) take them just fine.
I try to use them... whether the new Presidential ones or otherwise. People get angry and I say, you'll take your dollar coins and like them!
Force people. Get rid of $1 bills which are useless, and produce $1 coins.
"[Americans] are a people resistant to change." --MidnightRambler
I was talking to a friend about this and we started talking on the lack of small change in most european countries. They can avoid small change because everything is priced at a rounding point. A hamburger costs 2 euros, not 1.99 + tax. Tax is already included in the price. But we came across the reason why it wouldn't work here. A company can't have a set price across the board because each country has a different sales tax rate. The only way for this to work would be for the companies to bear the whole burden of the tax and charge the same for a Big-Mac in LA (9.75% sales tax) and Salt Lake City (6% sales tax). I don't see this happening in the near future.
In Australia things are routinely priced at e.g. $4.99 (including tax), but the smallest coin here is 5 cents. They just round the total to the nearest 5c, it's really not a problem.
I personally see $4.95 more often than $4.99 in Australia.
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In the city where I live (south germany), Burger King has had 99 cent burgers for a long time (now it's 1.29 euros or something). People here fiddle around with cent coins all the time.
> The only way for this to work would be for the companies to bear the whole burden of the tax and charge the same for a Big-Mac in LA (9.75% sales tax) and Salt Lake City (6% sales tax).
That or they just charge the Salt Lake City residents as IF they had 9.75% sales tax. Or they do some fancy booking, and charge the LA people a little less than 9.75% and the Salt Lake City people a little more than 6%
That or they just charge the Salt Lake City residents as IF they had 9.75% sales tax. Or they do some fancy booking, and charge the LA people a little less than 9.75% and the Salt Lake City people a little more than 6%
Don't LA and Salt Lake City already have very different labour and land costs? The few percent difference in sales tax shouldn't matter too much.
Would they? I occasionally commute to Tyson's Corner, VA, an affluent neighborhood. It's easy to see that it's more affluent by the name brands on the retail stores, but the first time I really noticed it was when I was in Wendy's, and their dollar menu (typically, $0.99,) was priced at $1.15.
I thought that Wendy's had just raised their prices until I drove out of the area and noticed that the dollar menu was still in effect elsewhere.
I thought that Wendy's had just raised their prices until I drove out of the area and noticed that the dollar menu was still in effect elsewhere.
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They already round the tax to the nearest 1c, why can't they just round to the nearest 5c?
While we're talking about currency, why hasn't anybody in the US(to my knowledge) made a payment processor that works by generating transaction numbers, and then sending those numbers instead of sending people payment authentication credentials?
Let's say George wants to give Sally $5.
1. George logs into his PayCo. account. He clicks generate transaction, amount $5. The server returns a very long randomly generated key. 2. He copy-pastes that key into Sally's pay-info server. 3. Sally sends that key to PayCo.'s server, money changes hands, and the key is no longer valid.
Let's say George wants to give Sally $5.
1. George logs into his PayCo. account. He clicks generate transaction, amount $5. The server returns a very long randomly generated key. 2. He copy-pastes that key into Sally's pay-info server. 3. Sally sends that key to PayCo.'s server, money changes hands, and the key is no longer valid.
I've thought about a similar idea, except in mine, you send a "locked" payment via email to the recipient, and give him a pin-code to unlock the payment. This allows for exchange of money in person (say, you're buying a used car from someone, and want to see and drive it before handing over the money, and don't want to carry the cash - neither party trusts each other to wire the money ahead of time or after).
The recipient can easily verify and claim the transfer using phone, SMS or online.
The recipient can easily verify and claim the transfer using phone, SMS or online.
That is actually very close to how paypal worked in its original form.
Google for Money Beamer.
Google for Money Beamer.
sounds like alertpay
but better
but better
Obviously, I agree. I think that pennies are unfortunate for the opportunity cost, among other things. I like them for nostalgia and wouldn't want them to die completely, but if they went the way of the $2 bill, that would be OK - rare novelties, not a bother for pricing.
I actually want people to use more $2 bills, they're quite lovely.
@phamilton, not sure I follow. You could just round up or down as needed?
I actually want people to use more $2 bills, they're quite lovely.
@phamilton, not sure I follow. You could just round up or down as needed?
And get rid of $1 bills, while you are at it.
My favourite suggestion about this is "rebasing", which Austan Goolsbee (among others) has written about: http://www.nytimes.com/2007/02/01/business/01scenes.html
Another thing I love about this idea: as it becomes more thinkable, people may hoard pennies. Penny shortages would make it more necessary to do something -- to combat the seigniorage loss and make the hoarder-voters happy.
Once it reaches a certain level of awareness/remote-likelihood, it could become a snowballing self-fulfilling prophecy/proposal.
So people, vote against the penny by hoarding it! You'll get a 400% return after the re-basing!
Once it reaches a certain level of awareness/remote-likelihood, it could become a snowballing self-fulfilling prophecy/proposal.
So people, vote against the penny by hoarding it! You'll get a 400% return after the re-basing!
Important not to forget valid pro-penny arguments such as
http://www.comedycentral.com/videos/index.jhtml?videoId=6066...
The focus on entrepreneurship and pitching seems particularly relevant.
http://www.comedycentral.com/videos/index.jhtml?videoId=6066...
The focus on entrepreneurship and pitching seems particularly relevant.
Hopefully this quaint historical notion of using metal buttons to represent money will just go away completely when we're able to swipe our phones for payment.
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At time 1:13:
I'm not going to watch the rest of the rant.
And the time it's taken me to write this costs me something, but I hope it contributes to HN by suggesting that you do something useful too, instead of watching this.
> So there's this very important idea in
> Economics called "Opportunity Cost" ...
> Any time you are doing something you could
> be doing something else ...
I'm not going to watch the rest of the rant.
And the time it's taken me to write this costs me something, but I hope it contributes to HN by suggesting that you do something useful too, instead of watching this.
Those are the legally suggested rules, but not every company exactly follows them; I recall hearing that one supermarket chain always rounds downward at purchase time, but rounds up if you return the product for some reason - a nice gesture.