Die Pennies, Die

Just a bit of trivia today.

In the US, The Coinage Act of 1792 (Section 20) stipulates that “cents” are not the lowest denomination of US currency. It is actually something called the “Mille” (aka Mill).

“Dollars” were “units”.

“Dismes” were “tenths” (later became “dimes”).

“Cents” were “hundredths”.

“Milles” were “thousandths”.

I don’t know about you, but I hate pennies. They just seem to weigh down my pants and take up space in my house. They are so much of a hassle that I gladly pay almost 10% in commission to have someone else count them and convert them to bills. Imagine if we had coins for tenths of a penny!

I’m hopeful that we will get rid of pennies within the next 10 years. (New Zealand got rid of 1 cent denominations in 1990 and they even got rid of 5 cent denominations in 2006! A Canadian Dollar buys you roughly 1.33 New Zealand Dollars for context, as of today.)

Die pennies, die.

Preet Banerjee
Preet Banerjee
...is an independent consultant to the financial services industry and a personal finance commentator. You can learn more about Preet at his personal website and you can click here to follow him on Twitter.
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Showing 25 comments
  • Canadian Couch Potato

    I think this is a pump and dump scheme: Preet is shorting the new cooper ETF from Horizons and he’s trying to create a slump in demand.

    • Canadian Couch Potato

      Oops, I meant “copper.” The Cooper ETF tracks the spot price of hockey equipment.

      • Preet

        You are one paranoid couch potato… but I suppose you have to find someway to keep yourself busy between rebalances… :)

  • Tracy

    I really don’t believe that they will get ride of pennies. I understand where you are coming from I just don’t see it happening. Here is why, pennies although they may be extremely useless when it comes to paying cash but more times then not you may not have the exact change to buy something out right. There for you will receive pennies, dimes, and nickels.

  • DSI Canada

    Call me ignorant but this is the first time I have heard of the mille. How small is the mille coin?

    • Preet

      There is no mille coin. It is essentially only used for accounting purposes if I’m not mistaken.

      • DSI Canada

        Ha ha ha! No wonder I have never heard of it. Thanks for the heads up!

  • Gerry

    Yup, pennies need to go. We just got back from Australia, no pennies. And there was no need for them, all of their prices have the tax included and are nice and round.

  • Returns Reaper

    We’re long overdue to get rid of the penny. I say while we’re cutting out coins, let’s join New Zealand and get rid of the nickel too. Heck, who really wants dimes any more?

    I know there have been more than one study done that compares the economic pros & cons of the penny. I think the typical conclusion of these studies are that the penny costs more than it is worth. I’d be a proponent of figuring out where the economic sweet spot is for the smallest coin and make a move for efficiency.

    I don’t profess to be a historian when it comes to monetary issues, but I did look at these two references to gather some data:
    http://en.wikipedia.org/wiki/Coins_of_the_Canadian_dollar
    http://www.bankofcanada.ca/en/dollar_book/appendixa.pdf

    Going back to 1870, Canada has never had a coin less than 1 penny. And 1 penny in 1870 would be worth about $0.27 in 2005. So if we were to transition to having the quarter as our smallest coin, we’d be in about the same situation as 1870’s Canadians.

    Prior to the introduction of the loonie, our largest coin was $0.25 (ok, technically $0.50, but they’re hardly used). So now we’ve increased our largest coin 8x from $0.25 to $2. Why not increase our smallest coin by about the same factor? If the dime was our smallest coin we wouldn’t have to explain to our children any more why the smallest coin is worth more than other coins. ;-)

    A VERY small percentage of my money flows with actual cash. I can’t see it being too much of a hardship to get rid of the smaller coins.

    • Preet

      I dig your logic here.

  • mylilypad

    I’m with you – get rid of the pennies! Just round your purchases to the nearest 0 or the 5, and it’d done!

  • SophieW

    Getting rid of the penny would certainly stop all those pesky retailers from conning people into purchasing items for ‘less than one thousand dollars’ because the price tag says $999.99 – and people actually are suckered into it! ;)

    Actually, Returns Reaper has – for me – the most convincing argument: If the penny from back then is worth ~25 cents now, is it really necessary?

    Here’s another question… when did we git rid of the cent symbol? I never see it used any more!

    • Returns Reaper

      I think we got rid of the cent symbol ever since the dawn of the digital age… where keyboards have no native cent symbol. So then you end up with stuff like $0.25 instead of 25¢. Unless you take the time to google how to type in the cent symbol! :-)

      BTW, google told me it is Alt-0162, using the number pad numbers, not the numbers at the top of the keyboard.

    • Echo

      Retailers would just price things at $0.95 instead of $0.99. Most do now anyways…

      • Bikergofast

        Wishfull thinking, Jim Flaherty would think of a way to make it an even $1.00 or more likely $1.05, the bastard.

  • CanadianMortgageAdvisor

    The existing system is too old. It needs to be reviewed and replaced if necessary.

  • Patrick

    My favourite idea, and therefore the one least likely to happen, is to eliminate pennies, nickels, and quarters, and go to a system with 10¢, 20¢, 50¢ coins like in Europe. Quarters are weird.

  • Andrew

    Is is true that the copper in pennies is worth more than the penny itself? I agree that we should get rid of them…the only tough part is execution. I think retailers need to make the pricing such that pennies wouldn’t be necessary anyways…but prices are also affected by taxes. Maybe rounding is the best solution but I think some people just wouldn’t be OK with that.

  • Geoff

    Ahhh the poor penny. I see the rage about the venerable copper piece misplaced.

    This is a system-wide problem and the penny is simply doing its job by pointing it out. Why not point the anger away from the measuring rod and direct it to where the problem actually is: inflation. Your money is being quietly confiscated over time, the penny is simply trying to wake us up to that fact.

    Trying looking at pennies from the equally valid point of view: copper didn’t go up – the value of your money went down.

    • Andrew

      Interesting take Geoff and a very valid one too.

  • Daniel

    Bring back the farthing!!!!

    Muwahahahaha…….

  • Future Money-Bags

    I never use pennies, and whenever I do get some change back that consists of pennies I throw it in my change jar at home. And if I am ever short a couple cents on a purchase, the person at the till never cares, because most businesses that accept cash for purchases do not use pennies either. They throw them all in a bucket until someone unforunate has to roll them up or goto the bank.

    I use my CC for almost all my purcahes, and only use cash for things that do not accept Credit cards (yet). I assume everything will accept it soon enough. I never have change in my wallet for more than 1 day, it gets emptied into my change jar at home as well. :)

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