Apparently, there’s yet another crazy idea floating around in Washington–and by “crazy,” I mean “no one has stopped to consider the ramifications of this on Main Street.” A bill recently introduced by Rep. David Schweikert (Ariz.) and Rep. Jeb Hensarling (Texas) is aimed at retiring the dollar bill.
Okay. At first glance, the math makes sense, given what paper currency costs to produce.
But.
When you think about it a moment longer, from a local brick and mortar’s point of view, a few glaring realities come to light:
1. Coins are wildly inconvenient for consumers to carry (heavy, bulky), as proven by the fact no one uses the current $1.00 coin.
2. Even though they’re talking about retiring only the $1.00 bill, customers who purchase with a $5, $10, $20, etc., will most likely get stuck with some of these heavy, bulky coins when they’re given change, which means…
3. …fewer consumers will use cash because it’s too much hassle, which means…
4. …more purchases will be made on credit and debit cards, which means…
5. …ballooning merchant processing fees, further decreasing the amount of money left over to hire employees, stock shelves, and pay taxes–both commercial property and sales.
If the goal is to further cripple independent brick and mortars, and by extension, cut even deeper into the local tax base, well then…great bill, let’s vote.
If, however, Congress wants to think for a moment about the financial fallout that comes from increasing merchants’ overhead while handing yet more of their revenue to the banks, I’ll be the first to stand up and cheer.
Dear Washington,
Please don’t take the money away.
Sincerely,
Local Merchants in Your Home Town
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Sorry, but I totally disagree. The whole point of coins vs. paper money is that you’re supposed to use coins for everyday transactions and paper money for those occasional transactions that exceed everyday spending enough to make them too big to use coins for. When today’s denominations of currency were created, the $1 bill was worth the equivalent of $23 in today’s value. The denominations haven’t changed in 150 years, even though the value of a dollar has dropped substantially. We should have not only $1 coins but $2 and $5 coins. Other countries around the world have figured this out, including our neighbor to the north, whose smallest bill is a CA$5 note. Meanwhile, the penny and nickel persist despite their near-perfect uselessness. We’d be better off retiring those coins and lopping a decimal point off all our financial transactions.
I disagree with the first premise. I don’t think coins are wildly inconvenient for consumers. Most every other country in the world has a coin for what is approximately $1 US. Our nearest neighbor Canada has had this for some time, and although initially there was grumbling, it settled in with no trouble and now the $2 CD coin is out.
Personally I would prefer to have dollar coins than bills – nicer tactile sensation, easier to distinguish coins than bills, etc.
And I make this comment as a former retail shop owner and fully understand the concern about credit replacing cash!
Just because other countries have dollar coins, doesn’t mean people use them. We have it too, no one uses them. It would greatly impact bank and atm’s and armor truck deliveries. Not to mention the cost of implementation and cross over. Plus added cost of upgrade machinery to make the larger demand of dollar coins (if law passes). Not first time this has come up, not the last.
The only reason I don’t use dollar coins is because no merchant ever has them to give me in change! I’d gladly take them–I even have asked for merchants I shop at to use them!
Canad has the Looney and the two-ney. Norway’s smallest bill is currently worth over $8.50. Mayc countries have removed smaller bills from their currency. Perhaps you should look into the data from these countries before insisting this is a bad idea. Know this, the public will not use coin if they are not forced to – I only this spring finally saw a dollar coin here in the US. I was unable to even get them from my bank. But as Canada shows, dollar and 2-dollar coins do work.
They might even jump start the savings in teh US. After all, many people put all their coins aside at the end of the day to go into the piggy bank. Now instead of just quarters and dimes, they coudl have dollars. Why do we not see more 50 cent pieces, by the way? I may have to start making an effort to get those and use them.
Here’s another DISAGREE. I think it makes perfect sense.
Having traveled in Ireland and Spain, I have to say that the euro coins were easy to use, easy enough for a foreigner to grasp, and that everyone used them. I also agree with the comment that many people won’t voluntarily change their habits, this is something that they would have to be forced into. Kind of like roundabouts (very efficient way to manage traffic flow once the population understands how to navigate them). They get a lot of skepticism until you actually give them a chance.
nancy wrote, “…the public will not use coin if they are not forced to…”.
Usually, we in this country are in favor of the freedom of choice. Since both forms of a dollard are currently available, consumers are apparently choosing to use the paper bill. In the news, recently, was a story on how much the federal reserve is spending to store all of the dollar coins congress required them to produce. So, maybe your local bank has something against them.
Have you ever noticed that men, when on hand, are always the one to dig their hand in their pocket for change. Maybe women (most of my customers) don’t like to mess with coins.
As a shop owner, I’m still stuck on the idea that “the customer is always right.” So, let’s just stay with the status quo and let the consumer decide which “dollar” they’d rather tender.
Susan B, and Sack-uh-Gee,
dollar coins don’t work for me.
that’s as good as i can do.
Cinda, I also respectfully Disagree. My wife and I own and operate 3 carwash locations. I find that when dispensing change from $5, $10, & $20′s, the golden presidential dollar coins are Great!
1. They are much easier to count and customers find them faster to drop into the coin slot.
2. One dollar coin is lighter that 4 quarters.
3. For the collectors, the presidential dollar with the different presidents are very collectable.
4. As for more use of debit and credit cards, My sales records indicate that our customers spend almost twice as much time and there for spend more money at our locations. And without any effort on my part, the money is deposited into the business checking account within two days. Merchant fees are a cost of doing business, but with the increase in sales, I currentlly see it as profitable to continue to keep my credit cards accepted signs up.
As a consumer, I can tell you that I’ve enjoyed using euro coins on all my trips to Europe. I’d gladly switch to $1 coins, except that (even though they are “available”) I never get them. Where would I get them from right now – the bank? (I usually get cash from an ATM – so nothing smaller than $20s) a merchant? (no luck there). From my experience, having euro coins actually meant that I spent them more easily than I would have if it were paper money. With dollar coins, I’d be MORE likely to have them around for smaller transactions – so I’d use my debit/credit card only for bigger ticket purchases.
How about we leave paper dollars alone? Nobody wants to tote around $20 in $1 coins in their pockets and that’s the reason why they haven’t been widely adopted here. Sure there are a small number of areas where they are useful(vending machines), but paper folds and is quiet. I’ve had to carry a large number of $1 coins(from a change machine) and you can hear them clanking around in your pocket with every step you take. Also, how are you supposed to fold a solid coin into the G string of your favorite dancer? The answer is you can’t.
You see, American jobs would be at stake if you removed the paper $1 bill from circulation.
My family was in Europe all summer and we became very comfortable using both the 1 Euro coin as well as the 2 Euro coin. I can’t even remember if they have a 1 Euro paper bill. If they do, we never used it. The coins are not “heavy”, “bulky” or “wildly inconvenient”. They make perfect sense when you consider all of the savings from no longer printing paper dollars. I personally would support greater use of dollar denomination coins in the US. And, yes, I do use the dollar coins now.