Friday Flight - Purging Pennies, Financial Fights & Phantom Wealth #945

Production Costs

Joel Larsgaard and Matt Altmix explore the financial burden of producing pennies and nickels, revealing that the cost to mint these coins far exceeds their face value. Joel highlights that a nickel costs $0.14 to produce, which is nearly three times its worth, while a penny costs 3.7 cents to create 1. This discrepancy raises questions about the practicality of continuing their production, especially as digital payments render small coins increasingly obsolete. Matt notes, "Pennies mattered a whole lot more like a long time ago... but digital payments have essentially killed the need for the penny to exist" 2.

   

Transaction Impact

The inefficiency of small coins extends beyond production costs to their impact on transaction speed and convenience. Joel expresses frustration over the time added at cash registers when people pay with coins, a sentiment echoed by the National Association of Convenience Stores 1. They argue that eliminating small coins could streamline transactions and reduce checkout times. As Joel puts it, "when people start leaving a monetary unit at the cash register for the next customer, essentially they're citing its insignificance" 1.