Should we save the penny? - East Valley Tribune: Get Out

Should we save the penny?

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Posted: Monday, February 10, 2003 8:34 am | Updated: 2:01 pm, Thu Oct 6, 2011.

The glint catches the eye — the flash that comes from the sun reflecting off the coin’s copper veneer instead of the concrete that it lies on. Further inspection isn’t really necessary, because only one common U.S. coin isn’t silver.

(We’re disregarding the new goldtone dollar coin, which at last check was pretty much available only at banks or as change from U.S. Postal Service stamp-vending machines.) Who picks it up? It is, after all, only a penny.

Only?

The value of one 1-cent coin may be small change, but in 2000 the seigniorage — the difference between the cost to mint a coin and its face value — from the penny earned the U.S. Treasury $24 million, according to the U.S. Mint.

That’s not good enough for a real penny-pincher, says U.S. Rep. Jim Kolbe, who represents much of southern Arizona. Kolbe’s plan to modernize American currency includes reducing circulation of the penny. Minting fewer of the coins, for starters, leaves mint machinery free to produce foreign currency for a larger profit than the cent offers.

"The U.S. Mint will say it makes a profit" off penny production, said Neena Moorjani, Kolbe’s press secretary in Washington, D.C. "But when you figure in production costs, transportation costs and storage, it costs more than a penny to make a penny." The U.S. Treasury’s net cost of handling pennies in 1994: Somewhere between $8.5 million and $9.2 million.

Few American consumers carry and spend their pennies — the coins usually end up tossed in a jar or other container at the end of the day. Coinstar, the company that owns the changecounting machines found in supermarkets, estimated $7.7 billion in coins sits in people’s homes.

Which brings us to Lost Penny Day, observed each Feb. 12, which just happens to be the birthday of the president whose stern visage is on the face of the one-cent coin. The creators of Lost Penny Day suggest that Americans collect all the pennies stashed throughout the house and donate them to a shelter or agency that assists the homeless, or the local Humane Society.

Last year, Coinstar processed about $1.6 billion in change in its machines. Pennies constituted 67 percent of the coins.

TAXED TO SURVIVE

R.J. Hunderfund’s two cents’ worth: "If they stop manufacturing pennies, then they’ll really disappear." The Carefree coin collector believes that until Kolbe’s plan also does away with sales taxes — what can be responsible for one-cent coins more than a 7.78 percent multiplier? — the penny’s here to stay.

Hunderfund began collecting when he was 8. He’s now about eight times that, and recalls the days when coin-hoarding necessitated preventive measures by the government. To this day, he said, the Treasury mixes newly minted coins with already-circulated ones to prevent collectors from snapping up roll after roll of new coins. Limited-edition "proof" coins, with mirrored surfaces, are minted solely to satisfy numismatists.

Nowadays it’s only the rare cents that are worth anything. Coins struck twice in the minting process, for example, are called "doubledies," and such mint mistakes occurred most recently in 1972, 1983-84 and 1995.

"You have to know what you’re looking for," Hunderfund said as he examines a 1955 penny under a loupe to reveal faint double-die markings.

Or the old pennies — one from 1875 went for $210 or $220 about 10 years ago but is now up to $300, and there’s no reason to think the valuation rate will ever drop.

Hunderford, by the way, goes for the pennies on the ground. Beyond the 1-cent value, he said, there’s always the chance of a rare coin find.

"You never know what you’re going to see," he said.

IT’S A DIME A THOUGHT NOW

Are people like Hunderfund becoming increasingly rare? More than 40 percent of Americans, after all, have pitched a penny at some time — and that’s not meaning into picturesque fountains to make wishes.

A penny may buy your thoughts, but it can’t buy a gumball nowadays. The Ford Gum and Machine Co. in Akron, N.Y., manufacturer of the globe machines used by Kiwanis Clubs as fundraisers, now only makes penny-gumball machines as collector’s items. (A functional one still stands in the break room of Kiwanis’ world headquarters.)

"We have a few that sell like antiques on the Internet," said company president George Stegge. But more and more machines have been converted upward — to accept not nickels or dimes, but quarters. The old slidelevel machines, which cost more to upgrade, are now anomalies in a land of turndial knobs, according to Jim Henton, membership chairman of the National Bulk Vendors Association in Chicago.

And penny candy? A relic consigned to Nostalgialand, alongside memories of nickel movies and dime candy bars. Now pennies are squashed into Arizona Diamondbacks memorabilia in downtown Phoenix, miniature Lord’s Prayer medallions at Casa Bonita restaurant in Denver, or any design the press owner requests. A typical penny press machine costs about $4,500, including the cost of engraving the die used for stamping (but not including shipping).

A PENNY SHY

There are signs of a penny renaissance. The Coinstar National Currency Poll surveyed 1,000 Americans and released the results two weeks ago:

• 54 percent of Americans 18 to 34 say they value their change more today than they did a year ago — the highest of any age group surveyed.

• 71 percent of Americans said the United States should not discontinue the penny, up 6 percentage points from 2001.

• Two-thirds of people who said they use their cash more often, as opposed to a year ago, said they value loose change more today than a year ago.

Consider the success of 99 Cents Only, a company whose existence seems entirely predicated on the existence of the 1-cent coin. (Actually, store founder Dave Gold says there were no "dollar stores" when he started 99 Cents Only; the reason they picked the name — and the price — was because people were drawn more to two-digit prices than three-digit prices.)

And so, who’ll stoop to pick up a lowly penny? According to the Coinstar statistics, 80 percent of Americans will. And another 80 percent say it doesn’t matter if it’s heads-down or heads-up.

Gold says that the bestselling 99 Cents Only store — $9.9 million in sales last year! — is just outside Beverly Hills, Calif. The store in Scottsdale outperforms Phoenix locations.

"We do better in upscale areas than in medium neighborhoods," he said.

Rich, poor, it doesn’t matter: A penny saved is still a penny earned.

After all, who can resist the siren song? Find a penny, pick it up, all the day you’ll have good luck.

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