Counting the cost

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MARY REICHARD, HOST: Today is Tuesday, December 2nd. Thank you for turning to WORLD Radio to help start your day.

Good morning. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher.

Coming next on The World and Everything in It: the U.S. Mint in Philadelphia pressed the very last penny after a 232 year run.

REUTERS BRANDON BEACH: Three, two, one … done! [Applause]

U.S. Treasurer Brandon Beach gave his two cents’ worth at that November 12th ceremony.

BEACH: The last time we discontinued a coin was the half cent, and that was in 1857, 168 years ago. So, everyone sitting in this room, we are experiencing history today.

REICHARD: The move comes after an announcement this spring from the Treasury saying pennies cost more to make than they’re worth. WORLD’s Emma Eicher went to the Philadelphia Mint, and has the story.

U.S. MINT ANNOUNCER: This is the coin production area of the U.S. Mint …

EMMA EICHER: Tourists stroll around a viewing area above the warehouse floor of the Mint, peering down through glass at the rows of blue machines and conveyor belts. An overhead announcer delivers information about typical operations.

ANNOUNCER: At regular intervals, inspectors carefully examine the finished coins.

The machines press up to one million coins in just a half hour. Shiny new quarters are piled on the floor, leftover from a day’s work.

ANNOUNCER: The new coins are then stored in huge concrete and steel vaults. Later, the coins are shipped to Federal Reserve Banks.

A penny saved is a penny earned … and the U.S. Treasury is taking that idiom seriously. A single penny only has the buying power of one cent, but costs almost 4 cents to make. Turns out, its days have been numbered for a long time.

STEVEN ROACH: This isn't something new, even I believe as early as the 70s, the Mint was looking to suspend the denomination.

Steven Roach is a collector and currency expert with the American Numismatic Association.

ROACH: The Mint is a profitable organization. I would say it’s self sufficient. I believe they'll be saving about 50 million annually.

While the penny has been discontinued, there are still roughly 250 billion of them in circulation, so they aren’t likely to disappear anytime soon.

But without new coins, retailers face a shortage. And consumers may have to adapt to a penniless exchange with cashiers.

Last month in Cranberry Township, Pennsylvania, a GetGo gas station stuck a poster to the door urging customers to pay with a card. It also warned that cashiers might be unable to give exact change.

These adjustments are becoming common.

JORDAN: I just went to lunch at Burger King and they have like an actual thing on their window talking about the penny shortage, so …

Jordan is a Walgreens cashier down the road from the GetGo. One day, a new button on the register appeared, allowing her to automatically round an item price up or down to the nearest nickel.

JORDAN: So then we discussed it with our managers, and they were like, Yeah, this is what's happening, it's for the penny shortage.

She swiped a Snickers bar to demonstrate.

SOUND: [Snickers bar purchase]

JORDAN: On our payment screen, it allows us the ability to, like, adjust for a penny shortage.

It’s a temporary fix to the problem. There’s also an issue of legality, as at least 10 states prohibit rounding any business transaction to the nearest five cents.

It’s up to policymakers and individual retailers to sort out the way forward as American sticker prices change. But Roach anticipates there won’t be much difficulty because there isn’t a real need for the penny anymore. In fact, other countries have set the trend the U.S. is following.

ROACH: So Australia, they discontinued their penny. Our northern neighbors, the Canadians, back in 2012 they discontinued their cent as well.

New Zealand removed their one- and two-cent coins in the ‘90s and got rid of their five-cent coin almost 20 years ago.

In the U.S., it currently costs a whopping 13.78 cents to make a nickel. The Mint is looking at alternative metals to reduce the cost.

But in the future, the nickel might receive the same fate as the penny, joining a long line of discontinued coins.

ROACH: The smallest denomination struck for circulation was the half cent. Ultimately they discontinued that in 1857. We’ve also had a two cent piece that was first struck during the Civil War in 1864, then discontinued in 1872 for circulation.

There have been 15 discontinued denominations since the first coin was minted in 1792. Most of the time, rising production costs trigger the death knell. In the case of the penny, the cost coupled with inflation makes it nearly obsolete.

ROACH: Back when the penny was first struck for circulation, long ago in 1793, it was worth something. It was a significant amount of money. Now you know, there really isn't a necessity for it.

Even though the move makes practical sense, some still mourn the loss. The coin remains relevant in American terminology … like when something costs “a pretty penny.” Or perhaps you’d like “a penny for your thoughts.”

MICHELLE LEILANI: Like, if there's a penny on the ground, but it's, you know, tails, you don't pick it up, because it's bad luck …

Michelle Leilani brought her daughter to the Philadelphia Mint to catch a glimpse of the coins and learn about their history.

SOUND: [Penny cranking machine]

Together they cranked the penny press machine in the gift shop to make an engraved souvenir out of the trip.

LEILANI: I think that most people, if they look back and their own interactions with coins, they would see that you really, you use the penny more than you think.

But for the Treasury, stopping the coin’s circulation is more about the math than the memories. And that will be worth every penny.

Reporting for WORLD, I’m Emma Eicher in Philadelphia.

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