Rustle or Jingle »
It costs 4.2 cents to produce a dollar bill. That dollar bill lasts for 18 to 22 months. Meanwhile, it costs 12 cents to produce a Sacagawea Dollar - but the coins last for thirty years. The cost of keeping a dollar bill around for thirty years is somewhere between 69 and 84 cents. That may not seem like much difference, but when you're talking about billions of dollars in circulation, it can add up quickly.
According to the American Public Transportation Association, the cost of processing one thousand dollars in one dollar bills is approximately $10.11. To process the same amount of money in dollar coins would cost just $1.22. Why so much difference? Bills jam more easily than coins. How many times have you tried to feed a bill into a vending machine, only to have it spit back out at you? Now think about how much trouble you've had with coins. I'm guessing it's a lot less (it is for me).
Lines would move faster. You need a coin, you reach in a pocket or a purse of some sort, grab your change, get what you need. Meanwhile, if you need a bill, you either pull a crumpled wad out of your pocket and spend fifteen seconds straightening out each bill or you have to find your wallet, open it, leaf through and pull out the right denomination. Which will be faster?
The long term cost is lower, the hassle factor is lower, the speed is faster. Yet dollar bills are still far more prevalent in the US than dollar coins. Why is that, exactly?
Comments (12)
They're a lot lighter?
Posted by Ev. on July 1, 2004 6:48 PM
Unless I'm wearing jeans, coins always fall out of my pockets when I sit down and are noisy when I walk. While I haven't tried one, I'm fairly certain I wouldn't use a pocket change purse/holder.
Plus, my wallet is always in the same pocket, oriented the same way in the pocket, and the bills are usually in order of denomination. So, it's a low hassle factor for me.
Posted by Jason on July 1, 2004 7:12 PM
Maybe I just don't carry much cash. Instead of saving my coins in some container or other, I actually use the change I have in my pocket (if I even have any). There is rarely enough to be noisy enough to bother me. Of course, I also get strange looks from cashiers when I give them $5.05 and the bill was $4.80. Maybe that's the reason.
It would be easy enough to effect the change, so I don't understand why people are puzzled - just stop producing the dollar bill. The problem thus far is that people have still had the option to use the paper. If they didn't, the coin would surely pick up steam...
Posted by Chad Everett on July 1, 2004 8:25 PM
How about making currency completely digital. Instead of spending money on producing the specie, you can spend it on security.
Posted by Dan on July 1, 2004 8:48 PM
Apparently they're working on the all digital money thing with RFID tags. I'm kinda skeptical, but hell, I spose it would be cool to be able to just wave your watch at the cashier and be on your way.
Posted by Jeff Clark on July 1, 2004 11:10 PM
I don't like the jingle of coins. They're also heavier than paper money. If coins started making a comeback, we'd go back to the days of people carrying around Ye Olde Coine Purses. Which might be cool in its own, special, piratey sort of way. Arrrr.
Posted by Peter on July 1, 2004 11:12 PM
Anyone know the relative bacterial retention rates of paper money vs metal...?
Posted by John Dowdell on July 2, 2004 1:27 AM
Though I don't have one, I have to admit that the Speedpass is a pretty cool RFID implementation. As long as everyone doesn't create their own, like with loyalty programs. Maybe PayPal will create something.
As to the relative bacterial retention rate? I'd have to imagine that the bill would retain more bacteria than the coin - it seems much more likely for fabric to absorb something than metal. But I am not a molecular engineer.
Posted by Chad Everett on July 2, 2004 6:07 AM
I think there are two reason why the coins fail.
1) They give people a choice. Do away with the dollar bill and everyone will have to accept it. I haven't had a business offer me a coin in years.
2) Replacing George Washington with Sacagawea is way too trendy. Replacing Washington on the bill with Washington on the coin would definitely increase acceptance.
The Sacagawea, like the Susan B Anthony, has never seemed like a serious attempt at actually doing what they say they want to do.
Posted by Michael on July 2, 2004 1:00 PM
Not sure how the Brits prefer it, but when I was in London this Spring I was surprised to see that all pound notes are actually pound coins. The lowest bill is a 5 quid note.
After getting used to the different coin sizes (one day) I really appreciated how well they worked for all the vending machines and machine services (tube, train tickets, etc.).
Posted by Paul on July 2, 2004 3:41 PM
Me personally? I can't stand coins except for the 1 and 2 euro which, while coins, are valuable coins. If I've got a pocket full of 1 and 2 euro coins, I can probably get into a movie just on change. That's a nice feeling.
In my opinion, the U.S. should get rid of the dollar bill (gasp! -- I know that it will never ever happen) and go the Euro route (1 and 2 dollar coins) and do away with the penny completely (nickel, I've got my eye on you...). There is nothing realistically that you can buy with a penny and they are a nuisance -- one which incidentally mostly ends up in people's change drawers at home causing the government to remint them in larger numbers, in turn causing a drain on the economy in both reminting costs and also too much money on the open market.
Of course, they can't do away with the penny very easily. The reason? Inflation. If a government were to say "next year, you must either raise or lower all of your prices to be divisible by a nickel", you can easily guess which way everyone would go. If that were the case, you would have little effect on a micro scale but on a macro scale the results would be disasterous hyperinflation -- all because of a little copper coin.
In any case, paper money doesn't HAVE to be short-lasting. There are many countries which are now adopting a new form of paper currency which isn't paper at all, but instead this weird type of polymer. It feels a bit like paper only waxy. It is nearly impossible to tear (I've tried) and lasts through washing better that your clothes does.
The money that I have is Romanian. It's way cool. Extremely colorful, full of holgraphic and anti-counterfeit features and even a transparent window so you can see right through it. It is made by an English company, who is starting to make real inroads in the outsourcing of currency printing.
Anyhow, paper money doesn't HAVE to be flimsy, fragile, boring, black and green. That's just the way the U.S. government makes it...
Posted by Jay Allen on July 3, 2004 10:16 AM
Otay! You can have your money in plastic roumanian or in flimsy, fragile, boring, black and green US dollars. Which would you prefer?
No, check that.
Instead, conduct a survey among say 100 Roumanians above the age of 30. You'd be surprised how many still have little stashes of old C notes still hidden away.
Money is not about being "cool" but about being trustworthy. Money and currency is about belief.
Posted by Gerard Van der Leun on July 8, 2004 8:58 AM