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?