Friday, April 11, 2008

A Penny for your thoughts........

While I'm here in Kansas my wallet is filled with $1 bills. Canadians gave up 1$ and 2$ bills a number of years ago - instead we have a $1 coin (the loonie) and the $2 coin (the "toonie"). Now a Canadian bill (no, not a dollar bill) has been introduced in Parliament to abolish the humble penny.

This article examines the numerous efficiency costs of handling pennies. It costs the Canadian Mint four cents to produce each 800 million pennies per year. Canada isn't alone in discussing the merits of the penny. Barack Obama, the article states, has declared he would "seriously consider eliminating the penny" provided he could find another way to honour his hero Abraham Lincoln, whose profile graces the American penny. This appears to set him against the active pro-penny lobby group funded by the zinc industry (the main ingredient in pennies) and coin distributors.

The main concern of consumers in Canada set out in the article is that abolishing the penny will become an excuse for stores to raise prices. However, in Australia, where one- and two-cent coins were abandoned in 1992, stores there round up or down for cash purchases based on an easy formula. If the final price ends in 1 or 2, round down; 3, 4, 6 and 7, round off to 5; 8 and 9 round up.

Sounds like common cents to me........

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