Today while I was splitting wood, I was thinking about if we, the consumers, lose money, since Canada stopped producing the penny. I can't imagine the government doing anything for our highest and best good. So today on my break, I did some research...some "fun facts".
First penny was made in 1858. It was called the "two cent coin".
In 1858 it could buy you a pound of cornmeal or half a pound of flour. Butter was 21 cents a pound!
Pennies were only made with substantial copper:
1982–1996 2.5 g 98% copper, 1.75% tin, 0.25% zinc
1980–1981 2.8 g 98% copper, 1.75% tin, 0.25% zinc
Last penny produced in May 2012.
At the time of the announcement, they made 800 million pennies a year, and the estimated cost was 1.6 cent to make. Estimating an 11 million dollar savings by stopping production.
It was also said that the penny is also a waste of time and money, because a penny can not buy anything today.
"The real reason to eliminate pennies is that their feeble purchasing power means dealing with the coins, and making change to the nearest cent, is a uneconomic waste of time for consumers, retailers and small businesses. People instinctively recognise this, which is why pennies pile up in drawers, in jars and on bedside tables. The mint then has to issue more of them. “Pennies take up too much space on our dressers at home,”" said Mr Flaherty, finance minister March 2012
"As the Royal Canadian Mint officially stops distributing the penny today, and merchants wade into the unexplored frontier of rounding transactions to the nearest nickel, is there a way to profit from the change?
Theoretically, yes.
Under the new system, cash transactions will now round up or down to the nearest nickel once taxes are added in. That means, potentially, there's profit to be made if you shop carefully enough. If the majority of your purchase prices end in .01 or .02, or .06 or .07, they will typically be rounded down to the nearest .00 or .05. If your purchases tend to end in .03 or .04, or .08 or .09, however, store owners will typically round up." --CTV Feb 2014
Interesting that Walmart always has "ROLLBACKS"?
This was the second article that I can across from the Globe and Mail.
"Canadian grocery stores make $3.27-million per year from penny-rounding: UBC study
Third-year economics and mathematics student Christina Cheung has written a paper that says Canadian grocers are making $3.27-million per year from penny-rounding.
In the end, Canadian consumers don't end up paying much extra, but the rounding on cash transactions can mean big money for grocery retailers across the country, with each store standing to collect $157 per year, Cheung said."
-- Globe and Mail
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The whole idea that it would be 50/50 for the rounding up and down is not the case.
I am so grateful for bartering and steem. It will be a great day when there will be no need for Fiat currency.
The things that I think about while chopping wood :) Maybe I need to get out more! Lol