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?
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12 responses to “Rustle or Jingle”
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.
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…