LUBBOCK, Texas (KCBD) – The United States Treasury has decided making cents no longer makes sense, minting the last penny a few weeks ago, after 232 years of production.
The cost of producing the penny has increased from 1.42 cents to 3.69 cents per coin over the last decade, according to the United States Mint. Cutting the coin, it expects to save approximately $56 million per year.
James Arnold, market president at UMB Bank West Texas says the decision reflects current payment trends.
“If you look at a chart or a graph of kind of cash versus credit and debit card, it’s an overwhelming majority, almost 70% are using some form of electronic payment, whether it’s credit or debit card, Venmo, Cash App and those kind of things. And only 14% actually use cash,” Arnold said.
With fewer pennies in circulation, Arnold hopes penny pinchers will bust their coins out from the jar or bag sitting at home.
“Banks will be encouraging some of their consumers and businesses to bring those pennies back into circulation because there’s going to be, over time, they will dwindle and be fewer and fewer out there,” Arnold said.
Faissal Zeitouni, owner of Worldwide Rare Coins, said pennies tell stories of American history.
“This is how they started, with the big size penny, large pennies,” Zeitouni said. “In 1943, during the war, they needed the copper. So, they started minting them in steel,” Zeitouni said.
While some rare pennies can be worth thousands, Zeitouni said most pennies retain only face value. He says in the numismatic business, the internet is a dangerous place to get information.
“Unless it’s one of the few pennies that are worth more, a penny is going to still be worth a penny. It’s a better idea to sell these pennies, exchange them for silver or gold or something that would have a force against inflation…a hedge against inflation, if you will,” Zeitouni said.
Some businesses are feeling the shortage and have decided to round up or down for customers who pay cash.
“People like the penny, they’re used to the penny, but you can always round up and down, and there’s really no need for it,” Zeitouni said.
Arnold noted the Federal Reserve expects rounding up to cost America’s cash-paying consumers $6 million a year, though.
“People will vote with their pocketbook and they’ll probably transition a little quicker to transactions using a debit card or a credit card because it’s going to cost them more money,” Arnold said.
The Treasury estimates about 300 billion pennies are still in circulation and remain legal tender.
While the penny’s legacy may live on, even through popular phrases if not through the coin itself, it’s many years of production are over.
“It’s an end of an era, but everything comes to an end,” Zeitouni said.
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