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The Demise Of The Penny: A Catalyst For Change?

February 4, 2013 was a day that changed the lives of Canadians forever. No, Tim Horton’s didn’t stop serving coffee (thank God). We didn’t change our national sport to curling. Ryan Gosling didn’t (officially) become President Of The Universe.

No. It was much more drastic than that. On February 4, 2013, the Royal Canadian Mint stopped producing pennies.

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Yes, like old age security, military spending and that CBC show Little Mosque on the Prairie, the penny became yet another piece of collateral damage in Canada’s tightening fiscal policy.
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Although I knew this day was coming (the announcement that the penny would be phased out came in mid- 2012), I couldn’t help but feel a bit sentimental. It seemed like the end of an era. Pennies had been a fixture in my life since childhood: I dove for them in swimming pools, landed them on the ledge of the PEI ferry, rolled them in 50’s to buy the latest toys.

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What was going to happen now? Would a new denomination be arbitrarily deemed “lucky”? Or would luck just be much harder to come by? And what about thoughts? Would they be incrementally more expensive?

I should have been more prepared for this, given that it was not, as it happened, my first rodeo. Back in 1996, the Canadian Government pulled another fast one on me by replacing my beloved, rose-coloured $2 bills with a two-toned, Polar bear embossed coin embarrassingly dubbed the “toonie”
penny5As a semi-OCD 9-year-old, this change made me uneasy. I refused to accept this new imitation currency; and instead chose to hoard $2 bills in my piggy bank like some sort of depression-era housewife.

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This obsession continued for about 2 years, until one day in grade 5, I caved and spent my last bill on a bottle of a questionable-looking carbonated beverage called Orbitz:

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I still ask myself whether it was worth it.

Anyway, this whole penny situation reeked of Tooniegate 2.0. Plus there were all these extra complicating factors. Like what would happen if things didn’t add up to 5 or 10? Would the cash register just explode?

The Royal Canadian Mint released this helpful diagram to clarify:

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but whenever I looked at it, I still felt as though I were being cheated.

It’s been about 6 weeks since the penny disappeared, and shockingly, not much has changed.

I expected my life to be significantly different: to be perpetually in a state of pricing vexation; or to feel the absence of copper in my hand like some sort of phantom limb. But to be honest with you, I kind of… well… forgot about it.

I think part of this is because I rarely pay for anything in cash. (Yes, I’m that annoying girl who whips out her debit card to pay for a $2 coffee.)

Luckily for me, my chronic inability to visit an ATM doesn’t impact my life all that much given that the world is becoming increasingly electronic.

This was reaffirmed for me by this week’s episode of 60 Minutes, which featured an interview with twitter founder Jack Dorsey. (I know. Reading books and watching 60 minutes. Who is this kid??) Dorsey recently developed a new product called Square, which is a small device that attaches to smart phones and allows vendors to accept debit and credit card payments.

square

Dorsey claims his product is the way of the future because people don’t really like handling money: there’s an inherent guilt and dirtiness about it, and it’s nice when it just disappears. It makes you feel like you’re being taken care of.

I get what he’s saying- I feel this way about buying books on Amazon. The website has all of my personal and credit card information saved; so all I have to do is click “order”. It eliminates (most of) the guilt associated with online shopping and makes for a much more pleasurable experience.

At the same time, I think removing all physical indicators of spending can also be dangerous. Not having that mental reminder can make keeping track of your spending much more difficult, and there are definited security concerns involved. Plus, just to say it: maybe we don’t really need more “guilt free” methods of spending given that consumer debt levels are at an all-time high.

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I also don’t know if I totally agree that people don’t like holding money…or at least that’s the impression I get from music videos.

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Maybe it’s the smell. Maybe it makes us feel more secure. Maybe it’s just the inherent Scrooge McDuck in all of us.

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I really can’t say. Just like I can’t say what will happen to the fate of cash-money. It’s federal budget day here in Canada, and for all we know, the nickel could be next on Jim Flaherty’s chopping block. Maybe the penny will become a catalyst for change- or maybe it will just be some other weird Canadian convention, like the CFL, or half hour timezones. In any event, I don’t plan on hoarding my bills just yet.

Question of the Day: Do you always carry cash?

…. or are you chronically cashless like me?

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34 thoughts on “The Demise Of The Penny: A Catalyst For Change?

  1. Chronically cashless, like you. I would love to move to e-money. Although cold hard cash has a sort of primal appeal– we sold our car for $5,000 cash and decided to ‘make it rain’ when we got back to our apartment. It was kinda fun, but not as glamorous as rap videos would suggest ;-).

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  2. I rarely carry cash. It’s much easier and more convenient to just whip out the plastic and swipe. I can track my spending online. I think the US should do the same thing considering it costs 3 cents to produce a coin that’s only worth 1 cent. Kinda dumb to keep making them once you look at it that way.

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    • You’re totally right- it makes complete fiscal sense not to have a penny. I just am a sap and get all weird and reflective when things change.
      I should really take a more Darwinian approach towards currency.

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  3. It took me a second to get the joke in your title, but then the penny dropped.
    I know we’re supposed to ultimately come out even in the rounding up/down business, but I’m pretty sure I am on the 10 cent side of losing at this point.

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  4. Awesome post,,,,i’m still wondering about this rounding up and down thing.
    I do wonder tho,,,with all the rounding up and down,,does it make it so that a cashier’s till never balances?
    And, I did giggle thinking of how it’s going to really screw with the American Tourist’s heads this summer when things are rounded up and down when they pay cash, but when they pay by debit,,,you actually pay the unrounded price.
    Soooo,,,technically using your debit card may actually SAVE you money because if you use it, instead of cash when ur rounding up,,ur not charged the extra few pennies.
    That’s just my 2cents,,,(hahaha get it,,,I kill myself)!!

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  5. I feel this is opening the door for some sort of penny rounding scheme like in Superman III and Office Space.

    Then again, those are both solid movies, so that’s probably a good thing.

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  6. I don’t typically carry cash because I find I spend it more freely… There’s something about using my debit card that keeps me under control. I can’t believe you guys are penniless (literally) though! Rounding?! Insanity!

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  7. I am kind of amazed that they would get rid of just one coin (the penny) because rounding up and down makes me instinctually think they’re shorting me. Like no need for math, eh? :(

    I don’t carry cash most of the time. Every once in awhile I need to go get some because there’s one or two places in my town that don’t take cards (I know right?!) and so I need cash to go there. one is a delicious sandwich place and the other is an ice cream shop. Gotta have cash sometimes I suppose.

    But mostly, I debit card swipe away. I do like being able to do a lot of things online, but for me, I’m a bit of a cheapskate and maybe not seeing the money is a good thing for me.

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    • Exaaaactly that’s how I felt! Like somehow this rounding thing is not working out in my favour.
      Up until about a year ago, Tim Horton’s in Canada didn’t take debit. This was a MAJOR problem for me.
      They’ve sorted it out now though ;)

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  8. I pay for everything with a debit card. I get cash once a month. My barber is old school, cash only. :-) He doesn’t even have a smart phone so there would be no place for him to put this new credit gadget. I spend more when I have cash. Hoard those pennies now, you can save up for something better than Orbitz, (whatever that was or is) :-) Thanks for the entertainment!

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  9. I also don’t know if I totally agree that people don’t like holding money…or at least that’s the impression I get from music videos…. Hundred Dollar Bill y’all.
    In Mexico I can only use cash. If you dare use your card anywhere you have a 98 percent chance of having it cloned. I get charged a lot to take money out of the ATM too. Once a week I take money out of the ATM and I have to budget for the week. No coffee on my card and I can’t buy things online. I am saving a fortune. I am counting my pennies like my country man Scrooge McDuck

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    • Really? That’s crazy!! I can see that only holding money would be good for budgeting- that’s what they always do on those debt shows, put the person on a “cash diet”. Perhaps I should try it ?

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  10. I carry a bit of cash, just in case my debit card doesn’t work…or I need to go to Tim’s. My Tim’s card is chronically short of funds. I have a penny collection and need a 2005 to complete it from 1960 onward…and do you think I can find one? Please feel free to discuss the new $20s too – what’s with the static cling? How many extra bills are going to end up in vendor’s hands because our plastic money sticks together. I may have to grow a garden and darn socks just to save a buck..sorry, a loonie!

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    • I want you to know that when I read your comment I searched my wallet for a 2005 penny but to no avail :( Sorry dude! I have one from 1979 tho so let me know if that’s useful
      And the new bills are WHACK. I accidentally paid an extra $20 for something a few weeks ago and I still haven’t let it go

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  11. I was super excited to learn of the penny-no-more plan. I HATE pennies. I hate coins, really, but pennies especially. Good riddance! I just hope the rest of the world follows suit.
    I try to spend only cash. And I always cheque my account before making c/c purchases. I don’t want to be in the dark about my own finances. I would love to be able to use debit, but the morons here have JUST caught on to those babies. They only work like prepaid credit cards though, so no swiping for ice cream for us.
    See why I need to return to Canada?

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