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Comment by cbhl | Hacker News Reader

Worth noting this piece was written in 2002. Ten years later in 2012, Canada finally took the penny ($0.01 coin) out of circulation.

Cash transactions were to be rounded to the nearest nickel, whereas cashless transactions were still computed in pennies.

(As far as I can tell, the main reason the US hasn't done the same is due to the prevalance of souvenir penny press machines.)

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I suspect it's because nobody wants to admit that a penny has become worthless, and probably a nickel too. Also, there may be people who are worried that they will start getting ripped off by the rounding process.

I read a book about units of measure, and there was often strong local resistance to adopting regional or national standards because folks thought it would be a chance for merchants to surreptitiously raise prices. They were probably right.

In Argentina we unofficially deprecate the coin/bill when they are worth approximately US$0.03 (don't ask how I made statistics).

Now all prices are rounded to AR$10. The AR$20 and AR$50 bills are fine, but the AR$10 bills are very old and almost destroyed. The AR$10 are still used because otherwise it's difficult to pay some values. (I've not seen a AR$5 bill in the wild since January or February.)

Soon we will round all prices to AR$50 and unofficially deprecate the AR$20 bills.

> Now all prices are rounded to AR$10 ... Soon we will round all prices to AR$50

A 5x change in what constitutes a negligible amount of money on a human-noticeable timeframe seems like a shocking rate of inflation. For reference, $3 here in the United States has about the same buying power that $1 did in 1982, 40 years ago. So the price of common consumer goods has only risen 3x in a time frame that represents more than half the average human lifespan in this country.

Source: https://fred.stlouisfed.org/graph/?g=BJl0

That's the reality of Argentina though:

"Argentina's inflation rate will end the year at 210% and remain high in 2024, investment bank J.P. Morgan said in a note after the new government of libertarian President Javier Milei sharply devalued the peso currency in a bid to tackle a major economic crisis.

The South American country's new government is battling to bring down the highest inflation rate since 1991, warning of possible hyperinflation without tough austerity measures.

The government unveiled a package of "shock" economic measures earlier this week to overturn a deep fiscal deficit, and devalued the peso currency by over 50%, which it admits will in the short term fan inflation further.

J.P. Morgan expects monthly inflation in December to be 25%, which would take the annual rate to around 210%. Prices rose 12.8% in November before the recent devaluation.

The bank added that planned subsidy cuts and increases in taxes would accelerate prices in the first half of 2024."

https://finance.yahoo.com/news/argentina-inflation-end-210-s...

If you get rid of the penny and the nickel, then you may have trouble making change with just 10 and 25 cent pieces.

I'd almost say if you were going to go down to 2 coins it might actually make more sense to have and $0.10 and $0.50 pieces. I.e. force all prices to a multiple of 0.1 instead of 0.01 but leave a larger coin to make larger totals or scrounging up more than a dollar when you don't have a bill go quicker.

Or even just go straight to quarters being the only change at all. A penny CPI adjusted from when they got rid of the half penny in the US (1857) is already worth $0.35 today.

> leave a larger coin to [...] go quicker

It'll go quicker, but it won't save space! Unless we make smaller half dollars, just as the gold colored dollar coins took over after the large dollar coins we had previously. Perhaps something with a diameter similar to a nickel but a thickness similar to a penny or quarter.

This is a good idea. Rebasing on 10¢. I proposed dropping to a 25¢ smallest-coin standard elsewhere in the thread, but dropping the quarter and going 10¢/50¢/$1 is also a good plan.

Pennies and nickels definitely should go. They’re not even worth picking up off the ground.

In Sweden, ~10 cents (1 Swedish crown) is now the smallest coin.

Swedish coin, year taken out of circulation:

  0.1 cents, 1972 
  0.2 cents, 1972 
  0.5 cents, 1985 
  1 cent (penny), 1992
  2.5 cents, 1985 
  5 cents (nickel), 2010

Is it possible to have a bank account or electric bill for a fraction of a crown?

In the distant past when I still named computers, I'd always make sure to have a zloty and a kopek somewhere in the zoo; typically they'd be NIS servers or recursive DNS servers or other similarly important task trivially serviced by an antiquated server I had fondness for and wanted an excuse to not retire. "You can't turn off those SLCs; they're the NIS servers for the statistics department..."

Yes, 0.01 crowns are still used for bills in Sweden.

The sender can elect to round them to the nearest crown, but that is optional.

The joke about two coins adding up to fifty-five cents and one of them not being a nickel will go the way of the dodo.

The dime has got to go

Nah, it's the only one that makes sense.

Cash based commerce should just be rounded to the 1/10th dollar not the 1/100th dollar; there's just no need for such precision.

I'd just announce that while still legal tender, the penny, nickle, and quarter won't be minted any longer except in low volumes for collectors, and that cash transactions may be rounded down to the nearest 10th dollar if proper change is not available.

IE a cup of coffee costing $4.17 would cost $4.10 if paying cash. I suspect vendors would just update the cost of everything to land on the 1/10th increment.

I guess you may need to worry about people playing arbitrage games with metered things like gasoline, but even there it's probably just a marginal problem.

Dime is a weird word; it doesn't convey that it's a tenth of a dollar, does it?

[edited to add examples and digression on gasoline]

re: arbitrage games with metered things like gasoline, we got rid of pennies in Canada a decade ago so I can tell you how it affected getting gas. Initially, some people switched games from the classic "try to get a whole number of dollars exactly" to "try to get two cents above a whole number of dollars", as that gets rounded down when you pay cash. However, that was also around the time that paying with cards for everything became the norm, so it stopped mattering because credit/debit card transactions don't get rounded. Worth noting, in response to the sibling comment, that if you buy $20.02 of gas for $20, you get a 0.1% discount, which I doubt throws off the owners' books. This would be 0.2% max if the nickel was also eliminated.

There were also jokes about buying one grape at a time so the whole bag got rounded to 0, but I worked at a grocery store for two years and never saw anyone try to exploit the rounding, even to a lesser extent :)

Gasoline isn’t a digression, it’s a great example of why removing precision from prices is a bad idea.

Imagine you own a gas station. Your actual cost to fill your tanks is some multiple of the price you can charge per gallon. Requiring 10 cent-rounded prices kneecaps your ability to efficiently price your product.

Flipping it around, if you think $1/10 increments are good enough for a gas station owner, why aren’t they good enough for Microsoft when its shares are traded? Decimalization in equity markets has been widely seen as a success because more precise prices communicate information about the relative interests of buyers and sellers more accurately.

Given the predominance of digital transactions, it’s hard to argue that the transactional efficiency gains of less precise prices are worth the downsides.

> Imagine you own a gas station. Your actual cost to fill your tanks is some multiple of the price you can charge per gallon. Requiring 10 cent-rounded prices kneecaps your ability to efficiently price your product.

This is… already the situation?

Most gas stations where I am are pricing their product in thousands of a cent and rounding the total off to the nearest cent when it’s time to pay.

We got rid of the penny a decade ago in Canada. It just means that for cash transactions the gas station rounds off to the nearest five cents instead. The most they can “lose” is two cents _on the total transaction_. Hardly seems different than losing several tenths of a cent on some transactions (as they already were) in aggregate.

also strangely missing from this discussion about the supposed outrages of pricing when you round, and losing 0.1 or 0.2% in cash payments, is that credit card companies will charge that gas station is a bit over 2%. So no matter what coin you abolish, the gas station comes out on top on the cash payment, even if it's the quarter. It'd still come out on top if it was the dollar bill/coin for bills under $200, so, pretty much always.

It's more "already handled" than missing. Gas stations already often advertise a cash price and paying by credit gives you a higher price which includes the markup. It's perhaps the most commonly used type of business that bothers to do this because the margins are so thin.

Gas stations denominate in thousandths of a dollar, for which there is no coinage.

Well, my statement was for _cash_ transactions, and why I mentioned arbitrage.

We could as easily add a 1/1000th unit to the dollar, and mandate that for cash transactions round to the 1/10th but for credit and other electronic transactions they'd be to the "iota" or some other charming term for the millidollar. I'm pretty sure that aeons ago there were half pennies, so it isn't completely absurd.

Also, I'm pretty sure that in the not so distant past stocks used some weird fraction of dollars not decimals[1].

[1] https://www.investopedia.com/ask/answers/why-nyse-switch-fra...

[edited to add example of fractionally denominated stock prices]

[edit2: ah, sorry you mentioned the fractional stock issue with the observation "precise values are good" which they are. I still retain my position that, for retail cash based commerce, precise values are less valuable than the time invested in the transaction. ]

It's because there's one company that produces the weird bronze-plated-zinc blanks used for cents, and it resides in a politically powerful legislator's district.

Since it also features Lincoln, the Illinois contingent will also cling to it for dear life.

great! we haven't had a dollar coin released in a while, let's deprecate the penny and put Lincoln on a dollar coin! he can be featured as part of a rotation of existing dollar coins over the next several years as we get them back into circulation.

They already put him on a $1 coin in 2010. They went through every president starting in the mid-2000s, but by the time they had gotten to him, we had plenty of $1 coins in the vaults, so the mintage was small and not-for-circulation-- about 97 million coins total. (By comparison, the 2000 Sacajawea type was over 1.2 billion)

Solving problems for whiners doesn't get them to stop whining.

US should drop nickel and dime, go to 25¢, 50¢, and $1 coins.

Nothing smaller than a quarter’s really worth screwing with, when dealing with physical currency. We’ve gone so long without dropping the penny that the dime’s nearly worthless, too.

One problem is sales tax. With a percentage calculation after a sale, uneven totals are the rule. It would be better if retail prices all included tax, rounded already.

Then do what every other county on the planet does, include sales tax in advertised prices

Not even true next door in Canada. Don't know why so many are in love with the phrase "every other country" to attack the US when it only serves to destroy their credibility.

In many eurozone countries totals are rounded to the nearest 5 cents at the register if you pay cash. If you pay electronically then the exact amount is debited.

There are some weirdos who decide how to pay based on whether or not the rounding is in their favor (e.g if the total ends in a 2 they'll pay cash but if it ends in a 3 they'll pay with card). But I don't think these amounts are enough for stores to care, especially considering how much they save by not having to deal with 1¢ and 2¢ coins.

A guy in Canada tried this when they got rid of the penny. After a bunch of careful scheming, he ended up…$0.89 (or something like that—-it was certainly under a buck).

That is true even with pennies. 5% of $4.99 is 24.95¢.

An rounding error is inevitable, but the question is: Should this potential error be multiplied by a factor of about 5, 10, or 25?

prices should include all taxes and fees

> prices should include all taxes and fees

Ever tried Airbnb?

It makes the even the most relaxed human start to twitch.

I'm not opposed to that, but the problem is then the $.25 coins will be worthless due to inflation, and then the $.50, and so on. We would just be kicking the can down the road, unless we can stop the government from continuing to debase the currency.

In Russia the smallest coins are practically out of circulation, the price tags are still in x.99 but rounded at checkout.

in most of the US, rounding at the checkout is against regulations as it throws off sales tax computations, even though it's only by a small amount.

Couldn’t they round, then calculate tax?

I found US sales tax baffling - I live somewhere that requires the display price to be the out-of-pocket amount.

The problem in the US is that the local sales tax is the sum of sales taxes created by several independent authorities. These authorities have varying geographic and subject matter scope, and can modify their sales tax on their own schedule. There are effectively thousands of independent sales tax jurisdictions in the US and the details of the computation in those jurisdictions churn regularly. By “late binding” the sales tax, they avoid having to churn the printed/published prices.

I think there is also a policy view that taxes should not be hidden, that there is a public interest in making the public aware of precisely how much they are paying in taxes. Taxes that are baked into the price tend to be forgotten about by the public.

> By “late binding” the sales tax, they avoid having to churn the printed/published prices.

Strictly speaking, you don't have to change the total price if the tax rate changes, you can change the base price so that the total comes out the same. This is how prices are typically set in Europe, though vendors can of course change prices in response to tax rate changes, but it doesn't normally happen automatically.

Now, you might argue this hides the tax even more, if the customer doesn't even notice a price change when the rate changes, but one could also argue the latter is a good thing for the customer (if the business decides to eat the cost, at least for a while).

> I think there is also a policy view that taxes should not be hidden

I have never seen anywhere that advertised the tax rates at a store when I've visited the US.

Taxes being different, not baked in, and not advertised just makes the whole system appear random.

You can round down but that would hurt the retailer profits so it would be never be implemented.

$9.99 items may go down to $9.95.

So what, WalMart would go bankrupt?

It's a solved thing, for the cash round down, for the credit/plastic/online pay as is.

If you remove $0.01 then round down to the nearest .05, if you remove $0.10 then round down to nearest 0.10; so both $9.99 and $9.95 would be $9.90. Simple.

a regulation requiring all pricing be post-tax would fix this pretty easily

I think Spain and other countries had this kind of inflation when moving to the Euro.

Exactly opposite. Accessing Euro-zone in 1999 has stabilised Spain's inflation at around 2-4%, before getting into Euro it was wild.

https://tradingeconomics.com/spain/inflation-cpi

From 1997 until 2021 it was at a stable 2-4%. 1985-1995 it was 5%-10%, and 1965-1985 it was 10-20%.

Also, if you compare inflation of say Czech Republic, Slovakia, Poland, Estonia and Estonia (or any other comparable countries), you will have a difficult time spotting which ones of them have Euro and when it was adopted.

It didn’t necessarily have much to do with the Euro. Inflation was high everywhere back in the 80s

Yes, in Germany Euro was dubbed Teuer-o ("teuer" meaning expensive). Basically, most prices were converted 1:1 from Deutsch Mark to Euro.

Worse than worthless--it requires underpaid arithmeticians!

What’s the book? Sounds interesting

The removal of the penny was done in Canada at a time when the government needed a distraction from a scandal. It worked fabulously, and was way more popular than people expected due to the pro-penny faction being way louder than the silent majority who were glad to be rid of the things.

From Wikipedia:

"In 2011 the Royal Canadian Mint had minted 1.1 billion pennies, more than doubling the 2010 production number of 486.2 million pennies.

...

The budget announcement eliminating the penny cited the cost of producing it at 1.6 cents."

The announcement of the penny's removal may have been timed, but its removal was sensible, long coming, discussed for more than a decade, and needed.

Minting a billion pennies a year, many of them lost, or hoarded, was senseless.

So now we're centless.

It devastated the wishing fountain industry though, it still hasn’t recovered. Neither has Canadian wish delivery. There’s only so much the Make a Wish Foundation can compensate.

Gross Domestic Wish Production down 42% from their 2011 peak. Many sectors that were ancillary to the wish industry (Make A Wish foundation included) had to move onto manufacturing Hopes, Dreams, and Aspirations, which sadly even as a combined accounting group still don't generate the sort of revenue we saw with the WishEx market during the predepennification era. I think about my grandfather, who worked in wishmithing before it was even regulated, selling scrap copper to throw into ponds to the local community. Maybe we need to return to that, locally sourced wishes would be a smaller industry, but it would open up new opportunities for the next generation to get into the craft.

I feel like this is a joke but genuinely can’t tell for sure

Was during the Harper government era, like another commenter said, there was basically constant on-going scandals at the time. Big populist decisions like breaking up Make A Wish Canada Ltd (or at least putting some pressure on them) was a distraction from a lot of shady government dealings happening at the time. I think most people assumed we'd see a more bespoke wish market arise, but sadly the downgrading of MAW Canada, then it's eventual restructuring lead to a buy out by Rogers Communications Ltd, who very quickly laid off the Joy and Magic department. They're pretty much just a holding company for the IP now. Things just aren't like they used to be here.

All they needed to do was rebrand them from “Wishing Fountains” to “5 Wishing Fountains”. Problem solved.

Canada still has plenty of those machines, they just have copper or brass blanks in them.

Incidentally, pressing those pennies effectively removes them from circulation.

which is a useful thing to do after abolishing the penny. not so much while they're still making more pennies.

I suspect it’s even dumber than that and no one wants to remove a coin from circulation with Lincoln on it.

It's actually less dumb but more corrupt: it's the lobbying funded by the company that sells zinc coin blanks to the US Treasury:

https://en.wikipedia.org/wiki/Americans_for_Common_Cents

He's on the $5 bill.

In the US, there are other weird complications if prices were rounded to the nearest nickel. One that is not mentioned much is that some large businesses have used the last digit of the price to encode metadata for decades. It is the equivalent of a tagged pointer in software, except the extra bits are buried in the least significant digit of the price, precisely because changing the value by a couple cents was below the pricing noise floor. I have to imagine quantizing prices to the nearest nickel would create Y2K-like software problems for some companies which makes them an interested party in maintaining the status quo.

You don't have to quantize the unit price to the smallest coin, only the total final purchase amount. Gasoline is typically priced at $x.xx9/gallon, with the "unit" ending in 9/10th's of one penny, and this doesn't break anything, they just use bankers rounding before calculating the final payment amount.

Similarly, sales taxes often result in a fractional penny as well, which again gets floor() or bankers_rounding().

If the US rounds everything to nickels, then the current system of 1-5-10-25-100, which needs an 18-cent piece, becomes (after division by 5) a new system of 1-2-5-20, which needs... what new denomination ? Maybe none ?

A $2.50 coin would fill the gap well.

We could just bump everything to 3,7,11 and ... 29 maybe? And keep 100 cents to the dollar.

Actually, if I had to guess about the US situation, I'd tend to blame the zinc lobby. US 1 cent coins are mostly made of zinc now, and only plated with copper.

The same reason we haven't gone to the metric system: we hate change.

(except for pennies though. I guess that is one kind of change we love...)

in Europe, many penny machines now simply aak for a euro or 1.5 euro, and press a copper blank from an internal cassette.

Do you remember when someone decided the Starbucks holiday cups weren't Christmas-y enough, and part of a war on Christmas? Major news stations covered the issue. Politicians gave comment (Trump also chimed in).

They don't want to get rid of the penny because they know someone will try to pull a similar stunt. At this point it's a proven strategy to get free press and social media attention.

Maybe, maybe not. A lot of reactionaries are into coins, specifically hoarding pennies to melt for scrap when they cease to be legal tender.

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