You’re digging through your couch cushions or staring at the little plastic tray by a gas station register, and it hits you. When was the last time you actually used a penny? More importantly, did they get rid of the penny while we weren't looking?
It's a fair question. Honestly, the penny feels like a ghost. It's there, but it's not really doing anything. You can't buy a piece of gum with it anymore. You can't even use it in most vending machines or laundromats.
The short answer is no. The U.S. Mint is still cranking them out by the billions. But that doesn't mean the "Lincoln cent" isn't on life support. There is a massive, decades-long brawl happening behind the scenes in Washington involving lobbyists, zinc miners, and economists who think the coin is a literal waste of time.
Why You Think the Penny Is Gone
The confusion usually stems from the fact that our neighbors to the north actually did it. In 2013, Canada officially pulled the plug. They stopped distributing the penny because it cost more to make than it was worth. If you go to a Tim Hortons in Toronto today and your total is $1.02, you pay a dollar. If it’s $1.03, you pay $1.05. It’s called rounding, and the world didn't end.
In the United States, we’re stuck in a weird limbo. We still have the coin, but many businesses have effectively "soft-retired" it. Have you noticed some local coffee shops just rounding your bill to the nearest nickel to avoid the hassle of counting out copper? That’s not technically "official," but it’s happening everywhere.
The Math That Makes No Sense
Here is the kicker: it costs the U.S. Mint about three cents to make a single penny.
Think about that for a second.
Every time a new penny rolls off the press in Philadelphia or Denver, the taxpayer loses two cents. According to the 2023 Annual Report from the U.S. Mint, the unit cost for the penny was 3.07 cents. When you multiply that by the roughly 10 billion pennies produced in some years, you’re looking at an annual loss of nearly $100 million.
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Most people find this insane. If any business operated like that, they’d be bankrupt in a week. But the government isn't a business, and the penny has some very powerful friends.
The Zinc Lobby vs. Common Sense
Why haven't we followed Canada's lead? It isn't just nostalgia for Abraham Lincoln.
Enter the Americans for Common Cents. It sounds like a grassroots group of coin collectors, right? Not exactly. It’s a lobbying group largely funded by Jarden Zinc Products, the company that sells the zinc blanks (called planchets) to the Mint. Since 1982, pennies have been 97.5% zinc with a thin copper coating. If the penny dies, Jarden loses a massive government contract.
They argue that getting rid of the penny would lead to a "rounding tax." The theory is that if prices are rounded to the nearest five cents, greedy corporations will always round up, hurting the poor.
Does Rounding Actually Hurt Consumers?
Robert Whaples, an economics professor at Wake Forest University, has actually studied this. He analyzed thousands of transactions and found that rounding is basically a wash. Sometimes you lose two cents, sometimes you gain two cents. Over time, it balances out to zero.
But facts often lose to optics. No politician wants to be the one who "raised prices" for the working class, even if it’s by a fraction of a cent.
The "Time is Money" Argument
There is a hidden cost to the penny that we rarely talk about: the "opportunity cost" of our time.
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Jeff Gore, an MIT physicist, once calculated that the average person spends several seconds per transaction fumbling for pennies. When you aggregate that across the entire U.S. population, we are collectively wasting millions of hours every year.
- Waiting for the person in front of you to find four cents.
- The cashier counting down the drawer at midnight.
- The armored trucks burning diesel to transport heavy bags of worthless metal.
It's a massive drag on the economy that doesn't show up on a receipt.
The Penny's Role in Modern Inflation
Inflation has basically turned the penny into a rounding error. In the 1950s, a penny actually had purchasing power. You could buy a stamp for three cents. Today, the penny has lost about 95% of its value since it was first introduced in its current form.
Some economists argue that we should go even further and kill the nickel too. The nickel also costs more than five cents to produce—around 11 cents, actually. If we moved to a decimal system based on dimes, the economy would likely be much more efficient. But Americans are notoriously resistant to changing their currency. Just look at the disaster that was the Susan B. Anthony or the Sacagawea dollar coins. We love our paper singles and our copper-plated zinc.
What Happens if They Actually Do It?
If the U.S. finally decides to get rid of the penny, here is what the transition would look like:
- Cash Only: This would only affect cash transactions. Credit card, debit, and Apple Pay totals would remain exactly the same down to the cent.
- The 1/2 Rounding Rule: Totals ending in .01, .02, .06, and .07 would round down. Totals ending in .03, .04, .08, and .09 would round up.
- Charity Impact: Groups like the Salvation Army or "Pennies for Patients" would need a new strategy. Pennies make up a huge chunk of "spare change" donations.
- No More "Keep the Change": Those little jars at the deli would vanish.
We’ve done this before, by the way. In 1857, the U.S. stopped making the Half-Cent. At the time, the half-cent had more purchasing power than a modern-day dime. People complained, but then they moved on. Life stayed the same.
The Environmental Toll
There is an environmental cost to keeping the penny alive that often gets ignored. Mining zinc and copper is a carbon-intensive process. We are literally digging holes in the ground, shipping ore across the country, stamping it into shapes, and then trucking those shapes to banks—only for most of them to end up in a jar on your dresser and never be spent again.
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It’s an incredibly inefficient cycle. Roughly half of the pennies minted drop out of circulation almost immediately. They aren't being "used"; they are being "stored" in jars, cushions, and trash cans.
How to Handle Your Pennies Right Now
Since the government isn't moving fast, you've got to deal with the clutter yourself.
Don't just throw them away—that's literally throwing away money, even if it’s just a little bit.
Coinstar vs. The Bank
Most people head to a Coinstar machine. It’s convenient, but they usually take a cut of around 11-12%. That’s a huge "tax" on your change. If you want the full value, look for the "e-Gift Card" option on the machine. Usually, if you take your payout as an Amazon or Starbucks gift card, they waive the fee.
Alternatively, some credit unions and smaller banks still have coin-counting machines for members that are free to use. It’s worth a phone call to check.
The Self-Checkout Hack
The easiest way to get rid of pennies without feeling like a jerk is the self-checkout lane at the grocery store. Most of those machines have a coin slot. You can just dump a handful of pennies in first, let the machine count them, and then pay the remaining balance with your card. It’s a great way to "clean" your wallet without holding up a human cashier.
Actionable Steps for the "Penny-Less" Future
Whether the government acts or not, you can effectively "get rid of the penny" in your own life to save time and reduce clutter.
- Go Digital: Using a tap-to-pay method or a credit card eliminates the penny problem entirely. You pay the exact price, no rounding required.
- The "Round Up" Apps: Use apps like Acorns or your bank’s built-in "round-up" feature. This takes the virtual pennies from your transactions and puts them into a savings or investment account. It’s the modern version of a piggy bank, but it actually earns interest.
- Donate the Jar: If you have a massive jar of pennies, don't wait for a "pennies for the landfill" day. Take it to a bank, get the cash, and donate that to a local food shelf. They can turn $10 worth of pennies into dozens of meals thanks to their wholesale buying power.
- Check for Rarities: Before you dump them, look for pennies dated before 1982. Those are 95% copper and are technically worth about 2.5 cents in raw metal (though it is currently illegal to melt them down for profit). If you find a 1943 steel penny or anything with a "S" mint mark, it might be worth a lot more to a collector.
The penny isn't officially dead yet, but it's definitely a relic. We are holding onto it out of habit and political fear, not economic necessity. Until the laws change, your best bet is to stop letting them weigh down your pockets and start moving them back into the economy where they can—at the very least—be someone else's problem.