Check your pockets. Or that dusty ceramic jar on the dresser. You probably have a handful of small, copper-colored discs that you literally cannot use to buy anything. You can't put them in a vending machine. You can't use them at a toll booth. If you try to pay for a $4.00 latte with 400 of them, the barista might actually jump over the counter. It costs the United States Mint about three cents to make a single cent. Think about that for a second. We are spending double the face value of a coin just to keep it in circulation, only for most of them to end up stuck in couch cushions or thrown into "take a penny, leave a penny" trays. The end of the us penny isn't just a fringe economic theory anymore; it’s a mathematical necessity that the U.S. government is weirdly terrified to pull the trigger on.
The Brutal Math of a One-Cent Coin
Money is supposed to be a tool. But the penny has become a burden. According to the 2023 Annual Report from the U.S. Mint, it cost exactly 3.07 cents to produce, ship, and distribute one penny. That is a massive loss. In 2023 alone, the Mint lost over $90 million just making pennies. We’re basically burning tax dollars to create a physical object that most people treat as litter.
It wasn't always this way. Back in the day, pennies actually had purchasing power. You could buy candy. You could buy a newspaper. Now? You need 100 of them just to get a dollar, which itself doesn't buy much. Economists like Robert Whaples from Wake Forest University have been shouting into the void for years about how much time we waste fumbling with these things. If the average transaction takes an extra two seconds because of pennies, and you multiply that by billions of transactions, you’re looking at hundreds of millions of dollars in lost productivity every year. It’s a "time tax" we all pay without realizing it.
Why Does It Still Exist? (Hint: It's Not Just Nostalgia)
You might think we keep it because Americans love Abraham Lincoln. Honest Abe is great, sure, but he’s also on the $5 bill, and nobody is trying to get rid of that. The real reason for the delay in the end of the us penny is much more corporate.
Zinc.
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Modern pennies aren't copper. They are 97.5% zinc with a thin copper plating. Companies like Jarden Zinc Products (now part of the Greer Group), based in Greeneville, Tennessee, have a massive stake in this. They sell the zinc "blanks" to the Mint. They spend a lot of money lobbying Congress to make sure the penny stays alive. It’s a classic Washington story: a small, concentrated interest group fights harder to keep a subsidy than the general public fights to get rid of a minor annoyance.
Then there’s the "rounding" fear. People worry that if we kill the penny, businesses will round every price up to the nearest nickel. This is called the "Rounding Tax." But here’s the thing: we have real-world data on this. Canada got rid of their penny in 2013. Australia did it in 1992. New Zealand did it too. In every single case, the rounding was neutral. Sometimes it goes up, sometimes it goes down. If your total is $10.02, it goes down to $10.00. If it’s $10.03, it goes up to $10.05. It washes out. Plus, this only applies to cash. If you use a credit card or Apple Pay, you still pay the exact cent. Since we’re moving toward a cashless society anyway, the "rounding tax" argument is basically a ghost story used to keep a zombie coin walking the streets.
Lessons From Our Neighbors to the North
When Canada decided to kill their penny, the world didn't end. They stopped distributing them in February 2013. The Royal Canadian Mint actually saved about $11 million CAD per year by doing so. What happened to the coins? They were collected and melted down. The metal was recycled.
The transition was remarkably boring. That’s the best-case scenario for any major economic shift. Canadians just started rounding their cash transactions. Charity jars that used to collect pennies started seeing nickels and dimes instead. In fact, charities often find that when you remove the lowest denomination, people don't stop giving; they just give the next highest coin. The end of the us penny would likely result in a "nickel surge" for non-profits.
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The Metal Value Trap
There’s also the legal weirdness. It is technically illegal to melt down U.S. pennies or nickels for their metal content. The government knows that if people could legally melt them, they would. A penny contains about 0.03 cents worth of metal if it’s an older copper one (pre-1982), and even the newer zinc ones are starting to approach a "melt value" that exceeds their face value when commodity prices spike. We are essentially forcing people to hold onto "money" that is worth more as a raw industrial material than as currency.
Is the Nickel Next on the Chopping Block?
Honestly, the nickel is in even worse shape. While the penny costs 3 cents, the nickel costs about 11.5 cents to make. We’re losing even more money on each nickel we mint. If we move toward the end of the us penny, the nickel becomes the new "bottom" of the system. But it won't be long before we have the same conversation about the five-cent piece.
Inflation is the silent killer of coins. A penny in 1950 had the same buying power as about 13 cents today. We already got rid of the half-penny in 1857 because it was "worthless," but at the time it was retired, it had more purchasing power than a modern dime does now. We are logically inconsistent. We cling to the penny out of a weird mix of habit and corporate lobbying, even though our ancestors were much more ruthless about cutting ties with useless currency.
Moving Toward a Penny-Free Future
If you want to see what a penny-free America looks like, go to a U.S. military base overseas. They haven't used pennies in AAFES (Army & Air Force Exchange Service) for years. They round to the nearest five cents for cash transactions because shipping heavy boxes of pennies across the ocean is a logistical nightmare. It works perfectly. The soldiers don't complain. The accounting is fine.
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The end of the us penny is inevitable; it's just a matter of when Congress decides that losing $90 million a year is too embarrassing to continue. Until then, we keep the zinc mines in business and keep our jars full of metal that nobody wants.
Practical Steps for Your "Worthless" Stash
Since the penny isn't officially dead yet, you still have to deal with them. Don't just let them sit there.
- Coinstar is a Rip-off (Usually): Most kiosks take a 11-12% cut. That’s a huge "lazy tax." However, many of them waive the fee if you take the balance in a gift card (like Amazon or Starbucks). Do that instead.
- Bank Straps: Go to your bank and ask for paper rolls. It’s tedious, but most banks will only take large amounts of pennies if they are rolled. It’s the only way to get 100% of your money back.
- The "Vending Machine" Trick: Some newer self-checkout machines at grocery stores have high-speed coin feeders. You can literally dump a jar in there to pay for your groceries. It’s much faster than rolling them by hand.
- Charity Totals: If you’re a business owner, consider rounding your prices to the nearest .05 or .10. It simplifies your bookkeeping and speeds up your lines.
- Check for "Wheats": Before you dump them, look for pennies from 1958 or earlier (the "Wheat Penny" design). Most are only worth a few cents, but certain key dates or mint errors can be worth hundreds. It's the only way a penny will ever actually make you money.
The reality is that we are carrying around 19th-century technology in a 21st-century world. The penny is a fossil. It’s time to let it go. Stop saving them in hopes they'll become rare collectibles; there are billions of them. Use them, exchange them, or donate them now before they become even more of a hassle to get rid of.