Friday, May 10, 2013

Issues with the Pro-Penny arguments - Part 2

Warning: most of my comments will have a touch of sarcasm this time.

I like the claim that "the consumer" would be negatively impacted if we rounded to the nearest nickel.  Their backup for this argument; that 66% of Americans "feel" this way. You're kidding, right? Why don't you ask them if they "feel" they're getting shafted with the current rounding system too?  What's that?  66% of people feel they are negatively impacted by the current rounding system, too! Amazing.  Let's switch to minting the half penny again! Or better yet; let's start minting a mil coin too, worth a tenth of a penny! That way I won't get screwed when they round my $8.72 purchase plus tax of 8.25% from $9.4394 to $9.44.  I'm tired of losing .06 cents every time!  I'm not sure about your state, but the great state of Texas gives businesses a half percent discount on their sales tax when they file and pay on time.  This way the business don't get "negatively impacted" by rounding transactions to the nearest penny.  That's why businesses don't even worry about rounding.  I imagine if they had to round cash transactions to the nearest nickel, most business would continue exactly how they are now, except without pennies in their registers.

And the argument that the circulation of the penny helps keep inflation down and benefits the consumer price index?  If this were true, then the half cent and mil coins would be even more beneficial to keeping inflation down.  In reality, how the CPI is calculated would not change (pricing is collected from the sellers, not the buyers), nor would the rounding be included in the CPI calculation.

I'm the accounting controller at regional business.  I looked at our cash sales for the last few months. If we rounded all of our cash transactions to the nearest nickel: For $37,000 cash sales in April we would have made an extra 11 cents, for $38,000 in March we would've lost 7 cents, for $32,000 in February we would've made an extra 8 cents, and for $31,000 in January an extra 2 cents for the company.  That's a positive 14 cents for the company, negative 14 cents for our consumers.

The penny lovers have 1 point that I like, but they can't and don't back it up with any evidence.  They just say that it is "absurd" to say that not having pennies at the register will save time and increase productivity.  But I'll discuss this later when I lay into the penny haters.

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