Rounding Rules

Did you know that there are rounding rules in place now for all transactions in the US?  In fact, I'm sure every country has its rounding rules, but I'm not going to check them all.  The rounding rules are governed by the state in which you live, because there is no federal sales tax, only state and local sales tax. The basic rule is that for all taxable sales, multiply the total sales amount (rounded to the nearest cent) by the sales tax rate and carry it out to 3 decimal places.  If the digit in the thousandths place is 5 or higher, round up to the nearest cent. If it is 4 or lower, round down to the nearest cent.
In fact, your listed prices don't even have to be in whole cents. You could sell items for $3.46309 if you wanted.  But then you must subtotal the entire bill, rounding to whole cents and apply your sales tax to that amount and then round the grand total to the nearest cent.  The final price always has to be in whole cents, because that is the lowest denomination with which someone can pay.  Go look at your local gas station and see the price per gallon at $3.699 or some other amount with 9/10th of a penny on the end.  Or check your natural gas or electric bill.  Your price for natural gas most likely includes some fractions of a cent per CCF (100 cubic feet), and your electric bill includes fractions of cents per kWh (kilowatt hour).  But of course, your bill is always rounded off to the nearest cent.
Since we are rounding already, why not round to a denomination that is more convenient for consumers and retailers?  Like the nearest 5 cent increment, or even better the nearest 25 cent increment. We need to lay the penny to rest, and relegate it to a nice bit of nostalgia.

Do you pick up pennies off the ground?

So, we've all heard the phrase about having good luck when we pick up a penny off the ground. The phrase has been around almost as long as the penny has.  Of course as the purchasing power of the penny declined, additional superstitions were added, such as only "heads up" pennies were lucky, and the "tails up" pennies should either be turned over to "heads up" so the next person to come by could receive the luck, or given immediately to someone else so that they could receive the luck, or other variations.  Now you'd have to find a $5 or $10 bill to get the same purchasing power as the penny of the 1800's.  No doubt you'd feel lucky if you found that much money on the ground.  Way back then, it was almost unheard of to find money on the ground, so it was indeed lucky.  Now you can find pennies every day just by walking down the street.  So, do you receive the same amount of luck and gratification today, as the people back in the 1800's had when they were fortunate enough to find a penny and pick it up?  Do you even bother stooping down to pick up those pennies?  If I'm not in a hurry, I'll usually pick up those pennies.  Not because I think they are worth so much, but because each penny I return to circulation, is 2 cents I save the government (and myself) paying to replace it. So does anyone else pick up pennies out there and why?

So does anything cost a penny anymore?

I can't find anything that costs a penny.  Amazon has a few things, like cheap earrings and necklaces or stuff no body in their right mind would ever purchase, but the shipping is usually $5 or more, and all of them are from the Amazon marketplace (sold on amazon.com by other vendors).  There is nothing directly from Amazon that costs a penny that I could see.   Wal-Mart and other online retailers don't have anything for a penny that I could find.  But seriously, if anything is listed at a price point of $0.01 then it's probably grossly overpriced. We round now. Why don't we round a little more and get rid of those pennies?

Redenomination

An alternative to removing the smallest denomination of a currency is a process called redenomination. Redenomination is not the same as revaluation. Though the terms are similar and both deal with money, revaluation deals with exchange rates and pegging a currency to another.  We are talking about redenomination which is changing the currency itself into a new currency.  Redenomination typically happens when inflation or hyper-inflation has eroded the value of a currency so much, that everyday transactions are expressed in thousands, millions, billions, or even trillions of units of a currency.  Eventually, like they did in Zimbabwe, nations will drop a bunch of zeros off the end so that a unit of the "new" currency, for example, will be worth 1,000 or 1,000,000 units of the "old" currency.  In relatively stable economies, usually this causes only a temporary decrease in stability, after which things go back to normal.  But, in highly volatile economies, this is usually the beginning of the end.   Most recently, most of Europe has gone through a redenomination, converting to the Euro.  Of course the main problem with redenomination is that you have to print currency in the new denomination, mint coins in the new denomination, and have a transition period where people can trade in their old currency and coins for the new, and where everyone can spend either the new or the old or both.
Would this be a good idea for the US? Probably not yet. Maybe when the dollar is about as valuable as the penny is today. Sort of like the Japanese Yen. It's worth about one cent. I think Japan needs to start thinking about redenominating their currency.  Maybe they already are.
The problem with redenomination is that there is usually a brief spike of inflation after the transition period, especially if the new denomination has the same name.  Let's drop only one 0 from the current prices.  Your old salary of OldUS$30,000 per year is now NewUS$3,000.  If you make OUS$100,000 now you make NUS$10,000.  But now gas instead of being OUS$4.00 a gallon, is now NUS$0.40.  OUS$60.00 video games, now only cost NUS$6.00.  Initially we are in the same position as before, only things are valued a little differently.  Now after the transition period ends, throw in a quick spike of inflation where everything costs 10 to 20% more than before within a couple years, but your income only goes up by 5%.  Hello recession! This is usually why redenomination is not a good idea.  Especially to drop only 1 or 2 zeros. I think we have quite a long time before we need to think about redenomination.  Eventually we can get rid of cents and fractions of a dollar.  Then when a dollar becomes a lot less valuable than the penny is today, we can think about redenomination.  Retiring coins like the penny has virtually no economic impact.  Redenomination goes for the economic jugular.  It's only for when the currency can no longer handle the current economy.
So let's just drop the penny and move on.  The economy is not going to deflate anytime soon, so we've got nothing to lose, we'll only be saving billions of dollars.

How Heavily Loaded are Your Pockets?

Well, one penny weighs 2.5 grams, so $1 worth of pennies weighs 250 grams or just over 1/2 a pound.  $20 in pennies weighs 5,000 grams or about 11 lbs, and $100 in pennies will weigh about 55 lbs. But to be more accurate, the pennies before 1982 weighed 3.11 grams, so if you have $100 worth of those pennies, then your looking at about 68.5 lbs.  Compare this to $100 in nickels which weighs 22 lbs, $100 in dimes, quarters, or half-dollars which each weigh 5 lbs (hey, I think they planned it that way!), or $100 in dollar-coins which comes in at a trim 810 grams or 1.8 lbs.  Of course, each bill made by the US government only weighs about 1 gram, so you wouldn't even notice if you had a $100 bill in your pocket or not.  Since you won't notice that $100 bill in your pocket, you may as well just give it to me.  😉

Weird Penny Ideas

Wow there are some pretty crazy and artistic uses for the billions of pennies out there.  Pinterest is sporting a few pages (here and here) for the different ways to use these useless copper disks. My favorite is probably the shower tiles.  Either that or the donkey head!

Penny Battery

So you probably already knew that you could make a battery out of pennies.  You'll need a bunch of zinc pennies with the zinc exposed on one side (file or sand the copper coating off on one side).  Cut some cardboard or paper towels or other absorbent material into penny sized pieces and then soak them in an acidic solution like vinegar or lemon juice. Once the pieces are saturated, stack the pennies (all zinc side down) with a piece of the saturated material in between each one.  Then touch the wires from an led light to each end, or attach each end to a small calculator or watch.  As long as the cardboard stays wet, the penny battery will work.  Once the pieces dry out, you'll have to saturate them again. You probably couldn't power your cell phone or DS with it unless you had a big old stack of pennies, but it's still a cool little experiment.  Here is a youtube video that explains the process very well.