Banking Blog

Finance Blogs » Banking » US stops minting unloved $1 coins

US stops minting unloved $1 coins

By Claes Bell, CFA · Bankrate.com
Monday, December 19, 2011
Posted: 12 pm ET

There's a lot to like about $1 coins. They are more durable than paper money, and they're easier and cheaper to handle. The only problem is, Americans hate using them.

Because of that, the Federal Reserve has literally entire warehouses full of unused $1 coins returned to them by banks because people don't want them. From Robert Benincasa and David Kestenbaum at NPR's Planet Money:

The federal government will stop minting unwanted $1 coins, the White House said Tuesday. The move will save an estimated $50 million a year.

Earlier this year, we reported on the mountain of $1 coins sitting unused in government vaults. The pile-up -- an estimated 1.4 billion coins -- was caused by a 2005 law that ordered the minting of coins honoring each U.S. president.

We calculated that the unwanted coins had cost taxpayers some $300 million dollars to make. There were so many coins piling up that the Federal Reserve was redesigning a vault in Texas to help hold them all.

We got to see a vault in Baltimore. It was the size of a soccer field, filled with bags of dollar coins.

On the merits, dollar coins are all-around better than dollar bills, but as long as you make them optional, rather than taking $1 bills out of circulation to force the change, Americans will kick them to the curb.
That's true for a couple of reasons. First off, I think people in the U.S. have kind of stopped thinking of coins as real money. Most people seem to look at coins as "loose change" and "pocket change," not holders of real value.

The other reason is that American men generally don't carry an item that's pretty much ubiquitous in places with valuable coins: a coin purse or wallet capable of securing coins. Whenever I'm in Europe visiting the Swedish branch of my family, I'm always struck by how pretty much every dude walking around over there has a coin holder, which is a real rarity in this country and in approximately the same class of coolness as, say, a calculator watch or Velcro shoes.

Of course, that problem would immediately be solved as soon as $1 bills were eliminated. While it might take a while for men to abandon their classy money clips, there are a few things people hate more than losing money. It would only take a few bucks rolling out of their pockets to make men reconsider the style characteristics of coin-carrying wallets.

But people like paper money, and they hate $1 coins, and Congress is having difficulty even mustering up the political will to keep the lights on at this point, so I don't see it happening anytime soon. As a result, it's probably smarter for the government to keep the $50 million.

What do you think? Do you like $1 coins?

Follow me on Twitter: @ClaesBell.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
393 Comments
David Slowinski
February 16, 2012 at 3:27 pm

This is just another case of our government wasting over $300 million on something that taxpayers didn't ask for and don't want. The Susan B Anthony dollar coin was a similar dud thirty years ago.

jack fox
February 16, 2012 at 3:06 pm

I go to England and find that the use of the metal pound coins
are no problem. The English used paper pounds before changing to pound coins and save a lot of money in doing so. The pound coin in use is distinctive from the other coins (they are thicker). I like the paper dollar but I would have no objection to using dollar coins (expecially if they were the size of English pound coins...

Chuck
February 16, 2012 at 2:34 pm

I dislike all coins and wish they were all taken out of circulation. As a man, carrying coins of any quantity or denomination in my pocket is noisy and frankly useless. How many coins do you have to carry to purchase just about anything? The truth is that I feel the same way about paper money as well, just not as strongly as paper comes in larger denominations. The vast majority of my transactions are electronic, via credit or debit card. It is so much easier to carry one or two cards that countless bills and coins.

Ed
February 16, 2012 at 2:25 pm

Simple solution: Stop printing one dollar bills, and ramp up production of two dollar bills. Result: one dollar coins and two dollar bills in circulation.

Gene Handy
February 16, 2012 at 2:17 pm

Make them a different size than a Quarter. We hate spending one dollar for 25 cents. You need to be able to feel the value of the coin.

kcom
February 16, 2012 at 2:14 pm

"we would instantly see a reduction in government spending"

And instantly one more reduction in freedom. The government is our servant, not our master. If we want dollar bills, which is our choice as citizens, then that's the policy our government should follow. They shouldn't be forcing us to do anything. They work for us.

As Scott says, coins are a pain. They're heavy and unwieldy (bulky), unlike bills. And the claim that "they're easier and cheaper to handle" is belied by the article itself, with the need for a special carrying container to add to what we are already carrying highlighted. It seems the "easier" is focused on the producers and not the users.

And the amount of money saved is miniscule in relation to any significant meaning of the words "reduction in government spending".

Jay
February 16, 2012 at 1:52 pm

The problem has to do with replacing every cash register in the country. It's like adding sporks to your silverware tray--there is no slot. Better to look at eliminating pennies.

Bob
February 16, 2012 at 12:40 pm

I don't understand the reason they are warehoused. Every time I've asked for dollar coins at the bank, the response has been: "sorry we don't have any on hand." Well get some!!! I use them and they are much longer lasting than dollars. If people would use them, we would all save money in the long run by printing less dollar bills.

scott
February 16, 2012 at 12:19 pm

You missed the obvious. Who wants to have a bunch of heavy coins in their pockets except maybe a 6 yr old on the way to the store to buy a coke? coins are a pain.

And what man wants to carry a purse around?

Will
February 16, 2012 at 11:23 am

When will Congress stop dancing around the issue that it costs the American public a lot of money printing those $1 bills? If they stopped printing $1 bills and switched to coins, we would instantly see a reduction in government spending