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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.

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393 Comments
thedanimal
February 16, 2012 at 9:15 pm

the problem is really as simple as inflation..
imagine getting a good meal at fine restaurant for a quarter!!!
feed a family of 4 with one of these dollar coins....
imagine a stable currency where the metal in the coin is worth
what is engraved on it!!!
imagine a government that refuses to print money everytime it needs a hidden tax.
pure and simple......INFLATION!!

Anthony
February 16, 2012 at 8:16 pm

If/when I fly, I take public transit to the airport - passenger train. A few years ago, I was going to Vegas, I bought my train ticket, received a bunch of these coins as change. Later that day when I arrived in Vegas and hit the NY NY Casino floor, I could not use these coins at the tables! One dealer went so far to think I was trying to pull a fast one and use fake money. No joke.

Allen
February 16, 2012 at 7:54 pm

It was a pretty dumb idea. Most change is less than a dollar, and if I get back change for anything more it would be a hand full of coins. If I wanted to buy something that cost let's say $8.50 cents I would need two hands to dig all the change out of my pocket.If likewise I was getting back $8.50 from a $10.00 bill I would have a pocket full of change. My pants might just fall to the floor! Just a dumb idea.

Gray
February 16, 2012 at 6:40 pm

Just talk the slot machine makers to make a slot which takes the new dollar coin.

CollinLeon
February 16, 2012 at 5:54 pm

Bring back the large dollar coins (Eisenhower or Morgan variants). They were large enough that you were not going to mistake them for quarters. Also bring back the half dollar coins (Franklin or JFK variants).

The problem that I have with coins though is that material that the clothing manufacturers use for pockets (even on jeans) is a fairly lightweight material and keys and such sometime poke holes in them and you lose you coins.

I don't see the dollar bills going away due to the fact that no stripper wants to have a bunch of coins stuffed in their G-string nor do the patrons want to start paying more by going to the next denomination of paper money.

Smitty
February 16, 2012 at 5:32 pm

Issue a $300 bill

T. Dirk
February 16, 2012 at 5:09 pm

Every time the U.S. Mint tries to introduce a $1 coin they make the same mistake, it looks and feels just like a quarter. I don't want to carry around two coins that are that similar. And apparently, no one else does either. Make a dollar the same as the old school silver dollars and then we'll talk about it.

Helen
February 16, 2012 at 3:44 pm

> and they're easier and cheaper to handle

Huh?

How is it somehow "easier" and "cheaper" to carry around pounds and pounds of heavy/bulky metal? Instead of a single $100 bill?

Ano Nyone
February 16, 2012 at 3:32 pm

I received $1 coins as change for a $5 bill, at a parking garage... the attendant had to comment, since the coins felt just like quarters. For acceptance, the $1 coins should have been 'marketed' (advertised, hyped, extolled)... they should have been produced as novelty coins initially, in small amounts... they should have been bigger than a quarter, in diameter or in thickness... and it probably would have helped to have a relevant quote or motto on the reverse from the person on the obverse, as a way of identifying with the coinage, sharing the sentiment of the quote/motto. And... all cash registers/coin machines should have a space allocated for 'miscellaneous' currency... some means for the handling of non-ubiquitous currency. Without these characteristics, new denominations of coinage just won't fly... unless you start making $1 coins with $1.50 worth of gold, etc.
In the end, it's just unnecessary... we have more than enough denominations of coins. New denominations of paper bills would be easier... I'd like to see $1,000 bills return. Just a fascination ;)

Ralph
February 16, 2012 at 3:29 pm

Easy solution: I'll take them. Send them all to me, and I will make sure they are spent well.