Cash's numbered daysBy http://profile.typepad.com/1237764140s22740 // February 2, 2013 in Attitude
I've always known the penny costs more to mint than $0.01. Now I hear it costs a dime to coin a nickel.
Coins recirculate and I'm sure an economist can put a value to how cash yet keeps money moving. In terms of economic benefit, it may make sense to stamp change and print bills even when the cost of doing so exceeds the face value of the objects produced, many times.
Until recently, one of my favorite coffee shops enforced a cash-only policy. Transactions were quick. Cotton, copper and nickle produce less friction than plastic.
But the shop gave up this policy of efficiency! And they aren't going back. Sales are up 20%. Turns out people using credit or debit cards spend more. Plus, people are indifferent to paying a surcharge by not using cash. (The retailer thus mitigates the extra expense it incurs by accepting cards.)
I anticipate similar inefficiencies as people start to use their phones to pay.
Appreciate those coins and notes while they last!