What will life be like without the ubiquitous penny? One thing that will change is American idioms.
"A penny saved is a penny earned," may be a little 19th-century, but the concept is sound. However, "A nickel saved is a nickel earned" doesn't have quite the panache.
"A penny for your thoughts" first appeared in English in the early 16th century. It's another way to say, “You’re being quiet. What’s on your mind?” One of the earliest examples comes from Sir Thomas More in 1522. He used the phrase as a friendly prod for someone to speak.
Before the dollar became king, the British pound was often used in American idioms. "Penny-wise and pound-foolish" referred to being thrifty or spending-conscious with small sums, but financially wasteful on a larger scale. "In for a penny, in for a pound," was one of Benjamin Franklin's favorites.
Last year, Donald Trump finally had to put an end to the penny's reign as champion of American idioms. It costs the U.S. Treasury 3.7 cents to mint a penny, and with 114 billion pennies already in circulation, minting more didn't make any sense. It's more efficient to phase out the penny and make the necessary price adjustments.
Those price adjustments are about to become a major issue as states grapple with "symmetrical rounding."
"If the final price, after taxes, ends in one, two, six, or seven cents, payment in cash rounds down," says PBS, describing the practice. "For example, $1.91 or $1.92 becomes $1.90. If the price ends in three, four, eight or nine, cash payment rounds up. For $1.98 or $1.99, the consumer pays $2.
States have already started to wrestle with the problem.
In the meantime, bills to deal with penniless cash transactions have passed both chambers and await the governor's signature in Arizona, Florida, Oregon, Tennessee, Virginia and Washington. Some states are proposing to allow businesses to round cash purchases, while others consider requiring it.
In Indiana, a bill signed into law this month by Republican Gov. Mike Braun tells businesses they must round cash purchases for all transactions that do not end in a zero or five. Lawmakers revised that provision in a second bill that makes rounding optional, which would take effect Sunday if Braun signs it into law.
In both bills, Indiana businesses can choose to always round cash purchases up to the nearest nickel, always round down or round up or down depending on the amount.
In Republican-led Tennessee, legislation makes symmetrical rounding exempt from legal claims under a state consumer protection law but does not require rounding.
Cash is no longer king in the United States. Old people and the poor are the only groups that consistently use cash for purchases. However, some analysts see an advantage for businesses and a disadvantage for consumers.
But researchers at the Federal Reserve Bank of Richmond used a 2023 survey to show prices that didn't end in zero or five were especially likely to end in eight or nine. Payment amounts could be different when multiple items are purchased or depending on the tax rate, but overall, prices more often being rounded up would lead to millions of dollars gained by businesses and lost by consumers collectively, amounting to a few pennies lost per person.
The rounding rules would not apply to online transactions or transactions only involving a debit or credit card. But retail outlets are complaining that rounding down will cost them in the long run.
Retail stores have historically had narrow profit margins, where the difference between profit and loss can be fractions of a penny on the right items.
Businesses have also expressed concerns that, without legislation, if they choose to round prices up, they could be accused of cheating customers and possibly face legal action.
There are also concerns that if retailers decide to round up, they could face legal troubles from states that require businesses to accept cash transactions. Many jurisdictions that have such laws prevent businesses from charging consumers more if they pay with cash.
In a statement, the Retail Industry Leaders Association said that “retailers are prepared to adopt rounding practices similar to those used in other countries that have eliminated one-cent coins.”
“However, this approach requires consistent national guidance to ensure uniformity and compliance,” the group said. “It is also critical to implement a national preemption standard to avoid a patchwork of local and state laws that will confuse consumers and impact business operations.”
Congress has not been idle in dealing with this issue. It would seem, in this case, that a national standard would be helpful. The Financial Services Committee voted out a bill that would apply symmetrical rounding across the country. U.S. Rep. Lisa McClain (R-Mich.) said in an email that the federal law is important to prevent a "confusing patchwork of state policies."
The bill, or a similar one, will no doubt become law before too long. And it won't be more than one or two generations before someone remarking to a young person, "A penny for your thoughts," will be greeted with a blank stare.
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