Pennies in the United States now cost at least two cents each to make, according to the US Mint. Pennies also are made predominantly of zinc — 97.5 percent — the mining of which is damaging to the environment. Pennies also waste time: According to a study undertaken by the National Association of Convenience Stores and Walgreens, handling pennies adds 2 to 2.5 seconds to each cash transaction.
Those are just some of the reasons why the Cheeseboard Pizzeria and Mike’s Bikes, both in Berkeley, have stopped using pennies. The businesses also are two examples of an increasingly vocal group of activists who are advocating taking the penny out of circulation. The group also now has President Barack Obama on its side: On February 14, in response to a question during a Google Hangout about why the US still has the penny when Australia, Canada, and New Zealand have all retired theirs, Obama responded, “Anytime we’re spending money on something people don’t actually use, that’s an example of things we should probably change.”
For Mike’s Bikes founder Ken Martin, whose father was a forest-preservationist, the wastefulness of pennies made him decide to stop using the coins in his eleven Bay Area stores in June 2011. “He gets fired up about waste and inefficiency,” said Matt Adams, president and co-owner of Mike’s Bikes, of the decision. “It’s been fun, saves time, and people don’t even notice.”
Although Mike’s Bikes and Cheeseboard Pizzeria still accept pennies as payment, neither store hands them out in change. Instead, both stores round transactions down in the customer’s favor to the nearest nickel. Although the stores lose a little from the rounding, Adams said it’s ultimately worth it: “For us, it’s a net savings. It’s more convenient, and the time it takes to roll the pennies and deal with them makes it worth it.”
Worker/owner Ridwan Schleicher of Cheeseboard Pizzeria said the eatery stopped using pennies in August 2012 because “we just got sick of dealing with them.” (The Cheeseboard cheese shop and bakery next door still uses pennies, however.) “There’s been no negative reaction. People are pretty excited.”
On average, the penny policy comes up once a day at the Mike’s Bikes store at the top of University Avenue near the UC Berkeley campus. “People always get excited,” said sales manager David Werner-Sexton. The only negative experience he’s had with the policy, he said, was when “a long time ago in the San Francisco store, this customer, her family was in the copper business and she was worried that we would affect her family business.”
Both businesses also say they have no plans to stop letting people pay with pennies. “We’re not going to say you can’t, but we won’t give [pennies] back to you,” said Adams.
Alko Office Supply in Berkeley was one of the first stores to stop using pennies, and while the campaign against the coin is growing nationwide, there’s still a misconception that businesses must accept all forms of legal tender. The question is asked so frequently that the US Mint addresses it on its website: “There is no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.”
But there are powerful forces that want to keep the penny in circulation. The group Americans for Common Cents has campaigned actively against the penny’s retirement. The group is funded by Jarden Zinc, a Tennessee-based corporation that received $48 million federal government contracts in 2011 to provide zinc for pennies, according to a 2012 report by the nonpartisan Center for Responsive Politics. Jarden Zinc also paid lobbyist Mark Weller $140,000 in 2011 to talk to Congress and the Mint about “issues related to the one-cent coin, and penny re-design,” the center reported. Last year, Jarden spent $340,000 on lobbying the federal government.
But according Robin Adams, policy director of Americans for Common Cents, pennies are getting a bad rap and they aren’t as expensive to make as the US Mint contends. “The actual cost of producing the penny includes overhead from the US Mint,” Adams said. “If you take the penny out of circulation, the proportion that Mint applies to overhead would end up going somewhere else — like, for example, the nickel.”
Adams also argued that if the penny were to be retired, charities that rely on penny drive donations would be hit the hardest. Furthermore, he said there’s no guarantee that businesses would round in the customer’s favor, and, if they don’t, it would harm low-income consumers. “The natural tendency is for people to round up,” he said. “You can say [rounding] doesn’t make a whole lot of difference, a couple of cents here and there, but it does for people who are on stringent personal budgets.”
In Berkeley, however, retiring the penny hasn’t been a significant challenge. According to Werner-Sexton of Mike’s Bikes, the biggest issues that have come with banning the penny are what to do with the extra room in the coin drawer (they’re used for dollar coins at Mike’s Bikes and extra storage at Cheeseboard) and the response from some customers “when I say 66 cents and give them back 70 cents [in change] and they wonder if I can count.”