Getting rid of 1 & 2 eurocent coins

[Stapel]

They have been increasing the weight of my wallet too long now. From 1 september, most businesses in Holland won't accept nor give them. Finland never even bothered to introduce them I think.

The German 'Bundesbankpraesident' has also told he could imagine getting rid of it.

Is it time to do this in the whole Eurozone?

 

[stormbind]

Dunno. Why would you buy a #3.99 product if you can't use the #0.01 change?

(I cannot find the euro symbol... humn)

The UK and US both have pennies, and I think the Euro is pretty similar in value to the USD. The UK also has a 2 penny coin, but that's like #0.04 or #0.05?! I don't know the current exchange rates.

 

[Hakim]

Yes it is!

A friend of mine actually voted no in the € referendum because of the many coin denominations (we have 4: 50 öre, 1 krona, 5 kronor and 10 kronor, the latter is almost 1€).

 

[Longasc]

The reason behind getting rid of them is that 1/2 cent coins cost more than 2,5 cents to produce or so.

I think it is time to get rid of them from a customer point of view. 1.99 is 2.00 EUR, so if they want to trick us into "for less than two EUR", it would be 1.95.

Still, 2 Cent are app. 5 Pfennig (German Currency), and this is a rather small amount of money, but it does matter... large supermarket chains calculate in this little quantities.

The question is if it is not better to urge the market to adjust prices to .5 endings. 1 and 2 Cent coins could still exist, but only in minor quantities. Later on they might be completely abolished.

 

[Adebisi]

A friend of mine actually voted no in the € referendum because of the many coin denominations (we have 4: 50 öre, 1 krona, 5 kronor and 10 kronor, the latter is almost 1€).

Sweden wouldn't be forced to introduce the 1 &2 cent coins. Finland never did. They're completly unnecessary, what could they possible needed for?

Things can still be sold for 1.99, you just have to pay 2.00.

 

[King Alexander]

@Longasc: don't the posts accept them anymore? I remember that they wheighted 50 pfennig and gave one 0.5 Mark(before Euro).

 

[Stapel]

The question is if it is not better to urge the market to adjust prices to .5 endings. 1 and 2 Cent coins could still exist, but only in minor quantities. Later on they might be completely abolished.

Not needed!
In Holland we got rid of the guilder cents in 1978 or so. It appeared that it doesn't make difference. You win some, you loose some.

 

[AVN]

They have been increasing the weight of my wallet too long now. From 1 september, most businesses in Holland won't accept nor give them. Finland never even bothered to introduce them I think.

The German 'Bundesbankpraesident' has also told he could imagine getting rid of it.

Is it time to do this in the whole Eurozone?

I think we don't need them. Rounding to the nearest 5 cents is very acceptable for me. Just as we did when we still had the guilder.

And it result in a cost saving of 30 millions IIRC. So it's good for the economy too.

So IMHO we can do this in The Netherlands. It's up to the other countries if they will follow our model.

 

[Longasc]

I think this is the first idea from the Netherlands I agree with.

 

[Cullyn]

I think we don't need them. Rounding to the nearest 5 cents is very acceptable for me. Just as we did when we still had the guilder.

Automatically giving every businessman a free jump in his profits. And don’t try and say they would round down, they wouldn't. (from €1.99 to €2 = 0.5% rise in profit, now multiply that by the sales and you will get serious money)

And it result in a cost saving of 30 millions IIRC. So it's good for the economy too.

Its crap for the economy and even worse for charities. First the economy argument. Economics 101, you never, ever, better your economy by reducing the consumer’s choice. By rounding to the nearest 5c you automatically start to homogenise prices. And because we place little value on 1 or 2c we give them, by the million to charities.

So IMHO we can do this in The Netherlands. It's up to the other countries if they will follow our model.

Actually The Netherlands will be in breach of the rules of the Euro. 1 & 2c are legal tender in The Netherlands and it is against the law to refuse the Legal Tender.

The pennies are here to stay, and if you don’t like them give’em to charity.

 

[AVN]

Automatically giving every businessman a free jump in his profits. And don’t try and say they would round down, they wouldn't. (from €1.99 to €2 = 0.5% rise in profit, now multiply that by the sales and you will get serious money)

If a good costs Euro 1.99, I'll have to pay Euro 2 (if I pay it in cash, if I pay it electronically I still pay 1.99).

But if I buy 3 goods of the same product, it will cost 3*1.99=5.97
In that case I have to pay 5.95

IMHO on average it doesn't make a lot of a difference. And if I really want to use all advantages as a consumer I will win in the end (paying electronically when it's in my advantage, otherwise I will pay in cash).

Its crap for the economy and even worse for charities. First the economy argument. Economics 101, you never, ever, better your economy by reducing the consumer’s choice. By rounding to the nearest 5c you automatically start to homogenise prices. And because we place little value on 1 or 2c we give them, by the million to charities.

Sorry, but I don't understand the point you wants to make here.
Can you please elaborate on this ?

Actually The Netherlands will be in breach of the rules of the Euro. 1 & 2c are legal tender in The Netherlands and it is against the law to refuse the Legal Tender.

The pennies are here to stay, and if you don’t like them give’em to charity.

The total price (price of all goods you buy in the same shop) will be rounded.
You can still use your 1 and 2 eurocent coins to pay that price.

In a few years they will be gone, because no one uses them anymore, but is that a problem ?

 

[The Last Conformist]

I hate the 1c and 2c coins. In fact, home in Sweden I'm annoyed by the 50 öre (~5c) coins. So if the Dutch get rid of them, the more power to them.

 

[Longasc]

I think it is a wrong assumption to assume they would round up everything.

1.99 might become 2.00 more often than 1.95, but everytime you get a product that is rounded down, you will compensate for that.

Charity issues... hm. I give nothing or at least a *serious* amount. This is also a rather weak argument. Does the charity in Finland suck because they get no 1 and 2 euro cent coins...?

 

[Hakim]

Automatically giving every businessman a free jump in his profits. And don’t try and say they would round down, they wouldn't. (from €1.99 to €2 = 0.5% rise in profit, now multiply that by the sales and you will get serious money)

Prices are not determined by some sense of "fairness", but by competition. Regardless of number of denominations (or which currency), this price pressure, or lack of pressure, stays the same.

Edit: I doubt prices like €2.1, €4.1 etc will exist for very long, they will most likely be squeezed down to €1.95 and €3.95 etc. Not because the shop keepers are generous but because the market pressure (consumers).

 

[Hakim]

Sweden wouldn't be forced to introduce the 1 &2 cent coins. Finland never did.

I'll tell my friend that after a decade or so when the next € referendum is held.

Btw, what happens when a greedy German/Italian/whatever wants his 1 cent back?

 

[Stapel]

Automatically giving every businessman a free jump in his profits. And don’t try and say they would round down, they wouldn't. (from €1.99 to €2 = 0.5% rise in profit, now multiply that by the sales and you will get serious money)

It has been proven again, again and again it won't work like this.

I had written that down a view posts up.

Please read and think before you post .

 

[The Last Conformist]

I'll tell my friend that after a decade or so when the next € referendum is held.

A friend of mine seriously wanted to forbid pensioners from voting in the Euro referendum on the logic they're gonna die off soon enough in any case, so it didn't really concern them.

 

[Cullyn]

If a good costs Euro 1.99, I'll have to pay Euro 2 (if I pay it in cash, if I pay it electronically I still pay 1.99).

That is impracticable and probably illegal. You cannot differentiate between those who pay electronically or by those who use the Legal Tender of the state.

But if I buy 3 goods of the same product, it will cost 3*1.99=5.97
In that case I have to pay 5.95

Who says? By your own method you would €6 by cash and €5.97 electronically. You cannot have goods prices at €1.99 when you are not going to be able to return the 1c in change.

IMHO on average it doesn't make a lot of a difference. And if I really want to use all advantages as a consumer I will win in the end (paying electronically when it's in my advantage, otherwise I will pay in cash).

As a consumer you will loose. Even by rounding correctly ALL prices which are currently .99 & 98c will increase to €1. And as consumers we will be ripped off.

Sorry, but I don't understand the point you wants to make here.
Can you please elaborate on this ?

By rounding to the nearest 5c you automatically start to homogenise prices which means that you have limited the choice of a business man to determine his prices to be higher or lower than the competition. While many shops can easily absorb a 1 or 2c discount when you start having to drop prices in 5c increments suddenly you can start getting into big money territory. In the long term this would be unviable for any small to medium business.

Charities get a hell of a lot of money by doing a thing called raiding the piggy bank. Basically, because we don’t like 1 & 2c coin we try to get rid of them in the most convenient way possible, which tends to be a bucket held by a cute girl (or guy) raising money for various charities. We leave it to them to count the cash. By lessening the amount of hard currency you lessen the amount they get.

The total price (price of all goods you buy in the same shop) will be rounded. You can still use your 1 and 2 eurocent coins to pay that price.

Now you have confused me, I thought you wanted to eliminate 1 & 2c coins. Also the above is called discriminatory pricing.

In a few years they will be gone, because no one uses them anymore, but is that a problem ?

That would need the agreement of all the Euro member states for that and that will not happen. The demise of the 1 & 2c is greatly exaggerated.

I think it is a wrong assumption to assume they would round up everything.

1.99 might become 2.00 more often than 1.95, but every time you get a product that is rounded down, you will compensate for that.

Charity issues... hm. I give nothing or at least a *serious* amount. This is also a rather weak argument. Does the charity in Finland suck because they get no 1 and 2 euro cent coins...?

I think it is realistic to assume they will round everything up. As for it balancing out that my expense of the changeover is that it won’t.

Well giving to charity is a personal matter, but I regularly help collect for charity and I can tell you that pennies & 2c dominate our takings.

 

[Cullyn]

Prices are not determined by some sense of "fairness", but by competition. Regardless of number of denominations (or which currency), this price pressure, or lack of pressure, stays the same.

Edit: I doubt prices like €2.1, €4.1 etc will exist for very long, they will most likely be squeezed down to €1.95 and €3.95 etc. Not because the shop keepers are generous but because the market pressure (consumers).

I think this is the post you are talking about. But anyway. Just to not, in the Rep of Ireland (where i reside) the changeover to the Euro resulted in an extra .75% on inflation for the year of the changeover. (am grabbing that stat from memory from a conference i was at, i haven't got time to find a link to it)

It is true to say that the market will deftermine prices but here's a warning, the Rep of Ireland is the most open market economy within the Eurozone and it is our experence that when the goverment add a restriction to trade (as it would by limiting the amount curreny avaible) then prices rise.

Any savings made by eliminating th 1 & 2c woiuld be more than lost by the following price hick. Fiannal i woudl say, if it isn't broken, why fix it?

 

[DvR]

Who says? By your own method you would €6 by cash and €5.97 electronically. You cannot have goods prices at €1.99 when you are not going to be able to return the 1c in change.

Euhm, no.. You would pay 5.95 in cash.. In fact, before we had the Euro, this was the standard where I live..
So by our methods, it would work..

And that 1 cent.. To be honest, I rather not have it back anyway.. I hate those darn things in my wallet..