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What's in a nickel (hint: not just nickel)

New U.S. nickels are shown on display at an unveiling ceremony January 12, 2006 in Washington, DC.

When a nickel is worth five cents, but costs ten cents to make, the U.S. Mint has to consider an update.  As extracting, transporting and engineering metals like copper and nickel gets more expensive, the Mint is weighing changes to composition of coins. 

"It's the same way that we absorb in music," said Garrett Burke, a coin enthusiast who designed the concept for the California state coin. "It used to be vinyl, then it went to digital, now we do downloads.  We can't expect the composition of the coin to remain the same, particularly when the costs go up."

For business owners who make their trade in change, some of these proposals are nervewracking. 

Roni Moore is vice president of marketing for the National Automatic Merchandising Association, which represents vending machine operators.

"We need the mint to understand that a redesign of currency would change the alloy content of coins, likely in a way that would force our vending companies to upgrade or replace coin acceptors," Moore says.

According to Moore's calculations, the process could cost between one hundred and five hundred dollars per machine, a formidable cost to small business owners.

About the author

Noel King is a reporter for Marketplace's Wealth and Poverty desk.
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@Dwayne73, amounts less than a dime wouldn't go away--they would just be rounded for a cash transaction. That barebones bank account can continue to accumulate discrete cents month after month. Sticking with the edge case, if you deposited $100 and wanted to take all your money out after just one month, then yes, either the bank would have to eat 5 cents, or you'd give that up, and your financial situation would change by an effectively unmeasurable amount.

@merrill77, I'd be up for considering that (stop minting new pennies and nickels), but we'd still be wasting time with people digging around for change that's barely worth the time it takes to count it.

If the half cent was eliminated in 1857, and is worth more than a dime is today, it would seem we should eliminate the penny, nickel and dime. Come on Congress, this is common sense!

Marketplace- how about a "I have always wondered" about why we still have the penny?

How about if they just stop making more pennies and nickels? Maybe all those worthless pennies and nickels in peoples drawers would find their way back into circulation :)

A commenter asked what's a nickel worth. The answer is the amount of interest you earn on a $100 at a standard big bank savings account. Do you think that a bank that is paying 0.05% APR is going to round up?

Sorry, National Automatic Merchandising Association. Shenanigans.

I might have bought (HA!) this argument if we hadn't seen a retooling of an entire continent 15 years ago for the Euro, and the continued appearance of bill acceptors in the US.

Unless you're carrying bag phones because you don't want the expense of updating to an iPhone, then, you get to play keep up.

Just a part of the continued destruction of the US economy by the Globalists of the New World Order.
Its all about their pursuit of endless POWER, POSITION and PELF.

With a little historical perspective, the case to eliminate the penny and the nickel becomes obvious. Just go back to 1935 (picked arbitrarily). The value of a penny then equates to over 16 cents today. In other words, inflation has been 1600% since that time. If a penny worked as the smallest form of currency then, why wouldn't a dime be adequate now? A dime is still worth less that the penny was in 1935. Go back farther in history and you could almost make the case that the dime is almost obsolete as well. The fact that both the penny and nickel cost more to make then they are worth is further proof that it's time for them to go. Anyone who says we NEED them isn't looking at the issue objectively.

If I may rant for a moment... Yes, get rid of both the penny and the nickel! A penny is worth basically nothing, and a nickel is not far behind. If you're making federal minimum wage (ignoring taxes) you make a penny every 5 seconds. It's a waste of everyone's time to handle these small value coins. And as sparky81884 pointed out, today's dime is worth less than the half-cent coin was when it was eliminated in 1857, and we survived then!

Round the final total for cash transactions down or up to the nearest dime (and prosecute merchants who always round up), and leave electronic transactions alone. Mint a dime, 20-cent piece, smaller 50-cent piece if we must, and dollar coin--reuse all the current coins' presidents to cut off that line of naysaying. Eliminate the dollar bill, but boost circulation of the two dollar bill to take its place. Done. Vending machine companies would still have to update to take the new 20 and 50 cent coins, but it would be a far more future-proof change.

Just another sign of how much the Federal Reserve has mismanaged the dollar. Five and Dime stores are Dollar Trees today. If not for the relentless debasement of our currency, (which Federal Reserve economists keep telling us is for our own good) we wouldn't need to worry about nickels being worth more as raw metal than as coins. It's not getting more expensive, the dollar is just becoming more worthless.

The concern with needing to upgrade coin acceptors following a redesign of coins is certainly valid. Consider instead simply eliminating pennies and nickles. I believe that a dime is worth less now than the half-cent was when it was discontinued. Perhaps dollar coins could fill those empty register drawers (since we already minted them...)

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