What The Common Cents Act Means For Cash Purchases

(KMDL-FM) When I was a younger person, the feeling of cash in my pocket was good; it offered an air of confidence that I could afford to get the goods and services I needed without question.

Fast forward to now, and if you attempt to pay for a purchase with cash, at some places they will turn you away. And based on new legislation just passed by the United States Senate, the way we all pay for things with cash is about to change in a big way.

silver and gold round coins — Photo by Kevin Dunlap on Unsplash

I think we are all familiar with the plight of the penny and how that coin is going away. Well, the removal of the penny from the money supply means that prices now need to reflect totals that end either in .00 or .05, but for taxes they don't always do that.

How Does the Common Cents Act Affect the Use of Pennies in the United States?

This new legislation, called the Common Cents Act, not only calls for the termination of production of the penny, but it makes the practice of "rounding to the nearest nickel" legal. I was not aware, but in some states, that is against the law; this legislation would supersede any state statutes, I suppose.

The rounding process would be as follows: any price ending in 00, 01, or 02 would be rounded down to 00. Any price ending in 03, 04, or 05 would be rounded up to 05.

Why Are Nickels In Danger of Being Discontinued?

silver round can on brown wooden table — Photo by Masarath Alkhaili on Unsplash

You would think this would solve our coin and cash issues, but there is a problem with the nickel. Did you know it costs a little over .13 cents to make a .05 cent nickel? If that's not government thinking I don't know what is.

The Common Cents Act, should it become law, has been passed by the Senate, and a similar version has been approved in the House, would allow for a change in formula, or at least the exploration of a change in formula to make nickels more affordable to make.

Nickels have been costing more than .05 cents to make for more than 20 years, and there is very little "nickel" in the coin; it's mostly copper, which is why the price of manufacturing has risen so dramatically. And if you were wondering just how safe the "nickel" is in the American money supply, just know there is legislation pending that would see the nickel go the way of the penny.

But then again, aren't we about to be a totally cashless society anyway? As convenient as that seems, I think I might still miss putting a quarter in a jukebox or tossing a coin in a fountain for good luck, or purchasing gum with the turn of a crank. Ah, memories. If you remember doing stuff like that, you probably remember doing stuff like this.