Meet the Government’s Brown Nickel Nobody Wants to Use

Could cut production costs by as much as $40 million a year

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Officials at the U.S. Mint have been looking into cheaper ways to make our smallest coins, Fortune reports, and the latest cost-saving proposition is a brown nickel made out of a copper alloy.

The coin would be the same size as an existing nickel, but the color and weight of a penny. Making a copper-plated nickel out of zinc is just one of six possible metal alloys for U.S. coins identified by the Mint.

The Mint has been researching cheaper ways to make pennies, nickels, and dimes because production costs for the cheapest coinage far outweighs the actual value of the coins. The penny and nickel have cost more than their face value for eight years, and in 2013 the Mint lost $105 million producing these two coins alone. The government has spent $8.1 million to research alternative metals that could save the Treasury $30 to $40 million per year.

Some say we shouldn’t even use pennies and nickels at all. Canada announced in 2012 that they would rid of their pennies, saving taxpayers $11 million a year. But American coin usage is still going strong; coin production increased 18% last year, and 62% of that growth was for the production of 6.6. billion pennies.

So who knows if a brown nickel is going to fly with the coin-toting American public?

[Fortune]

10 comments
PaulAnderson1
PaulAnderson1

It will be hard enough getting rid of the penny without fussing with the nickel.  But really, there's no need for the penny and little need for the nickel.  It's time for a readjustment of our cash system.

People didn't mind using quarters in the '70s.  Since a $1 coin today is worth what a quarter was then, what's the difference?  It's long since time to stop making pennies and dollar bills.

And it's not that people don't want dollar coins, it's that they could never get them!  It has never been easy to get them--you have to find a bank that stocks them, then wait while the teller goes to the vault to get them.  Try doing that with any other denomination of coin or bill and see how long it takes for them to disappear from circulation!

Dollar coins are more convenient than dollar bills, whether the public believes that or not.  They're easier to use, faster to count, and would save taxpayers a lot of money.  If you combine it with getting rid of the useless penny (which costs 2¢ each to make) there is no downside to this.

Rustyballs
Rustyballs

Canada is not making any more pennies. We don't miss them. Totals are rounded up or down to match the closest value. There is no need to have a penny that costs probably 5 cents to make. We have the Loonie (one dollar) and the toonie, (two dollars). They will last much longer than paper bills. That saves the mint money bay not having to replace the worn out bills so often. We have now begun switching to the new polymar bills, to make them last longer.

It may seem like a nickel and dime way to save money for the government, but why not do for the common sense of it.

It is unfortunate that the American public seems to be so adverse to getting rid of their one dollar bill, when it can save some of the public funds the government has to spend to make the money.

That is just a Canadian thought.

KeithCameron
KeithCameron

I'll keep my coins thank you. So long as a Dollar is a unit of 100 then the smallest divisor of that unit needs to be minted.

cruzkit
cruzkit

The use of coins/paper money will soon fade into history. I am guessing that the mining industries and people who get a kick out of physical money are the real reasons why they are still around.

Hotpuppy
Hotpuppy

Why not a coin dollar and two dollar?  coin is far more durable then notes.

therantguy
therantguy

I have the cheapest solution...ready...STOP MAKING THEM!...lord, the smallest coin should be $0.10...and in twenty years it should a quarter....just get rid of this junk...nobody needs them.

TimRobinsonAus
TimRobinsonAus

The idea that the smallest divisor be the criteria is a pointless & arbitrary suggestion. Money represents Store of Value not mathematical principles. Hmm, Pointless arguments for holding on to outdated items instead of embracing progressive change... You're American?

DeweySayenoff
DeweySayenoff

@therantguy

Here's a math lesson: Take $15.68480 trillion dollars in  transactions (U.S. GDP, 2013).  Multiply by 0.01.  That's 1% by the way.  The amount?  $156 billion dollars.  This was the cost of using one penny on the dollar in the U.S. in 2013. 

Getting rid of that "junk" could actually tank the economy.

As long as we have sales taxes and people who are too paranoid to carry plastic (which, given the easy with which merchants and retailers are hacked, is a more justifiable paranoia to have than average), the penny (and nickle), in some form, are going to be necessary. 

The U.S. treasury loses 121 million dollars each year to keep more than three orders of magnitude worth of currency circulating.  That's not exactly small change, and well worth the investment.  If there's a way to do it cheaper, great.  But it's still a necessary currency value.

TimRobinsonAus
TimRobinsonAus

Look out the sky may be falling too..... Currency reductions have occurred in many countries to positive outcomes.... It's ok America, no need to be afraid of logic even if your politicians are