Penny Pinching Ends: Bill to Halt Penny Production in One Year, Rounds Cash Transactions to Nearest 5 Cents

The "Common Cents Act" is on the table, and it's looking to make some noticeable changes to your pocket change and how you handle cash. The headline news from this bill: the U.S. Treasury would stop minting one-cent coins – yes, pennies – within a year of the bill becoming law. Alongside this, about a year after enactment, any time you pay for goods, services, or even wages with physical cash, the final total will be rounded to the nearest 5 cents.

The Penny's Last Jingle?

Under Section 2 of the Act, the familiar copper coin is heading for retirement from production lines. This halt is scheduled to occur within one year of the bill's passage, effectively amending the current rules for coin production (like those in 31 U.S.C. 5112(a) which outline what coins can be made). But don't rush to cash in your penny jar just yet; the bill clearly states that all existing U.S. coins, including pennies, will remain legal tender. So, that collection on your dresser? Still perfectly good for payments.

There's a small exception for coin enthusiasts. The Secretary of the Treasury can continue producing one-cent coins, but strictly for numismatic collectors – people who collect coins as a hobby or for their investment value. However, these special collector's pennies must be sold in a way that their sales revenue covers or exceeds their total production cost, including all overhead, as detailed by regulations like 31 U.S.C. 5132(a).

The 5-Cent Shuffle: How Cash Rounding Will Work

Starting one year after the bill is enacted, Section 3 kicks in with new rules for cash transactions. When you're paying with cash, the final amount due will be rounded. If your total ends in 1, 2, 6, or 7 cents, it gets rounded down to the nearest nickel. If it ends in 3, 4, 8, or 9 cents, it rounds up.

For example, if your coffee costs $2.73 in cash, you'd pay $2.75. If that same coffee was $2.72, you'd pay $2.70. There's a specific instruction for very small totals: if your cash purchase is just $0.01 or $0.02, it will automatically round up to $0.05. It's crucial to note this rounding mechanism only applies to transactions made with physical cash. Payments made via checks, electronic transfers, gift cards, credit cards, or similar methods will still be for the exact amount.

What's the Real-World Tally?

So, what does this mean for everyday life? For businesses, it could streamline cash handling by reducing the need for pennies. For those of us using cash, the impact of the rounding rule is a bit of a mixed bag. On any given transaction, you might save a couple of cents or pay a couple extra, as the rounding can go either way for most ending digits.

The provision that rounds transactions of $0.01 or $0.02 up to $0.05 is worth noting. For very small, individual cash purchases – think a single loose screw at the hardware store or a piece of penny candy (if you can still find it!) – the cost will effectively increase if paid in cash. While the bill aims for fairness by rounding both up and down, how this plays out across many transactions for an individual will depend on their specific cash spending habits. The idea is that it should generally even out, but it’s a detail that might subtly affect folks who rely heavily on cash for small, everyday items.