A Morrisville sporting-goods store has adopted a ban on pennies at its cash register — even rounding up change due from cash sales in a customer’s favor — to take a stand against the one-cent currency.
This month, Power Play Sports stopped giving customers pennies during cash transactions.
Owner Caleb Magoon had been contemplating the change since buying the business last October.
The decision is as much protest as it is practical, Magoon said.
In 2011, the U.S. Mint spent $119 million to produce $49 million worth of pennies. That does not include the fixed costs of $17.7 million in infrastructure to make and distribute the coin.
Magoon sees this as an example of government waste that could easily be eliminated, and he questions whether keeping the penny makes sense from a retail standpoint.
“In terms of hard currency, when do you need a penny?” Magoon asked. “There’s not even penny candy anymore. Why keep something that’s so outdated?”
Plus, not dealing with pennies eliminates the inconvenience of having to make a trip to the bank when his supply runs low, he said.
Under the store’s new, penny-free policy, customers who make credit-card and check payments will not see any changes. Customers who pay with cash will pay exactly the same, or a bit less.
Power Play Sports rounds up in the customer’s favor when making change for each transaction. For instance, if the change due on a purchase is $1.26, the store will round up and give the customer $1.30.
“We’re not eliminating the use of the single cent, just the hard currency,” Magoon said.
Magoon doesn’t expect the change to have much impact on his profit margin.
About 75 percent of the store’s transactions are made with credit or debit cards, and 10 percent are made with personal checks. Just 15 percent are made with cash.
He estimates he’ll lose an average of 2 cents per cash transaction.
“In the grand scheme of things, it’s a drop in the bucket,” Magoon said. “I wager I’ll be paying between $30 and $50 a year for the convenience of not dealing with the penny. To me, it’s a worthy price to pay to make a stand.”
So far, customers like the change, Magoon said.
“I always round up,” Magoon said. “I’m happy to give a few cents to my customers. A lot of them are like, ‘Just keep the change.’ It could be revenue-neutral.”
In the past 10 years, Congress has introduced two bills to eliminate the penny, but neither has succeeded. Magoon says he prefers to act locally rather than contact his U.S. representatives.
“Just deciding that I’m not going to do it anymore is my small thing,” Magoon said. “I don’t have to champion this cause nationally. It’s already out there.”
Magoon hopes other local retailers will take the same position.
“There’s almost no practical reason to have pennies,” Magoon said. “If you’re dealing with something small, you probably could price it to make it round out to an even number. Ninety-nine cents rounds out to $1.05 when you add the tax.”
Power Play joins a growing number of U.S. retail stores that have banned the penny. There’s even a website, pennyfreebiz, that offers support and advice to businesses looking to follow suit.
Other nations have eliminated the penny in recent years. In March, Canada announced it was dropping its one-cent coin — and expected to save $11 million a year. Australia eliminated one- and two-cent coins in 1992.