The Penny Is On the Way Out. Can You Still Buy Something With It?

The U.S. government is no longer going to mint pennies, and soon cash retail transactions will be rounded to the nearest nickel. What, exactly, does a single penny buy you these days? We took a drive around town to find out. 

On Thursday, the Treasury Department announced the U.S. government is winding down production of the penny, according to an announcement first obtained by the Wall Street Journal.

The one-cent coin had a good run. When first minted in the late 1700s, it was a small but useful amount of money, and could purchase something like a biscuit, a candle, or a piece of candy. But more than 200 years of inflation have eroded the value of the ubiquitous copper coins to the point where they’re hardly worth the trouble of keeping track of, to say nothing of the expense of minting them—about four cents apiece, according to the Treasury Department.

By early next year, there won’t be enough pennies in circulation, and stores will have to start rounding to the nearest five cents, the Treasury Department said.

That led us to wonder: is a penny worth anything at all? Can you go into any business with a single penny and buy something with it? A quick Internet search suggested that a few items were available for a penny, including individual nails at some hardware stores, test sheets of paper at copy places, and one-cent stamps at the post office. But I wanted to see for myself. I took a ride around my home town of Marlton, New Jersey on a rainy Thursday afternoon to see if my spare change could be converted into goods and services of any kind.

The Gas Station

The most straightforward way to spend a single penny seemed to be at the gas station, where regular unleaded was $3.099 a gallon. I pulled up to Wawa in my Chevy Malibu. By my calculations, I could get about two and a half tablespoons of gas, enough to power my car 450 feet to my next destination. I reached into my cup holder for a shiny copper-clad coin.

In New Jersey, it’s illegal to pump your own gas. I would have to actually ask the attendant for $.01 worth of fuel.

“This is going to sound weird,” I said through the window. “I need exactly one cent worth of gas, or as close as you can get it.”

The attendant was a good sport, and was even enthusiastic when I told him about the demise of the penny, and my experiment.

“I’ll see what I can do,” he said. “It’s tricky though.”

The quickest of quick taps on the fuel pump sent a tiny dribble of gas into the tank, and the readout shot up to $0.04. The cheapest trip to the gas station of my life by far, but quadruple what I had hoped to pay. I would either have to find a gas station with a slower pump, or go back to the drawing board.

The Sporting Goods Store

My next idea was live bait: if I could find bait sold by the pound, perhaps an individual bit of fish food could be bought for a single penny and set free. It was about to be a nightcrawler’s lucky day.

But it was not to be. At Dick’s Sporting Goods, the bait was sold in $4.99 tubs, and by a quick estimate, each individual worm cost at least a dime anyway. A penny won’t even get you a meal for a robin these days.

The Grocery Store

With food as expensive as it is, this seemed like a longshot. But I did have one idea: Shop-Rite has a hot food bar for $8.99 a pound. One of the items is fried rice. Since the average grain of rice weighs about 21 milligrams, I should be able to get something like 50 grains of rice for a penny. I put a tiny spoonful of rice into a take-out tray and took it to the self checkout machine: it came up as 29 cents.

I bought the rice, ate all but a few grains, and tried again. This time, the machine came up with an error and asked me to wait for a cashier. Maybe the nearly empty tray was too light for the scale?

“This is going to sound crazy,” I told the cashier when he arrived. “But I am trying to buy exactly one cent worth of rice.”

The cashier smiled and nodded, in the way you would do to someone who insists they’re not crazy, manually entered a $0.01 cost to my transaction, and plunked my penny into the change receptacle. I had bought an absolutely minuscule amount of rice for one cent.

The Saga of the Penny

Given the penny’s extreme lack of buying power, it seems long past time for the government to get out of the business of minting them. Indeed, people have been calling for the death of the one-cent coin for decades. But the penny still has its defenders, and a surprising amount of research has been published about the pros and cons of getting rid of the coin. In February, a researcher at the University of Toronto found that getting rid of the penny could actually cost the government money in the end, since it would result in the need for more nickels, which also cost more to mint than their face value.

With the Treasury’s announcement, which came at the behest of President Donald Trump, the anti-penny side decisively won the battle over pocket change. And bipartisan legislation has been introduced in Congress to remove any doubt about the legality of the Treasury’s move. In April, a group of Democratic and Republican senators proposed a bill that would officially end penny production, and require retailers to round up or down to the nearest five cents for cash transactions.

In a post-penny world, it’s unlikely that price tags will change to reflect the new five-cent minimum denomination, if the experience of our neighbor to the north is any guide. Price tags ending in .99 are still common in Canada, which eliminated the penny in 2013.

Now, anything costing 99 cents will be rounded up to $1 at the cash register. Believe it or not, researchers have studied the potential impact of this. A 2001 study found that merchants would pocket all those extra pennies, equating to a “rounding tax” of $600 million a year on customers. But those findings were challenged by a 2007 article that found the “rounding tax” virtually disappeared when you took sales tax into account, since it pushed up prices on individual items enough to make them round down sometimes.

And if you are the type of person who sees the opportunity to get free stuff by making one- or two-cent purchases and having them rounded down to a cool $0, the lawmakers are ahead of you: the law specifies that those amounts will round up to five cents.