Do We Really Need The Penny?

I’ve been working on this idea for a while, but I need a little help.  It makes sense to me, but I can’t quite do the math.

There’s lots of talk these days about getting rid of the penny.  The government says that the cost of producing the one cent piece is more than the value of the coin and that the great majority pennies are in jars on dressers or in the sofa cushions.  Still, pennies continue to be produced by the millions.

One reason is pricing.  I have long believed in the power of a nine (e.g. $.99) in the pricing of items, making a customer subliminally believe that they are getting a bargain.  Its deeply ingrained in retail thinking and we use it ourselves on almost every product we sell.

Getting rid of the penny would mean a revolutionary new way of thinking about price.

How about this instead.

Get rid of the penny, but leave the nines (or whatever the number) in the price.  Every transaction would be rounded up or down to the nearest nickel.  A $.99 item would round up to a dollar when the transaction was completed, a $.91 or $.92 item would round down to $.90.  If the price was $.93 or $.96, you would pay $.95.

At the end of the day (or week, or month) I’m guessing that the total amount charged by a merchant, between rounding up and rounding down, would be almost, if not exactly, what would have been charged if the actual price was used, even after adding sales tax.

If this worked, current pricing psychology and pricing schema could remain in place, the books would balance, and that pesky penny would be a thing of the past.

Yes, I really thought of this myself.

Good idea, or no?  I’d love to hear from you.

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