“The dollar coins have never been effective in the system because they look too much like the quarter.”
One challenge for the Mint is the rising cost of copper (used in all U.S. coins) and nickel (used in all except pennies).
Only four of the 80 metals on the periodic table — aluminum, iron (used to make steel), zinc and lead — cost less than copper and nickel, the Mint report stated. Lead isn't an option because of its potential health hazards.
“Pricing of steel, aluminum and zinc are pretty close to each other. … There are promising alternatives for the nickel, dime and quarter,” Peterson said.
To test possible new metal combinations, the Mint struck penny-, nickel- and quarter-sized coins with “nonsense dies” — images that don't exist on legal tender (a bonneted Martha Washington is a favorite subject) but are similar in depth and design to real currency.
Test stampings were examined for color, finish, resistance to wear and corrosion, hardness and magnetic properties. That last item might be the trickiest, as coin-operated equipment such as vending machines and parking meters detect counterfeits not just by size and weight but by each coin's specific magnetic signature.
Except for pennies, all current U.S. circulating coins have the electromagnetic properties of copper, the report said.
A slight reduction in the nickel content of quarters, dimes and nickels would bring some cost savings while keeping the magnetic characteristics the same. Making more substantial changes, like switching to steel or other alloys with different magnetic properties, could mean big savings to the government but at a big cost to coin-op businesses, Peterson said.
The vending industry estimates it would cost between $700 million and $3.5 billion to recalibrate machines to recognize coins with an additional magnetic signature. The Mint's researchers reached a lower but still pricey estimate of $380 million to $630 million.
Because of the cost to coin machines and the rising metal costs, Neese questioned whether it is time to consider doing away with all metal coins, not just the pennies and nickels.
“I think new metal options are worth looking at for the dime and the quarter, but it is getting so expensive using the current metals that in a few short years, we are going to be looking at a dime costing 15 to 20 cents and be back at where we are today for the penny and nickel,” she said. “We have to look at the future and what the future holds.”
Neese said it makes no sense to require coin machine operators to upgrade or replace their mechanisms today just to have to do it again in a few years.
“I think we just have to move on,” she said.
The Associated Press
MORE FROM NEWSOK
“I think new metal options are worth looking at for the dime and the quarter, but it is getting so expensive using the current metals that in a few short years, we are going to be looking at a dime costing 15 to 20 cents and be back at where we are today for the penny and nickel.”
Oklahoma City businesswoman