Ireland is not the first country to consider cutting the one and two cent coins and moving to a system of rounding small change up or down to the five cent mark.
Denmark, Belgium, the Netherlands, Finland and Sweden are among some of the EU countries who decided to adopt the rounding system.
And Ireland is the latest country to join the movement to stop making new one and two cent coins. Existing coins will still be considered “legal tender” but by the end of October shops and supermarkets across the country will no longer give out the one and two cent coins.
But the one catch is this only applies to cash purchases. Credit purchases and prices in stores will still be able to be sold at €1.99 for example.
Why is Ireland scrapping one and two cent coins?
It actually costs more for Ireland to mint one and two cent coins than in other EU countries. It costs the Irish central bank 1.7 cents to mint a 1 cent euro.
And nobody wants to use them. Think about it, what can you really buy for one or two cents anymore? Not much. So yes, according the a study in 2013--85 percent of consumers are happy about not have a surplus of change in the country.
Can you guess who is NOT happy about eliminating small change?
Yes consumers and retailers benefit, but for charities who rely on collecting small coins from a large population this could be incredibly damaging to revenues.
Charities throughout the country protested cutting one and two cent coins. With good reason, too. Charities fear that getting rid of small change will have a drastic negative effect on donations.
Think about how many people toss a few coins into a donation bucket after shopping or while walking down the street. This is an easy revenue stream for charities.
Charity for Change is a nonprofit that has over 3,000 locations across Ireland collecting money primarily in the form of one, two, five, and ten cent coins.
This is a great way for charities to benefit from unwanted coins. These donations can really add up, which is why charities are so upset. Charity for Change claims they will lose millions in donations from this currency policy.
Charity for Change created a “National Coin Week” the first week of November to try and cash in on one and two cent coins before they are phased out.
Charities who rely on collecting small coins on a large scale have invested in infrastructure as well. The Ronald McDonald House Charities (RMHC) collected $54 million (USD) last year alone from small coin receptacles.
Eliminating one and two cent coins is a bigger “change” than you might think. It’s a discussion that has to involve NGOs and charities.
But charities also have to adapt to the future. Small change will continue to be phased out around the world as technology expands. New revenue streams will have to be devised.