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Writing in favor of the new dollar coin

March 16, 2006
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Writing in favor of the new dollar coin
Joe Wolfinger

The introduction of the Sacagawea (gold) dollar coin in 2000 provided the self-serve carwash industry with a much-needed higher denomination coin. The gold dollar coin eliminated the poor design of the silver Susan B. Anthony coin that was easily confused with a quarter.

Today's dollar has the purchasing power of a quarter in the 1960s. The dollar coin allows consumers to buy more with fewer coins.

It eliminates the impression of high prices when a customer drops two coins in the slot instead of eight for a $2 self-serve wash cycle. Consumers receive their change faster and in more manageable numbers from bill verifiers.

Durability & versatility

The dollar coin is extremely durable compared to the dollar bill. The U.S. Mint estimates the useful life of a dollar bill at 18 months, while the average dollar coin is expected to be in circulation more than 12 years.

The dollar coin will save taxpayers millions of dollars in mintage costs.

With the introduction of new multiple coin acceptors in the industry, the dollar coin now acquires some of the versatility of tokens. Most coin acceptors can be programmed to give the dollar coin any value you want in 25-cent increments.

If you want to encourage usage of the dollar coin, you could increase the value to $1.25 or offer a discount, like a summer special where the customer receives more time for using two dollar coins.

There really is no reason not to include the dollar coin in your payment acceptance methods at your carwash. The dollar coin can fit in with credit cards, bills and quarters as another method of payment.

It has the added benefit of having no additional cost, like those associated with credit cards.

It is also more durable; with fewer problems than the dollar bill and there is a lower reject factor compared to bills.

Capacity & availability

Another advantage is your bill changer capacity in coin value increases, while the number of coins you process decreases.

The U.S. Mint will introduce the presidential dollar coin series in 2007, where the Sacagawea side of the coin will be replaced with imprints of deceased presidents over a period of years.

Through the lobbying efforts of the International Carwash Association (ICA), the bill authorizing this program included a mandatory requirement by the U.S. Mint and the Federal Reserve to provide the dollar coins in bulk bags, excluding the mixing in of silver Susan B. Anthony dollar coins.

This program will eliminate the problems of obtaining gold dollar coins in an easy-to-handle manner.

All hyped up

The opponents of the dollar coin are stuck with only one poorly-shaped argument: they claim it was a mistake by the mint and the government to introduce a dollar coin.

"I didn't want it and neither does anyone else, and I told you so," is the basis of their argument. They blame the U.S. Mint and include analogies that stretch the imagination.

The proposal to revamp the entire U.S. mathematical system from English to metric measurements is hardly comparable to the mint introducing a dollar coin.

They claim Americans can't be "hyped" into changing their longstanding preferences. I disagree, in a few short years the banking industry has hyped the American public into abandoning their pay-as-you-go attitude for one of totally financing every purchase they desire.

In the last five years, credit card debt in the U.S. has increased from $250 billion to over $800 billion dollars.

That same banking industry has also managed to force retailers to take credit cards for $1 and $2 purchases. It has established a national private three to six percent sales tax on every retailer in the form of processing fees.

The banking industry has spent hundreds of millions of dollars to eliminate cash in our system and convince the American public that credit cards are the only way to purchase anything. I would say that has been very successful hype.

Token value

The dollar token has some promotional advantages to the dollar coin. However, the token has a serious disadvantage when it comes to coin acceptors: the machine will accept any token that matches the size of the one in use at your carwash. This can lead to your wash accepting tokens from surrounding area businesses.

The dollar coin is an exclusive metal alloy that eliminates this problem.

Mints, reserves and bureaus

U.S. coins are produced by the U.S. Mint. U.S. dollar banknotes are printed by the Bureau of Engraving and Printing and since 1914, have been issued by the Federal Reserve.

The mint is required to obtain Congressional approval to make a change in the coins they mint; that is the reason the penny and half-dollar have not been removed from circulation. The zinc lobby has spent lots of money maintaining the penny in the system.

The Federal Reserve has no congressional approval requirement to change bills, which is why bills have changed numerous times in the last few years.

It is much harder for the mint to move quickly on any coin changes, and yes, the system is full of lobbying efforts that make no sense at times and bad decisions have been made. However, I see no proof that the mint did anything but make a good faith effort to support the carwash industry and provide the public with a useful dollar coin.

The claim that the U.S. Mint knew that the vast majority of American citizens prefer dollar bills to dollar coins is not accurate. I checked with Public Affairs Director of the U.S. Mint, Michael White, and their legal counsel; they indicated the mint contracted with a public relations firm in 1997 and a study was completed that indicated the coin would be accepted by the public and outlined guidelines to provide awareness to businesses and users once the gold dollar was minted in 2000.

Fifty million dollars was spent on public awareness upon the introduction of the gold dollar, mostly for TV. The mint is a profit center for the government; it is not a budget line item.

Between $500 million to $1 billion each year is provided to the U.S. Treasury from the mint. I would expect a significant one-time expenditure on promoting this coin.

In-bay bill acceptors were not widely used by the carwash industry prior to the introduction of the gold dollar in 2000. They have only been introduced on a limited basis in the last few years and they are not free of problems.

I don't really feel they are a viable argument against the dollar coin; it would appear they would be compatible with each other.

Bad publicity

The introduction of the dollar coin has certainly been challenging. I do not feel it has been rejected by the public; rather the public has not had the opportunity to work with it and decide if they like it or not.

Did you ever receive a gold dollar coin from a retailer when it was introduced in 2000?

Our carwash currently dispenses both quarters and dollar coins. We give mostly dollar coins and some quarters for the $5 and $10 bills.

We have had no complaints over the last two years from customers. Most of them have never seen the dollar coin before and want to take it home to save or give to the grandkids.

The state quarter program established by the U.S. Mint was the most successful coin mintage in the history of the country. I still see customers going through quarters at our dispenser looking for one they are missing in their collection.

A vote of confidence

I feel the presidential dollar coin program can have the same success. I am planning to switch to all dollar coin vends on our bill verifiers when it starts.

I feel it is important to maintain cash in our retail system. The dollar coin is an important part of that equation.

Why not vend the dollar coin for larger bills instead of using quarters? Why not have the customer use two dollar coins at your self-serve bay instead of eight quarters?

The dollar coin will only become familiar to the public if retailers, especially the vending retailers, make it a part of their payment method. If you are going to vend minted coins, then why not vend the dollar?

The opponents of the coin continue their drone; "I don't like it, it won't work and I told you so." Maybe they will be successful in drowning out common sense and help the banking industry eventually eliminate any cash payment for goods and services.

But if that happens, the bankers will be sticking their hand in ever retailer's pocket for a share of all his revenue with their high-cost card processing fees. And we will have no one to blame but ourselves.

At this time I prefer to avoid these processing fees and accept only cash, including the dollar coin. Other operators are free to accept cards, tokens, bills, and quarters as payment if they desire.

The dollar coin is already in the system and is here to stay. I do not understand why some are bent on constantly criticizing the coin and any changes that would make it more usable by our industry and the public.

Joe Wolfinger has been the owner and operator of Solar Shine Carwash in Chambersburg, PA, since 1983. Solar Shine was one of the first carwashes to utilize solar panels for the heating of wash water.