What Is My Deal With Dollar Coins?

A version of this ran in the San Antonio Express News.

I have a ‘thing’ about paying for small daily stuff in dollar coins.
Apparently, I am the only person in America with this rare affliction.

“Seriously, what is your deal with dollar coins?” I’m asked twice weekly by whichever coffee barista quenches my addiction and collects my combination of Susan B. Anthonys, Sacajaweas, and Presidentials.

Taylor’s $1 coin

Why do I pay for everything with dollar coins? Would you believe doing my patriotic part via seigniorage?

What is Seigniorage?
My wife had not heard of seigniorage when I mentioned it this morning, so I’m guessing a few of you out there haven’t heard of it either.

Seigniorage most broadly refers to all the extra profit that a government makes by creating its own currency, whether in the form of coins, bills, or bank lending through the Federal Reserve system. It turns out our government makes a lot of money for itself by making money for us.

The United States earned an estimated $11 Billion in seigniorage in 1990, $25 Billion from seigniorage in 1999,
and up to $77 Billion in 2013.

Governments generate this profit in various ways (I count five ways) but for this discussion of my coin fetish I’m going to focus on just two of them.

1. Currency ‘lost,’ or currency permanently held by collectors, and;
2. The difference between the cost to produce currency and its face value

These two forms of seigniorage underscore a primary reason for both the 50-State Quarters program from 1999 to 2008, and the Presidential Dollar Coin program currently underway.

Non-circulating currency

When people lose currency or collectors take money out of circulation, the US Mint realizes more ‘pure profit’ on its coin issuance. This is because the federal government gets to pay for things with currency that it creates, but then the federal government doesn’t have to provide anything in return, because the currency got squirreled away by collectors.

In issuing dollar coins with different Presidents, the US Mint actively attempted to profit from this numismatic demand.

I know its seems weird that ordinary people ‘losing currency’ and collectors putting away currency forever is a real part of a government’s profit plan with coin issuance, but it’s true.

Currency-creation costs

In addition, the US Treasury earns a reported $0.45 profit per dollar issued, the other form of seigniorage.

Producing dollar coins instead of paper was meant in part to boost this source of profitability. Although paper dollars are cheaper to make, coins last many times longer – an average of less than four years for bills versus thirty years for coins – boosting the long-term profitability for the US Mint issuing dollar coins rather than bills.

Unfortunately, nobody actually uses dollar coins (except, of course, me) so they’re stuck unused and out of circulation, in Federal Reserve warehouses – as many as a reported $1.4 Billion in 2013.

I blame Honest Abe when I lose at poker

That’s where my one-man patriotism comes in. If everybody used dollar coins, the US Mint would report a higher profit, saving all of us taxpayers money.

See? Isn’t this is a great idea?

I have some other great things to say about dollar coins.

When I inevitably lose money at my weekly poker match with the neighborhood dads, dollar coins provide me over time with a useful, rough, metric of my losses. Whenever I see one of the neighborhood dads paying for things with dollar coins, I know that’s my bluffy check-raise that got called, two weeks prior. Goodbye Sacajaweas! Hasta la vista Benjamin Harrisons! I miss you so much!

Ask any of a dozen coffee baristas in town if their cash registers jangle with dollar coins, and you’ll know with certainty that’s where I hang out. It’s my little calling card. It’s a fun way to track me all over town.

My wife – who used to be a waitress in College Station – abhors my dollar-coin fetish, especially when I try to tip at restaurants with the things. Apparently the heavy jangly coin feeling is a not a great thing when you’re on your feet all day rushing from table to table. But isn’t a Franklin Pierce coin delightful for everyone? No?

The real reason
Ok, would you like to know the real reason I use dollar coins? It’s not really patriotism. Or tracking my losses. It’s pure affectation. My own cheap form of brand building.

Pharrell has his hat

Pharrell Williams has his funny hat. Winston Churchill had his cigar.

When I roll up to the Whataburger drive-thru in my dirty Crimson Hyundai Elantra, I’ve got my ‘gold’ coins.

Burger-and-fries-guy is all like: “Whoa, who is that gold coins guy buying the jalapeno and cheese with double meat?”

So that’s basically the reason.

Churchill had his cigar

Please see related post: Mint The Gold Dollar Coins



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12 Replies to “What Is My Deal With Dollar Coins?”

  1. You’re not alone. Once I had an eccentric friend and landlord who collected rent only in the latest dollar coins coming out so I would have to put in recurring orders at the credit union to get a box of the latest president. Also I use them to give my 5yo money for odd jobs like painting the picnic table or pulling staples. They’re more tangible, easier to count and they’re not choking hazards like dimes and pennies with my 2yo. So I have a bag of dollars and half dollars that he can earn and he uses them to buy Legos at the local toy store. My main complaint is that the half dollars are too big for all of our piggy banks.

    1. I admire your attempt to use 50 cent coins as well! I did that last fall (as well as an order of $2 bills!) and it took a while to use up all $500 worth of 50 cent coins.
      That landlord sounds like a piece of work. Bless his heart, as we say in Texas.

  2. Fellow regular user of the dollar coin and $2 bill. Younger baristas are especially confused by the Susan B. Anthony and on lucky occasions they will even briefly insist that they are in fact only $.25…and then they have the ah-haa moment. Life’s minuscule amusements.

  3. I haven’t made a habit of using dollar coins, but may need to start. I am a constant user of $2 bills, though. Want to pacify your wife and make sure waitress remember you? Pay your tips in $2 bills.

    I even had one person ask me if they were ‘real’. Most people get a little thrill, and tell me they collect them, so I’m helping their collection.

  4. I miss the old Eisenhower dollars. Can’t confuse those with quarters!

    Maybe we can unleash those unused two dollar bills and one dollar coins by getting rid of the one dollar bill.

  5. Two dollar bills for tips for cocktail waitresses and bartenders almost always ends in the following rounds being slightly more robust, plus they remember you the next time you come in. Cab drivers (remember them?) used to like them, and now car-hailing services tend to think they’re worth remembering to. But they’re just as easy to carry and keep track of as all the other bills. I don’t know if I’ll be able to shift to unusual denominations of coins as easily. But I’ll try. 😉

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I founded Bankers Anonymous because, as a recovering banker, I believe that the gap between the financial world as I know it and the public discourse about finance is more than just a problem for a family trying to balance their checkbook, or politicians trying to score points over next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me.

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