Imperfect cents: Ireland to cease making 1c and 2c coins
National Payments Plan recommends nationwide roll out for ‘rounding’ system
Ireland has been minting coppers at three times the rate of the EU average but there is a consistent shortage of them across the country.
Minister for Finance Michael Noonan will recommend to Cabinet on Tuesday the withdrawal of one and two cent coins following the success of a pilot project in Wexford.
Mr Noonan has received a report from the Central Bank’s National Payments Plan recommending the roll out nationally of the rounding project so as to reduce the need for one and two cent coins.
The recommendation comes following the overwhelming success of a nine-week project in Wexford in 2013 where transactions were rounded up or down to the nearest five cent.
According to Wexford Chamber of Commerce CEO, Madeleine Quirke the project which ran from September 17th until November 17th 2013 was a tremendous success.
“Some 250 businesses in Wexford participated in the project - everyone from supermarkets to pubs to fast food outlets to garages - anyone handling large amounts of cash.
“Some 85 per cent of consumers and 100 per cent of business owners surveyed afterwards were in favour of the project - in fact we have had no complaints or negative comments at all.”
Ms Quirke said the success of the project stemmed from the fact that business people in Wexford adhered to the strict guideline that there should be no increase in prices.
“It was stipulated clearly by the Central Bank when Wexford was chosen that there would be no increase in prices and businesses here adhered to that faithfully,” she explained.
“Prices remained the same - items were still carrying the same prices tags and it was only the total bill at the end of the transaction that was rounded up or down to the nearest five cent.”
“Consumers were very happy to support the project once it wasn’t hitting them in their pocket while it cut down on the time that business people had to spend dealing with coin.”
Unveiling the pilot project back in 2013, Ronnie O’Toole of the National Payments Plan explained that the pilot trial followed the Central Bank surveying customers about the coins.
“People said they couldn’t use them any more to buy anything or use them in machine so what people do is that they take them out of their wallet or purse and put them in a jam-jar.
“As a result, we have had to replace those coins going out of circulation - we have issued over €30 million worth of one and two cent coins since the euro was introduced in 2001.
“In fact our issuing of replacement one cent and two cent coins accounts for 85 per cent of all coin production for the Central Bank at the mint in Sandyford,” said Mr O’Toole in 2013.
However even small change comes at cost with each one cent coin cost 1.7 cent to mint and each two cent coin cost more than two cents to mint, explained Mr O’Toole.
This has resulted in the Central Bank having to spend well in excess of €30 million on the coins in the period between 2001 and 2012.
It’s understood that while the Central Bank has recommended out the national roll out of the rounding project, participation in the scheme will be on a voluntary basis.
This means that one and two cent coin will remain legal tender as is the case in a number of other Eurozone countries which have already adopting a rounding policy.
Earlier this month Fine Gael Senator Catherine Noone said the Central Bank should abolish the coins.
“Ireland has been minting coppers at three times the rate of the EU average and yet there is a consistent shortage of them across the country. This is causing consistent problems for businesses when it comes to change shortages and is a hassle shared by businesses and consumers alike,” she said.
“It seems senseless that we are bending over backwards to produce these coins given the cost of production costs more than their stored value, with a one cent coin costing 1.7 cent to produce and a two cent coin costing about two cents.”