Canadians agreed in a recent Angus Reid poll that it is time to do without the penny, which has lost 95 per cent of its purchasing power since its introduction in 1908. According to the survey, 55 per cent of Canadians support dropping the one-cent coin, while 35 per cent want to keep it, and 18 per cent of Canadians responded they'd even be "happy" when it's gone.
Mario Canseco with Angus Reid said he was most surprised with the gender split, which shows 65 per cent of men want to eliminate the penny and only 45 per cent of women are on board.
Also, younger Canadians between the ages of 18 and 34 are evenly split on the penny's fate, whereas the older groups are increasingly in favour of scrapping it.
In Vancouver, a couple coffee shops have taken initiative and will not be giving pennies out in change, although they will still be accepting them to pay for coffee and snacks. Their concepts are consumer friendly: rounding up and down depending on the sale value once taxes are included. The most anyone would have to pay more for a product would be two cents, where a $1.33 coffee would cost $1.35, a $1.32 item would be rounded down to $1.30.
Altitude Research addressed many concerns in a market study of the implications of removing the penny, done for the Royal Canadian Mint. It appears most small retailers are slightly in favour of removing it, while consumers are split on the issue. Overall, small retailers are 63 per cent in favour of removing the penny, 19 per cent against. The Bank of Canada sets the cost of creating each penny at 1.5 cents.
So what will franchises do? The first franchise to adopt the "pennyless" approach may set off chain reactions among competitors or may face negative political and patriotic responses from consumers, consultants say.
A careful plan of notifying customers and ensuring a fair "rounding" procedure will be essential. There may also be a negative response if a franchise decides to implement a pennyless model across its entire system. With or without early adoption, it looks like the penny won't be around for much longer.
–- Compiled by Kevan O'Brien
from Western Investor, February 2011
