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Who Wants $1 Coins?

Posted On: 8/31/2012

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TAGS: dollar coin, U.S. coinage issue, dollar coin debate, American Amusement Machine Association, Amusement and Music Operators Association, coin-op business, jukebox, videogame arcade, small business, vending, Andy Shaffer, Shaffer Services, Dollar Coin Alliance, bulk vendors, vending machine, vending operating, Marcus Webb, Vending Times editorial

Okay, here's a quick test. Did you interpret this headline to mean, "Nobody wants dollar coins?" If so, please go back and read it again -- and stop trying so hard to read a political spin into plain English.

The headline is an honest question. But its seeming ambiguity reflects the confusion that surrounds this complex issue.

Who wants dollar coins? The question matters this year because there are competing bills on the issue before Congress. The "COINS" Act would phase out the $1 bank­note, since experience has shown that a $1 coin won't circulate as long as the note is available. The Currency Efficiency Act would end "massive overproduction" of what it calls the "unpopular $1 coin."

So who really wants dollar coins to replace dollar bills? The switch is favored by thousands of U.S. amusement operators -- but far from all, according to the president of the Amusement and Music Operators Association, Andy Shaffer of Shaffer Services (Columbus, OH).

In a recent interview with VT, Shaffer noted: "Many progressive operators see the world is moving to credit cards, mobile apps, and new generations of customers who rely less on cash. But many locations still use quarters and dollar bills to put into games and jukeboxes. So I can't give you a clear definition of where AMOA stands on dollar coins. We have members on both sides, some favoring the dollar coin and others who oppose it because they feel they must spend so much money retooling their equipment to prepare for this form of currency."

AMOA recently polled operators about their positions on the coin and surprisingly the vast majority said it does not support the effort to eliminate the $1 banknote to prompt greater use of the coin. A majority also believes the elimination of the note will hurt their businesses. Only half think AMOA should get involved in the coin's lobbying effort.

The National Automatic Merchandising Association is paying close attention to the latest dollar coin debate, but likely sees no reason to apply resources to the lobbying effort.

The American Amusement Machine Association favors dollar coins -- this year. But they haven't always. Last year, AAMA president John Schultz told the Washington-based newspaper Roll Call: "Thirty years we've been working on this and thrown a tremendous amount of money to it. Its time has passed." This year, AAMA reversed course again and is firmly back in the pro-coin camp.

Also favoring dollar coins are the Dollar Coin Alliance, the National Bulk Vendors Association, Arizona copper mine interests, and -- according to a DCA poll -- 65% of American citizens (once they learn about potential savings from eliminating dollar bills).

However, it's getting harder to figure out where the public really stands. Despite DCA's poll, dozens of competing surveys show large majorities of Americans intensely dislike dollar coins. In one poll, 75% said dollar coins are unnecessary and 77% said they're less convenient than paper.

Even among those who favor the potential savings, many see dollar coins like public transportation: it's a great idea for "someone else." (Meantime, they want to keep their own cars and paper money, thank you very much.)

In the past four decades, the U.S. has tried to launch dollar coins three times -- and each time, the result has been a "fiasco." That's not my term. "Fiasco" is the word used by neutral parties such as the Numismatic News and countless others, including foreign observers who don't have an axe to grind.

It's also getting harder to understand the potential economic impact of dollar coins. Supporters and opponents both stack the deck in their own favor. The most reliable neutral party, the U.S. Government Accountability Office, recently said switching from paper to coins would cost taxpayers money for seven to 10 years, but save money over 30 years.

There is even more confusion on the part of some readers about VT's editorial stance. We often publish stories about challenges facing dollar coins. However, we cannot emphasize this point enough: Just because you report bad weather, it doesn't mean you like thunderstorms.

For the record, VT remains neutral on coins. That said, Congress is highly unlikely to spend its "political capital" on eliminating dollar bills and replacing them with dollar coins, as long as most opinion polls show that 80% of the U.S. public disagrees.

In an editorial last spring, the Washington Post concluded: "To the extent it's possible to weigh the matter objectively, facts favor the coin."

Facts are one thing; political reality is something else. Members of Congress rarely vote against public opinion -- except in extremely rare circumstances, and then only when the issue is considered of overwhelming importance, like war and peace. (Or unless the senator or representative is retiring from office.)

What, then, is the future for the dollar coin? Considering the growing complexities of every related issue, you might be forgiven for saying ... it's a coin toss.