A big change to the small change
The South African government announced last week that it will be discontinuing the production of 5 cent coins.
The discontinuation of the 5c denomination is to be welcomed because the denomination is useless in every-day purchase transactions. Nothing in the South African retail sector costs 5c and the only role of the coin is as a rounding unit in providing small change to consumers. Since the commencement of a democratic government in the early 1990s, South Africa has abandoned the 1c and 2c denominations and for consumers there is no sound reason to continue with the 5c piece either.
For a long time, South African retailers were able to charge prices ending in 99c. Since the abandonment of the 1c and 2c pieces, the trend has become to end prices in 95c. The effect of this pricing strategy is that consumers are usually left with many 5c pieces that cannot easily be used to pay for anything and which banks may be loathe to exchange for larger denominations because it is laborious to count out so many individual coins. Retailers also do not generally appreciate having a pile of the coins dumped on the counter at the till (yet they do not object to handing them out as small change). It would not even be appropriate to give 5c to a beggar. The coin therefore no longer serves any worthwhile purpose for consumers or the public. Its only significance is its strategic value to retailers in determining their prices and as such its discontinuation is a good move.
Both sides of the South African 5c piece, which will no longer be minted.
The only other advantage of the 5c coin that I have heard of is in engineering workshops where, if the coin is neatly drilled through the centre, one is left with a useful metal washer of an appropriate size. But this practice is illegal, since it involves the defacement of state property, and it is not recommended by the administrators of this site. For those technicians who are not concerned about the illegality of the improvised washer, there is also the question as to whether the metal of the coin is as reliable as the purpose-made washers which should rather be used.
Further to this, the 10 cent denomination coin is to be replaced with a new 10 cent denomination coin with effect from April next year. One wonders, however, how long it is going to be before the 10c piece becomes equally useless to consumers and for the reasons described above it is also abandoned.
According to government spokesman Jimmy Manyi, “The new proposed 10 cent denomination coin will remain the same size. The metal content will change from the previous bronze-plated steel to copper-plated steel. This will result in the reduction in cost of producing these coins.”
Source: allafrica.com
