U.S. Mint tries to get consumers to use dollar coins
WASHINGTON -- The government is trying to convince consumers that dollar coins are greener than the dollar bill.
The U.S. Mint is spending about $12 million on a pilot project to promote the presidential dollar coin by appealing to Americans' duty to protect the environment while saving the government money. The campaign, which may be expanded nationwide, stresses that coins last longer than dollar bills, are recyclable and could save tax money if more people used them.
"You'll want to get out and do your part, too," says one of the TV ads, which features an animated Statue of Liberty buying a hot dog on the streets of New York City with two dollar coins.
In addition to TV, the four-month program includes radio, Web and newspaper advertising, and partnerships with banks and retailers that are giving out the coins as change. Ads featuring the gold-colored coins are even plastered on city buses and trains.
It is starting in four cities — Austin; Charlotte; Grand Rapids, Mich.; and Portland, Ore. — and may be expanded if successful. The Mint will be closely tracking bank orders for the coins in the four cities through November to gauge the program's success.
"The ultimate measure right now is how many more dollar coins get ordered and get put into circulation," Mint Director Ed Moy says.
Dawn Walker, training general manager at Bruegger's Bagels in Charlotte, says people are asking for the coins after she put up signs advertising that they carry the dollars featuring U.S. presidents. The favorable response has been a surprise, she says, noting people rejected the coin featuring Sacagawea, which preceded the presidential series.
"It's a great idea," she says of the Mint program. She says being involved is good public relations for the bakery.
The Mint's campaign is the latest attempt by the government to get consumers to spend, not just collect, dollar coins. But it's unclear if after decades of largely rejecting the money, consumers will respond. In the past, consumers and retailers have complained dollar coins were too heavy and more difficult to carry compared with bills and too close in size to quarters, leading to confusion. Many cash registers don't have a slot to hold the coins.
"Until Congress decides to stop the dollar bill, these efforts are going to be difficult to succeed," says François Velde, economist at the Federal Reserve Bank of Chicago and co-author of the book The Big Problem of Small Change.
Greater use of dollar coins instead of bills in everyday transactions would save the government hundreds of millions of dollars a year. Coins last about 30 years, more than 16 times longer than dollar bills do.
Dollars vs. quarters
The Federal Reserve estimated in 1995 that replacing dollar bills with coins would save $500 million a year. The savings would likely be much bigger today, because there are far more $1 bills in circulation now.
"The saving potential is very large," Velde says.
The Mint has a constant reminder of its uphill battle: The agency holds in storage more than 92.7 million uncirculated Sacagawea dollar coins created in 2000 and 2001.
The presidential dollar coin program, which began with George Washington in February 2007, is similar to the state quarters program. The Mint is introducing four $1 coins each year depicting the presidents in the order in which they served. The program is set to run at least through 2016 and will include only presidents who have died.
Despite the popularity of the state quarter program, the presidential dollar coins have not taken off, and interest appears to be waning. Federal Reserve banks, which buy coins from the Mint based on demand from banks that serve consumers and businesses, bought 96 million of the Andrew Jackson coins, the seventh and latest in the series. That is less than half the amount of Washington coins ordered.
One-quarter of the 2,513 adults surveyed online by Harris Interactive last March said they had seen the dollar coins. Only 13% favored the coins over paper dollars.
"Obviously, it has not worked particularly well by putting coins into the mainstream," says Rep. Mike Castle, R-Del., who originated the state quarters and led the effort for the presidential dollar coins. He says he had hoped that more people would be asking for the coins at their local stores.
The Mint has made some headway while spending about $7 million on marketing the presidential dollar coin before the four-city pilot program launched in August. The marketing budget has been devoted to more grass-roots efforts, such as launch events for each of the coins.
The Mint has also been promoting education programs about the presidents in conjunction with the coins' releases. A number of transit systems, including New York City's, are giving change in dollar coins.
Moy says their research shows that about two-thirds of Americans have at least heard of the dollar coins and notes that there have been far more orders for the presidential dollar coins than for Sacagawea.
The government of Ecuador, which uses the dollar, ordered $2.24 million of Sacagaweas during the first week of September, helping reduce the Mint's stockpile.
Studies, including those from the Government Accountability Office, the investigative arm of Congress, have found that consumers will embrace dollar coins only if dollar bills are pulled from circulation. Other countries have done away with their low-denomination bills. Canada has replaced its one-dollar and two-dollar notes with coins. In Europe, the smallest euro paper note is 5 euros, or the equivalent of about $6.70.
Congress is responsible for determining the nation's currency. "Human beings are creatures of habit and Americans even more so," Moy says. "The United States is lagging behind, but we eventually think we will catch up."
TELL US: Will you use dollar coins? Why or why not?