In a prior post about cash, I used the term broadly. This post is specifically about coins. In a previous life, I used to work for a cash-in-transit company, and so know first hand some of the challenges associated with them. Here are three that I was reminded by from recent news stories.
The first example is the sheer weight of them. There was a recent story about a shipment from the US Mint in Philadelphia being hijacked and robbed. Despite their being over $750,000 on board, the thieves only made off with $235,000. Why? Because they it was in dimes. In just the part they stole, there were 2 million dimes, weighing over 6 tonnes!
The second example is that everyone wants some, but no-one wants a lot! This applies to everyone – consumers, businesses and banks. They’re cumbersome, hard to count and store, and if you have large amounts, add to the cost of your insurance. As an aside, guess how were the thieves above caught? By struggling to dispose of the coins. As they found out, banks and coin counting machines have limits to what they’ll accept. They managed to bank just $5,200 despite spending many, many hours at multiple locations over several weeks.
The third is that above a certain amount, they become less useful. I’m sure everyone has heard stories of disgruntled people paying debts in coins, thinking that they had the final word and/or revenge. Yet most of these stories are urban myths. There have been multiple examples that demonstrate that they may be legal tender, but that the intent meant that the recipient could rightfully reject the payment. For example, a Colorado judge ruled in November that it wasn’t a form of payment after a defendant attempted to deliver $23,500 of loose, mixed coins to settle a legal dispute. The judge said that the delivery of more than three tons was done “maliciously and in bad faith,” and that the defendant must now pay more for its act.
