It wasn’t the lead story but, hey, it was three years ago and people still remember it.

For those of you new to the blog, a number of merchants refused to accept pennies at all, agreeing to round transactions down to the nearest nickel, in order to speed checkout lines and reduce handling costs.   We were able to show these merchants that it costs more than a penny to handle a penny, and that by not handling pennies at all, they saved money.

We need to collect all those pennies to raise money for ALS.  Otherwise pennies are litter.   How do we know they’re litter?  Well, they are indestructable, and yet the mint needs to make 4-billion new ones each year to replace the ones ending up inside coffee cans, vacuum cleaners and the occasional toddler.

However, this whole penny-anti “debate” misses the bigger point, which is that many if not most retail businesses feel that it costs more than a penny to handle a penny.    In other words, given the idea and the chance to do so, most businesses would be happy to round cash purchases down to the nearest nickel if they were not required to handle pennies.   The efficiencies gained by not having to deal with pennies would more than compensate for the loss of two  or three cents on a $20 cash transaction.

Obviously consumers would be better off getting a nickel in change than a few pennies that usually just get stored, thrown out,  lost or  littered, which is why they need to keep making billions more every year.    And retailers that didn’t want to go along, wouldn’t have to.  They could keep making small change and keep getting frequented by consumers who prefer receiving 1-4 cents to receiving a nickel in change.

This isn’t just my wacky idea any more.  It’s been embraced by economists on the right http://gregmankiw.blogspot.com/2009/01/penny-anti-protest.html and the left http://www.usnews.com/opinion/blogs/barone/2009/01/30/obama-could-abolish-the-penny-with-an-executive-order .

Most importantly, actual businesses have done this on their own.  Concord Teacakes ran a very well-publicized temporary promotion in 2009 described in the Boston Globe at http://www.boston.com/news/local/massachusetts/articles/2009/02/10/concord_merchants_launch_common_cents_revolution/ .    That was three years ago and customers are still asking about it.

The question is, what happens to those pennies that no one wants?   The answer is very easy.  Stores should put out some charity jars and collect the pennies for ALS.    Millions could be raised simply by collecting the pennies.

Instead of just getting a social security/tax refund/government pension check direct-deposited, you may choose to exchange your payment at a contracted website, where participating qualified sellers offer gift cards up to 25% more than the check, swapped for the whole check. Example: If you want a new fridge, and you have a $1000 tax refund due, you can go online and have that tax refund electronically swapped for a $1100+ gift card to a store or manufacturer selling refrigerators.

The benefit to consumers is obvious: anyone planning to spend money at the same place over time (like supermarkets) or on a large single purchase gets a much better deal.

For the government, this is a way to stimulate the economy without increasing the deficit. The government will actually make money from Day One on this by selling the rights to develop the site to the highest bidder — Amazon, EBay, FB, Groupon etc. They will want to be selected to develop the site because they can attract advertising easily since people would already be going on this site to shop..

Some sellers would definitely see the following advantages to doing this:

• ·They get a large prepayment, which is earmarked to be spent with them. (And of course, some people will forget to spend the whole card. They’ll factor that into their premium.)
• ·There is no expense to them in marketing the gift card, just posting it to the site. (Currently, when you see gift cards for sale in CVS, for example, you can be sure that the sponsor is only receiving about 80% of the face value. Remember, there is expense to marketing anything through stores, not to mention that people purchase them with credit cards sometimes, which itself creates an added expense.)
  

For instance, up here in Boston Legal Sea Foods offered a free lobster dinner (about a $40 value) to anyone who bought a $200 gift card in the restaurant. So Legal is willing to “pay” $40 to place a $200 gift card directly with a consumer instead of having to sell it through an intermediary, who would otherwise have marked it up by that $40, and only given Legal about $160 for each $200 card sold.. Also, when the government sent around those “stimulus checks” in 2008, several retailers offered to exchange them for gift cards at a substantial premium even with all the paperwork involved in doing that at their stores, by hand.

Bottom line: Clearly many sellers would do this.

If you like this idea and want to get a better deal on your next tax refund, social security check, pension etc. , just pass this link around to as many people as possible, and tell them about the idea and get them to “like” the site and pass the ideas along.

Oh, yeah, and if you work in the private sector, like most of us, you won’t miss out: Once this site “goes live” many employers will start offering the option of having one of your paychecks swapped into the site as well. The ShopAmerica gift card site will become the preferred, central low-cost high-value market for high-denomination gift cards.

No one except those of us who have suffered with ALS care about our jerseys, it would appear.    We couldn’t get the attention of MLB.   Or, to put it more accurately, we got their attention,  got their  approval, and then some anonymous person there put the kibosh on it at the last minute.

So I am going to post a series of more general-interest great ideas, the equivalent of the ALS jersey idea but of more interest to more  people.    If you like the ideas you can share them broadly and get more people onto this site and eventually someone will “notice” us in the real media and we can state our case more broadly and perhaps shame MLB into what they couldn’t do out of goodness (and they would have made a profit too).

Each idea will be in  a separate posting, so that you only have to forward the ones you like.  None of them are political. My own politics are “severely moderate” and in any event I would not use this site to advocate for anything other than  the jerseys.   I will post about one idea a day for the next five days.

This “haircut” was a nuisance fee that most retailers didn’t mind paying, just like they accept credit cards and don’t mind paying the fee.   However, a few Congresspeople (mostly Democrats but the Republicans don’t get any points on this one either since they went along with it) got incensed about this and legislated an end to it.  The banks, deprived of their usual fee from retailers, are compensating by charging consumers, who for the most part are livid.  It’s hard to imagine $5 causing such distress in any other circumstance.  It’s because this $5 fee is totally due to Congress not thinking before they act and solving a fairly minimal problem by creating a much bigger one.

Solution:  repeal this law, about the dumbest idea since Prohibition other than WIN Buttons, and replace it with a very simple rule that allows banks to charge the haircut, but allows retailers to charge less to people who pay cash.

Instead of paying a $5 monthly fee, consumers get lower prices.   Retailers are no worse off than they were before this all started, and banks can get their money, only now that we consumers know debit cards aren’t “free” to use at checkout, we might use them less and pay cash (and save cash) more.   I know I will.

The Gehrig Jersey idea was a perfect example of that.  However, we have many other ideas that we will post, as we await a breakthrough on the jerseys.   Comments as always are welcome on Facebook and right here, though for the latter we realize it is a pain to comment on a blog these days but you wouldn’t believe how much spam gets avoided by requiring a two-step sign-in procedure for commenters.

In particular, if you like an idea, forward it to as many people as possible so we can get some grassroots support and tell your friends to “like” this site.

The first new idea will be posted this afternoon.

In business, few things are more frustrating that not being able to convince someone to act in their own best interest.  That is exactly what happened here with CMG.  They could have made money on these jerseys AND gotten positive PR.  (There is always the added benefit of  “doing the right thing” but that didn’t seem to move them either.)

So I will stop posting for a while, possibly a long time, until it looks like we are going to get a break of some kind — possibly a someone-who-knows-someone kind of thing.  But keep us on your “friends” list because if and when it happens, you’ll want to know about it.

The guy we work with at Majestic couldn’t have been nicer about it.  He understands what people in Gehrig Jersey Nation are going through, and really wanted to help (he would have gotten a commission for selling them too, but he seemed genuinely moved by our plight well well beyond the minor financial benefit to him) but the CMG people simply didn’t say yes when it became time for the “official” OK from them. 

We were just a little blip on their multi-billon dollar radar screen, I’m afraid.  The farther removed someone is from the actual pain that we and our loved ones have gone/are going  through, the more our proposal looks like a quirky, very small, business deal and the less it feels like something that is simply the right thing to do, even with all the publicity benefits to MLB that we’ve discussed.

So…

If anyone knows anyone who can get this in the media, or who can appeal to the higher-ups at CMG (Phil?), or get the Gehrig Estate to lean on them (Judy?), well, the time is now.