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Coins or Bills?
by Sean Carroll

For months now, many Wal-Mart stores have quietly started handing the one dollar coins back to customers as change instead of dollar bills.

Some wonder if this is proof that dollar coins are making a comeback.

Shoppers at the Wal-Mart in Henrietta were just beginning to notice the dollar coins they were given as change.

"I think they're heavier, I wouldn't want to use them," shopper Jessica Turner said.

"It's alright; it's money,” Lester Nelson, of Rochester, said. “It's still money, just going back to the old ways.”

The motivation for putting more dollar coins into circulation is, well, money. It costs the U.S. Government more to make coins than dollar bills, but they last longer.

According to the U.S. Mint, a dollar coin costs about 20 cents to make, but lasts in circulation for an average of 30 years.

According the U.S. Bureau of Engraving and Printing, the dollar bill costs about 4 cents to make, but only lasts in circulation for about 20 months.

Using that math, it takes 18 dollar bills to last 30 years for a total cost of 72 cents and 52 cents more that it takes to make one dollar coin.

George Conboy of Brighton Securities speculates that same reasoning also makes sense for a large corporation like Wal-Mart.

"Wal-Mart is a business focused highly on efficiency,” Conboy explained. “It is quite likely that dollar coins can be much more easily handled mechanically, or by employees, without tearing them or losing them.”

Considering the amount of cash passing through Wal-Mart stores on a daily basis, those little losses can certainly add up, Conboy said.

But at the “customer’s always right” in the end, and Conboy doesn’t think Wal-Mart’s use of the dollar coin is ever going to lead to the disappearance of the paper bill.

"The mint likes them, some retailers like them, the vending companies love them,” Conboy said. “The only people who don't like these coins are the American public."

Wal-Mart spokespersons were not able to give a specific reason as to why, and for how long, they’ve been distributing dollar coins in many of their stores. They did say they’d continue to look for answers and get them to us soon.

Customers and some store clerks said dollar coins have been passed out at the Henrietta Wal-Mart for the last few months.

Back in 2000, the U.S. Mint actually released half of all its new Sacagawea dollar coins to Wal-Mart days before the Federal Reserve received the coins. It was an effort to promote the coin, but one that never took with customers.

A spokesman from the U.S. Mint says there is no such agreement with any major retail agency concerning the distribution of the 2007-2008 Presidential Dollar Coins.

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