Change…er, REAL Change, coming to Austin

Our friends at Community Impact – Austin report that the city is one of four cities in the country the U.S. Mint is visiting with a program to change how people think about change.

Real Change Exchange is an effort to educate the public about the $1 presidential coins the agency began producing in 2007. A mobile exchange that looks similar to an armored truck will visit several Austin area businesses offering to swap people’s paper currency for coins. The idea is to foster use of the coins as a convenient way to handle small transactions.

“The advantages of using the $1 coin is $1 coins last for decades,” said Greg Hernandez, deputy director of public affairs for the mint. “They last about 30 to 40 years. And when their service is done, they’re 100 percent recyclable, meaning we’ll melt them down, take the metals out and reuse them for other coins.

“If the nation uses $1 coins on a regular basis, we can save billions of dollars over time. The GAO — the Government Accountability Office — in 2000 did a study that if we were to go to $1 coins strictly, it would save about $522 million a year.”

Using $1 coins is also good for the mint. Though the price is down somewhat from a year ago, it still costs the mint slightly more to make pennies and nickels than the coins are worth. A $1 coin, on the other hand, nets a good return for the mint. That means more for the government’s general fund, to which the mint each year gives all money left over after covering operating expenses.

“It costs about 20 cents to make a $1 coin, and the Federal Reserve pays the mint $1 face value,” Hernandez said. “So the mint makes basically 80 cents seigniorage, which is the difference between production and what we get paid face value from the Federal Reserve.”

Austin was among the cities chosen for the program because the people tend to be more open to new ideas.

“We find that those particular four cities are also very progressive in accepting various types of new things, such as recycling, so we thought this would be the best place to test,” Hernandez said. “And we’re finding that in the Austin market. More than 200 retailers have signed on to participate.”

Though the mint is hoping the $1 coins will catch on, there are no plans to phase out the $1 greenback.

“The Presidential Coin Act of 2005 did not address the issue of replacing the dollar bill,” Hernandez said. “Both of them, for now, will coexist.”