- The Washington Times - Monday, June 11, 2007

Paper money can cause problems for vending machine owners —more service calls to fix the machines, more hassle in dealing with crumpled bills and a loss on sales from unaccepted bills.

So the vending machine industry welcomed the $1 coins when the U.S. Mint started its presidential series Feb. 15, said Brian Allen, director of government affairs and counsel for the National Automatic Merchandising Association.

But the presidential dollars haven’t been nearly as popular as the successful state quarter series, and vending machine officials have seen few of the coins.

The Mint released the John Adams $1 coin into circulation May 17, the second in a series that features four presidential dollars each year. The first in the series, the George Washington coin, was released Feb. 15.

About 304 million Washington $1 coins and 202 million John Adams $1 coins have been released, said Ed Moy, director of the U.S. Mint.

“We’re cautiously optimistic,” he said.

The presidential series is the government’s third attempt to bring $1 coins into wide circulation, after the Susan B. Anthony dollar in 1979 and the Sacagawea dollar in 2000. Both were unsuccessful.

The Mint spent more than $67 million to promote the failed Sacagawea coin from 1998 to 2001, according to a report from the Government Accountability Office. That report concluded that the marketing campaign raised public awareness but not widespread use.

This time, public awareness has reached 60 percent in March, up from 15 percent to 20 percent in November, when the coins were announced.

That doesn’t mean people are using them, Mr. Allen said.

“Unless we have them generally available from a machine or dollar-bill changer, which there are few around, then our members probably are not seeing themvery much,” he said.

The British pound coin and Canada’s dollar coin were accepted by the public after the British one-pound note was removed from circulation and circulation of Canada’s dollar note was reduced.

In the U.S., the coins are meant to complement rather than replace the dollar bill, which has been in circulation since 1862, Mr. Moy said.

Consumers prefer coins for more coin-intensive transactions, such as from a vending machine, according to research, but they prefer dollar bills for other transactions, Mr. Moy said.

Vending machines are equipped to accept $1 coins, said Tom McMahon, senior vice president of the National Automatic Merchandising Association, which serves the food and refreshment vending, coffee service and food service management industries.

“Coins work virtually 100 percent of the time,” Mr. McMahon said. “At best, dollar bills work about 98 percent of the time. It’s 2 percent of sales we’relosing to outmoded dollar bills, and we capture those sales with coins.”

Metrorail stations do not take the $1 coins, but buses do, said Metro spokeswomanCathy Asato.

The coins make up a “very, very small” percentage of the total, she said.

Metro fare card machines will be retrofitted to take the $1 coins, although no date has been set, Ms. Asato said.

Nathan Spiwak, acting branch manager of Wachovia Bank at 17th Street and Pennsylvania Avenue Northwest,said customer response to the new coins is tapering.

“When the first coin came out, we had quite a few requests,” Mr. Spiwak said. “We were excited to see that, but within a month or so, it turned around. We started receiving coins back.”

Businesses nearby, such as Cosi and Starbucks, have been returning the $1 coins to the bank, Mr. Spiwak said.

“It’s a novelty,” he said. “People don’t really keep it in their pockets long.”

Reports from coin-collecting businesses are mixed. At Capitol Coin & Stamp, customers have shown little interest in the presidential coins, said Nelson Whitman, owner of the D.C. store.

Price is part of the problem, he said.

“There was more interest in the special quarters,” Mr. Whitman said. “Because these are dollars, they are more expensive, especially for collecting.”

The quarters also circulated better; $1 coins, on the other hand, are not often kept in the registers of retailers and other businesses, Mr. Whitman said.

Mr. McMahon suggests a simple formula for wide use of the coins: If the coins must be carried, they will be used. For that to happen, retailers and other businesses must be receptive to using the coins in transactions.

At Coins of the Realm Inc. in Rockville, owner Peter Boyer said demand for the $1 coins has been steady.

The demand, though, is not nearly as strong as that for the state quarters, which he said were “the best thing to happen to the coin business in a long time.”

The dollar coins have not seemed to circulate well, despite their publicity, Mr. Boyer said.

“The sheer weight is a problem,” he said. “It’s not an answer to replacing the dollar.”

The series format of the dollar coins, similar to that of the popular state quarters, will help drive interest, Mr. Moy said.

Collector boards for the 2007 coins in packs of five are available free of charge through the U.S. Mint’s Web site (www.usmint.gov). Boards for the others in the presidential series will be available as more coins are released.

“I think there’s a good chance [they’ll be used more],” Mr. McMahon said. “There will be a new one each year, and this is a 10-year program. I think it stands on reason.”



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