JOHANNESBURG – The five cent coin has not been in production since April last year, but even though it is still legal tender some retailers have jumped the gun and stopped accepting it all together. Production of the coin was halted because at the time there were a sufficient number of coins in circulation. This is disconcerting as increasingly, customers receive five cents coins from retailers in the form of change but they themselves cannot use them.
Hlengani Mathebula, head of group strategy and communications for the South Africa Reserve Bank says that the coin is still legal tender and that no one has the right to refuse it for payment.
But evidently this isn’t the case on the ground. This journalist questioned staff at a number of retail stores at Rosebank Mall; when asked whether they accepted five cent coins, all responded that they did not. One store went so far as to say that as they had been discontinued therefore they would not accept them. Similar experiences have happened at fast food retailers.
Mathebula says that the decision to halt the coin’s production was taken because there was an overabundance in circulation. As there are still enough in circulation, he says there’s no anticipation that there will be any shortages or need to bring them back into production.
This is unlike the fall of the one cent and two cent coins which were discontinued in 2002. Those coins became too expensive to produce: costing nine cents to produce a one cent coin and eleven cents to produce a two cent coin. Stopping the production of the copper five cent coin could also have been related to bringing down production costs. The metal content of the ten cent coin for example changed from bronze-plated steel to copper-plated steel as this would be cheaper.
South Africa is not the only country trying to bring down costs of producing coins. Bloomberg reported this week that the production of pennies and nickels cost US tax payers $436m. The cost of producing a nickel has doubled in the past ten years. The Royal Canadian mint stopped producing pennies because of the cost in 2012.
The fate of the humble five cent coin remains to be seen as retailers seem to be almost forcing consumers to desert it.