Like a lot of folks, I don’t like carrying around change and whenever I get the chance it gets deposited into a jar on my desk. Coinstar has somehow created a publicly-traded corporation (ticker CSTR) worth over 1 billion dollars based on converting these coins back into… cash? (Okay, they now also own Redbox.) I still don’t get it. Occasionally, Coinstar has a promotion that gets you a little bonus, but other than that I really don’t see why people choose to pay a 9.8% fee to get their own cash handed back to them.
[Update: A lot of people point out that you can convert to several gift certificate options with no fee. This is true, and can definitely be a better option if you shop at those stores. But you lose the ability to get credit card rewards on your purchases, which can be up to 5% on certain places like grocery stores. In addition, at several places like Starbucks I can buy gift cards for 80 cents on the dollar at places like Costco ($40 for $50 gift card). Even for the most popular Amazon.com, I can get 5x rewards back by buying things with my Citi Forward Card.]
Every single bank that I’ve asked accepts coins as deposits to a checking account. Seems like that would be a law or something. Bank of America, regional banks, and local credit unions. Some used to request that you roll them, but within the last five years they’ve all just accepted them loose. They simply place them along with a blank deposit slip into a plastic cash bag, seal it, and send it off to a central coin-counting place. Within a couple of business days, a deposit shows up in my account.
I suppose you might worry that they’ll steal some of your coins, whether through the human operator or the counting machines. However, even if you go to a place like Coinstar, the counter might also be off as well. The Wall Street Journal even investigated the accuracy of Coinstar machines and found them both off.
For consistency, we began with equal piles of $87.26 worth of pennies, nickels, dimes and quarters that we had gotten from a local bank in coin envelopes. Talk about a tough economy. The machines at both Commerce Bank and Coinstar gave us less back than we put in — Commerce Bank missed by a whopping $7.02, while Coinstar was off by 57 cents.
Alarmed at the results, we decided to give the machines a second chance. This time, we painstakingly counted out two batches of $68.23 in change. But once again, both Commerce Bank (82 cents) and Coinstar (14 cents) were off — in the machine’s favor.
Of course, that $7.02 miscount was still less than the new 9.8% fee of Coinstar (as of March 1st). Perhaps the Commerce Bank counters open to the public aren’t maintained very well.
If you’d like to estimate the amount in your coin jar without counting, try this Coin Jar Calculator. You simply grab a handful of coins, input the breakdown along with the weight of the coins, and out pops an estimate of your jar’s value. I would say it’s only accurate to maybe 10-15%. For me, it estimated $86.73 based on a large handful, with an actual result of $94.07.
Looking for something more scientific? Check out this little dissertation. With some basic assumptions, the author figures mixed loose coins should be worth about $12.96 a pound. My jar worked out to closer to $11 a pound. I do occasionally fish out quarters for parking meters though, so that likely skewed my results.
How do you deal with your loose coinage? Share in the comments.