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Do you keep crisp bills and try to unload the crumpled one? You're not alone.
Money is money. Crisp new bills may look and feel nice, but they’re not worth a penny more than a similar bill that’s dirty and torn. And yet, when it comes to parting with that money, there is a difference.
According to a new study in the Journal of Consumer Research (“Money Isn’t Everything, but It Helps If It Doesn’t Looked Used”), people will spend more to get rid of worn out bills and hold on to new currency.
“The physical appearance of money can alter spending behavior,” write authors Fabrizio Di Muro (University of Winnipeg) and Theodore Noseworthy (University of Guelph and the University of Cincinnati). “Consumers tend to infer that worn bills are used and contaminated, whereas crisp bills give them a sense of pride in owning bills that can be spent around others.”
How do they know this? They gave students money – either new or worn bills – and asked them to go shopping. The subjects in these experiments tended to spend more when they had the worn bills. They were also more likely to break a larger bill that was old rather than pay the exact amount in new bills of lower denomination.
And get this: when students thought they were being watched, they reversed their behavior. They tended to spend the new bills before the old ones. Is this a matter of pride? Do we have some sort of emotional connect with our money?
“Money may be as much a vehicle for social utility as it is for economic utility,” the authors concluded. “We tend to regard currency as a means of consumption and not as a product itself, but money is actually subject to the same inferences and biases as the products it can buy.”
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Leave a Comment:
It's called Gresham's Law. Look it up.
It's called I dont care. Look that up! If this is news I am Superman-NOT!
My question is how many bills were spent on this worthless study?
I'm not sure that Gresham's Law really applies here. I think it'd be a real stretch, at least in domestic spending of US currency. The example given in a post below where a $50 bill was rejected because of an ink mark over the treasury seal would *maybe* be a more valid example IF it had not been rejected outright but rather exchanged at a lower rate - which isn't likely to ever happen.
If I recall correctly, Gresham's Law dealt with money that was inherently more valuable than other forms because of some intrinsic quality or money that had been somehow damaged or debased, or even counterfeit. Coins that were mostly gold or silver that had been shaved around the edges might not be accepted as readily as intact coins. Coins that had once been silver or gold but were replaced with lesser metals such as zinc cause this to happen. The old ones are considered to be more valuable because of their high precious metal content, even though they still exchange at face value regardless of age.
A dollar bill is a dollar bill, new, old, or whatever. They all spend the same, unless you've got a vending machine that won't take it or it's so mucked up that a human cashier doesn't want to touch it...
i always keep the pre 1988 and earlier bills ,they look way better and look like real money compared to todays ugly money ,the new bills look like"MONOPOLY MONEY" the 1920's thru 50's looks the best especially silver and gold notes
It's not just currency. It's everything. We are trained to "rotate" stock. Always use the oldest first, because it expires first. Even though currency doesn't usually expire, our conditioning causes us to "best when used by..." for everything. Newer/fresher lasts longer. So, always use the oldest first.
It's kind of Greshams law. The bills are equal in value where with Greshams law the two currencies are usually not.
New bills have that nice inky smell.
new bills work much better in vending machines... I'll admit that I use worn out one dollar bills and try to keep a couple good ones on hand in case I decide I need a soda or snack at work.
Handing someone crispy bills makes me feel better about myself. Handing them shoddy bills makes me feel trashy...so I get rid of them whenever I can.
inmissouri: I sometimes catch the bus to get home. Crispy bills also feed much better into the fare machine on the bus. If you take too long to get your fare in, the person behind you (if they have a bus pass) will step around you and you may get stuck with a junky seat (sideways, next to a leaner) or no seat.
... and coins feed even better. Every other industrialized country replaced its low-denomination bills with coins years ago. The US could save hundreds of millions every year if we used all of those $1 coins sitting in vaults along with having new-design $2 bills, but Congress is too timid and Crane Paper has too many lobbyists.
@ Dan Webster But, your pants would keep falling off. And, with prices as high as they are, you'd need a wheeled cart, to transport the coinage, for one days purchases.
uncle- how many ones do you usually carry around? I never have more than 10 on me, usually less than 5.
I will say- we'll see a lot more workers comp cases from strippers if we swap dollars to coins instead of paper!
And Uncle, I did say "use ... $2 bills" You'd never have to carry more than one or two $1 coins. Plus in any case that $1 coin (8 gm) would replace 4 quarters (23 gm) in a lot of machines so you'd actually be carrying less weight most of the time.
inMO - yeah, that's one of the downsides. I'm trying to think of a convenient place to put the coins, winkwink.
"We spend grubby bills and keep the crisp ones" --- Duh!
My thought exactly!
Some years back I knew an individual who got a kick out of placing some currency in a Ziploc sandwich bag before hitting the mall. Upon making a small purchase, this joker would slip on surgical gloves and use a pair of tweezers to carefully hand the bills over to the cashier (almost always a teenage girl or young woman) one at at a time while asking, "Did you know that over half the US currency carries an infectious disease?".
Apparently this was thought to be funny, and the more the cashier cringed, the more humorous it was. I always wondered how funny they'd think it was when they were finally charged with disorderly conduct for doing this, but I don't know that it ever got that far.
I travel all over the world, and many countries will only accept new bills. So I spend the grubby ones in the US and save the 'new' ones for travel.
Agreed. I had a $50 rejected at Narita Airport (Tokyo). It was a crisp new one, but on the currency exchange's inspection someone had ticked a black magic marker over the treasury seal. Reject. That was the only money I had. Fortunately, my credit card was accepted.
The physical appearance of the woman I'm with will alter my spending behavior!
Good one (and so sad for those of us who ain't so good-lookin'!)
Its nice to have my lunacy validated.
New women have that nice inky smell.
Only the gold diggers..........
@ commentaryme. Check to see if she has been altered. She could be of lesser value. Just like gold currency.
what is also true, but the study fails to show, is those who are smarter have been using this strategy so their wallet doesnt stink from old bills probably used by some homeless dude to wipe his ass before he spent it for a $1 menu at McD. personally i'd stick with ben franklin in my wallet and use credit card for everything else so i never have to touch those.
Are you kidding me... I spend everything... then hit the ATM... this is foolishness.
Personally I don't find I spend any different with the old or new bills. Though I do tend to get rid of older or the less crisp bills since they don't fold or stack as neatly in a wallet or clip or work in a vending machine when the need comes up.
Otherwise we need to end the nonsense and either switch to a $1 coin and eliminate the $1 bill or make it out of a better material for that bill alone that lasts longer, since it is usually 1's that get in the worst shape, maybe add in 5's as well but IMO first option of coin is better route. Solves alot of problems including saving the country some money on printing. While on the currency topic, pennies need to be KO'd as well, even more so that the $ issue.
It is time
I agree. It is time for the US Treasury to quit printing one-dollar bills and get the one-dollar coins into circulation. Maybe Treasury needs approval from Congress; if so Congress should approve by the end of this year. Canada does OK without the one (and two) dollar bills. Europe getsby without a one-euro bill.
It IS time.
The EU uses €2 coins too. Australia, New Zealand, the UK, and a bunch of other countries have done the same but we're still hanging on to our favorite $1 bills.
Of course those other places also went metric decades ago and have national health insurance too, but we can't possibly adopt such horrible marxist policies, right?
@ It is time. If you get rid of pennies, the price structure of everything will fall apart. Vendors will start rounding up, and claim they rounded down. And pocket the difference. Plastic is the only way to go, but people don't want "Big Brother," watching too close. Cash is the basic tool of illegal activity.
Dan - yup very terrible huh? Glad you mention both, I agree with both, but I go with the metric point. Time to join the club and catch up with the times like everyone else. What, one of 3 nations left that don't formally use metric?? We attempted the switch in the 80's and failed for basically nonsense reasons. We are more or less half way there now and need to finish the job. So much easier to use. Had we stayed the course the switch would be done in place for years now. But those same reasons and nonsensical stubbornness to change and see long term are the same reasons that have hampered us for sometime as of late. Can't solve simple problems and no way to even tackle or take on big problems or make the next big step anymore. Didn't used to be that way, but seems many have forgotten or just want to say can't do it or it will be to hard. Sad but don't get me wrong I think there is still hope.
Uncle - I think there will be some adjustments but we will survive. We have the ability to do so and in most cases with electronic point of sale the register can be programmed and if needed certified by a state's weights and measure's to ensure it is rounding up and down like it needs to. That mainly being for large retailers. Otherwise your talking a few pennies at the end of a transaction, not each item, so not exactly a bank breaker. Need the rounding for large retailers like Wal-Mart because that would add up for millions of transactions but small guys not really. Obviously you could still use them but they have outlived their usefulness and just need to stop making them and mandate the rounding options. Pissing away money we don't have to make something that cost more than its face value is stupid and since $.01 is not have the value like it did way back, very few things can be gotten for less than a nickel, just doesn't make sense. I will add that the rounded just needs to be applied to taxes not the retailers bottom line anyways. Again I know there will be some change (no pun intended) and adjustment time, which won't be tough, other than that I've never heard of a true reasonable issue to avoid getting rid of pennies.
So it would behoove a venue (theaters, arenas, etc) to give out old bills as change so people will spend more inside.
ooohhhh...that's a very good idea.
I found a 1977 series $5 bill. I'm keeping that.
It's interesting, a penny is worth more sold for scrap.
make sure it is a 1981 or older penny, when they were all copper, not the zn-cu pennies we have now.
Right...remember when coins used to make a nice jingling sound? Now they just sound flat and dead.
I wouldn't doudt it a bit if they are made in China.
Alan - in spite of its age your bill is only worth 5 bucks unless it's uncirculated. Even most fives from the 1950s retail at under $10 on the collectors' market.
Midnight - nope, circulating coins are still made in Philly and Denver. They just look like they were made in China :)
Would I spend my grubby bills first? Of course. But because I use public transportation, I always keep a few 1s on hand. So if I made a 3 dollar pucrhase and had 3 grubby 1 dollar bills and a crisp 20 dollar bill, I would break the 20.
I am happy they thought of that enough to do this study in this day and age - Who uses paper anymore? I only spend more when there is a minimum purchase on my credit card!
DUH!!! Personally, I like to keep the newer bills with me as they can be used much easier in machines that take bills. Have you ever tried using an old, worn out, wrinkled, taped, or torn bill in a vending machine or other machine that takes bills?
All I know is that I save up my singles (grubby or crisp) for stripper night at the local club. They don't care what it looks like when you're tucking it into their G-string.
All you germaphobes out there explain why the super-killer bugs are winning! Rub those bills from the homeless person on your face and get some normal exposure!
Our paper money is not taken out of circulation fast enough when it gets old. I know the Treasury Department complains about the cost of printing replacement dollar bills. It's quite high and they constantly promote the dollar coin, but I've also seen terrible looking fives, tens and twenties. They are dirty, mangled, used as a notepad and sometimes held together with adhesive tape.
In my travels to other developed countries, I've never seen their paper currency in such bad shape. In Japan the money you get from an ATM is actually pressed to improve its crispness.
Actually the Treasury caved in to the naysayers and Crane Paper's lobbyists. The $1 coin isn't being promoted even though its use would save the country hundreds of millions of dollars every year. Every country that successfully transitioned to $1 (and $2) coins stopped printing the equivalent bills. For ex. in Canada some people fussed over losing their version of the "greenback" but after a few months they saw how convenient the new coins were. The "Loonie"'s now a source of national pride, esp. because they were able to adapt while the US can't let go of its old bills.
Dan, you do know why the Canadians were first embarrassed about the $2 coin? Because of the Queen on front and the bear behind. :D
Dan: Last I checked though, Canada doesn't have any problem at all taking that US 1 dollar bill. None at all.
Tom - good one! :) :) :)
On a recent trip to Vietnam I was given a higher exchange rate for my newer $100.OO bills. I had an older one that I could not get rid of, not even for $#%^ services.
My brother used to iron his paper money.
Sounds like Scrooge McDuck, LOL!
Marc ... ironing money is nothing ... my brother launders money ...
Pontifex: So does Obama. He gives his supporters like Solyndra, and dozens of others, huge financial gifts thanks to the US tax payer, and then those same companies sent a nice little chunk of that money back to Obama or Obama supporting pacs to help his campaign coffers...then shut their doors, fire everyone and never have to worry about paying back those funds to the taxpayers. How convenient.
I bet your brother is envious of the racket Obama's got.
Well, Marc, I used to know a guy who always had crisp $100 bills in his wallet. Of course, he printed them himself every day...
In addition, the Treasury has, within the past few years, replace the crisp paper they used to use with a floppier, more ragged paper that doesn't hold a fold and becomes unraveled if you keep bills folded together in your pocket. Wish they'd go back to the older paper -- it was more durable and made bills last much longer.
Do you have a source? According to the BEP there hasn't been any modification.
I just want to know how much of that grubby money was spent on such a stupid study?
Who cares????
Get a job!!!!!!!!!!
Quit hiding money in offshore accounts, open a a new business and hire some people at a fair wage with benefits. I'll bet that offshore cash is nice a crisp isn't it?
NO MORE REPUBLICAN CRIME FAMILY...REAL AMERICANS HAVE SPOKEN !!!
Leave it to the right wing to make this an us-versus-them story. Sorry Noooo, but in spite of being a "D" I already have a job where I work $#$% hard.
...and this is news to anyone? :)
I spend the crummy bills first, because the old worn-out bills won't work in vending machines, parking meters, etc.
This is not a mystery.
A few years ago the city where I live upgraded its parking meters and kiosks to take $1 coins. No need to fuss with wrinkly bills anymore.