It is known that the United States Mint produced over nine billion coins (excluding the $1.00 coin) from Jan. 1, 2009 to Dec. 31, 2010. However, most consumers who still prefer to use cash do not carry coins with them, and instead will pay for purchases with paper currency. These consumers receive the change in coins. A majority of these coins are then accumulated in vehicles or at home, for example, in a change jar. Eventually the consumers will cash in the coins, often paying a fee to do so, or the coins go out-of-circulation.
The total value of the coins that are out-of-circulation at any given time is unknown, but the estimates are in the tens of millions of dollars. Many of the solutions that have been documented to account for the large number of out-of-circulation coins involve banking institutions, clearing houses, and the transmittal of data back and forth, and the related accounting procedures. These systems are all too complex and costly, especially when considering that the transaction amount could be one penny. One of the other disadvantages is the requirement for consumers to be identified by a storage card or device, further exposing them to identity theft or electronic fraud.
The use of fractional dollar value coins in a monetary system is inefficient, an unnecessary use of natural resources, detrimental to the environment, and a natural conduit for germs and diseases. Many attempts have been made to solve the coin problem but all have come up short; as evidenced by the continued use of coins having fractional dollar, or other currency, values.
A known system and method for conducting coinless transactions is described in U.S. Pat. No. 5,869,826 to Eleftheriou. The system of Eleftheriou uses a magnetic stripe data card to store a value of change with a maximum value of 0.99 of a whole dollar. The system either increases or decreases the value of the storage device depending on the fractional amount of the transaction and the current value of the storage device. The Eleftheriou method undesirably causes the merchants to experience unpredictable imbalances in their cash drawers. The amount of the imbalance will depend on the quantity and value of the coinless transactions, but is inevitable. The method of Eleftheriou also gives no consideration to the accounting of the change that is processed, and the merchant has no way of balancing their cash drawer.
There is a continuing need for a method and system that addresses the problems of the prior art by tracking a preset fee per transaction and a resettable cash balance, and setting parameters to control the direction of the credits and debits. Desirably, the method and system allows the merchant to balance their cash drawer and, barring any human error, the cash balance will exactly match the amount in the cash drawer when it is reconciled.