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Where Do Broken Coins Go? (Some Find Their Way “Home”)

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Is this Jefferson Nickel too corroded to spend as money? Maybe… But that’s what the U.S. Mint Mutilated Coin Redemption Program was invented for. Courtesy of Joshua McMorrow-Hernandez. Click image to enlarge.

I’ll give you one point if you can already reel off before reading this article where damaged United States coins could be sent for redemption and two points if you get the Whitney Houston reference ensconced in the title of this article! The topic of what happens to coins that are no longer useful for circulation had been on my mind for a long time after I began my coin collecting journey many years ago. As it turns out, broken coins – those that are too worn, damaged, or otherwise unfit for circulation – really could go back “home.” The United States Mint, that is…

The U.S. Mint Mutilated Coin Redemption Program was founded many decades ago to redeem coins that had been altered, corroded, or otherwise damaged beyond practical use in commerce at a rate commensurate with and proportional to the coin’s value as scrap metal. Of course, while this program did not attract many pre-1965 junk silver coins as of late, it surely did invite many individuals and businesses to send in zinc-based Lincoln Cents, copper-nickel clad coinage, and other base-metal coinage that had become too unsightly or damaged to spend as regular money.

The guidelines of the program have been quite simple. The U.S. Mint’s rules for redemption are stated as the following: “Coins submitted for exchange must be clean, free of debris, free of residual substance(s) on the surface, and identifiable as United States coins.” Also, the U.S. Mint stipulates that it “reserves the right to reject any submission that does not conform to these guidelines or contains any contaminant. Past material acceptance does not guarantee future acceptance.”

And the concept of “future acceptance” is something on the minds of many individuals and businessowners who used the U.S. Mint Mutilated Coin Redemption Program for years. You see, after reported abuses by some companies that were sending counterfeit damaged coins, the U.S. Mint suspended the program until it could refine its acceptance process – much to the dismay of legitimate scrap recycling firms that were sending in huge batches of damaged coins that were no longer acceptable for use in commerce.

The Institute of Scrap Recycling Industries, Inc., petitioned on behalf of the many recyclers affected by the halt of the Mint’s long-running program and met with Mint officials to educate them on how scrap recyclers accumulate the vast number of coins that they do. For example, many damaged coins are found in the floorboards and other hard-to-access parts of abandoned cars. Collectively, recycling companies were sending in millions of dollars in scrap-worthy coinage each year. So, the suspension of the U.S. Mint Mutilated Coin Redemption Program represents a huge loss to many businesses in that industry. This isn’t even counting the many individuals and other companies that were turning in smaller amounts of damaged coins no less representing significant sums of potential value as scrap metal.

Meanwhile, the powers that be at the United States Mint are working to find solutions that may allow the Mutilated Coin Redemption Program to resume while mitigating risks of accepting and processing counterfeit coins. As we wait and see how this discernment process unfolds with the U.S. Mint and when – or if – the Mutilated Coin Redemption Program resumes, it’s probably best just to hold onto those damaged coins until they can be safely returned “home.”

Sources

Circulation Finds