Final report

4.4  
RECENT EXAMPLES OF NEW COIN INTRODUCTIONS IN OTHER 
COUNTRIES 
Major changes to the materials of construction and/or to the size of coins are a common practice 
in the circulating coins throughout the world.  Although no “rule” as such exists, according to 
technical experts at two major coin-processing equipment manufacturers, other countries 
routinely make significant changes to the materials of construction and/or size of their circulating 
coins approximately every 20 to 25 years.  Inflation is often the principal driver for making the 
change when the total cost to produce incumbent coins approaches or exceeds the coin’s face 
value.  Three such recent examples are discussed here.  In all three cases, the current project 
team interviewed individuals who were directly involved with planning for and implementing the 
new coins into circulation into their respective countries.  Although not specifically called out in 
this report, the lessons learned from these individuals were incorporated into the execution of the 
project and the resulting knowledge is implicit in much of the discussion that follows. 
84 
More advanced acceptance software uses neural network or fuzzy logic technology to define the acceptance 
conditions, which are more complex in shape than those defined here.  However, in principle, they operate in much 
the same way as that described here:  when the various sensor values are collectively within acceptable domains, the 
coin is considered valid and the corresponding coin value is credited. 
192  

Recent material changes in the construction of Canadian circulating coins were made by the 
Royal Canadian Mint (RCM).  Plated-steel one- and two-dollar Canadian coins were placed into 
circulation in early 2012 [3].  New Canadian one- and two-dollar coins have the same 
dimensions as their incumbent counterparts, but the new coins have lower weight due to the 
lower density of the new materials of construction.  The public announcement came 
approximately 10 months in advance of the RCM releasing the new coins into circulation.  It is 
not clear when the stakeholders were given coin samples to use for upgrading their equipment. 
Her Majesty’s (HM) Treasury (of the United Kingdom [UK]) selected a plated-steel composition 
and updated the dimensions for the new UK 5-pence and 10-pence coins entering circulation in 
2012 [4].  The Royal Mint (RM) took a different approach to the construction of their new coins 
than did the RCM.  The RM kept the weights and diameters of the new coins the same as the 
corresponding incumbent coins.  This necessitated an increase in the thickness of the new 5­
pence and 10-pence coins, since the new materials of construction are of lower density than the 
incumbent cupronickel composition previously used for these coins.  Approximately 12 months 
was allotted by the RM between announcing their intention to and then releasing 5-pence and 10­
pence coins of new construction.  Stakeholders were expected to prepare themselves for the new 
coins during that time period. 
Finally, in mid-2006 the Reserve Bank of New Zealand (RBNZ) introduced new circulating 
coins having both different metallic materials of construction and smaller dimensions (diameter 
and thickness).
85 
This required a significant upgrade to the coin-processing equipment 
throughout New Zealand.  A well-coordinated public relations effort was conducted by the 
RBNZ to garner public and commercial support for the change in coinage.  Few details have 
been posted about the conversion costs required of New Zealand to complete this coinage 
update.
86 
However, the coin-processing infrastructure was able to successfully upgrade their 
equipment to accept and process the new coins.  The RBNZ provided stakeholders with sample 
coins six months in advance of releasing these coins into circulation.  During this time 
stakeholders were expected to upgrade their coin-processing equipment in preparation for release 
of the new circulating coins. 
4.5 
DISCUSSIONS WITH STAKEHOLDERS 
Information aggregated from the many sources from which the information was gathered 
resulted in some data inconsistencies.
87 
While most of the data differences were resolved by 
looking deeper into the factors that make up the various values presented by any given source of 
information, other inconsistencies were not able to be resolved to a single clear and certain value.  
85 
The incumbent coins in circulation in New Zealand prior to the release of the new coins were considered to be too 
large and cumbersome based upon standards defined in The WVA Coin Design Handbook [5].  After introducing 
the new coins into circulation, the incumbent coins were quickly withdrawn from circulation since the New Zealand 
government declared that three months after introduction of the new coins, merchants were no longer required to 
accept the incumbent coins for payment. 
86 
It is also worthy of note that the incumbent coinage of New Zealand was similar to that of neighboring Australia 
and a few other countries in the southern hemisphere [6].  Foreign coins were frequently confused with the 
incumbent New Zealand coins, which was further motivation for the 2006 change in coinage dimensions and 
materials of construction. 
87 
For example, the size of the vending industry in the US for 2010 was estimated by various sources to be between 
$19.25B and $60B.  Other data conflicts from vending and other stakeholders were also observed. 
193  

Data inconsistencies are explained below, when the basis for such inconsistencies was known.  
The references consulted by CTC, in its best judgment, to be most reliable were used as the basis 
for calculating the conversion costs or other impact estimates defined below.  When uncertainty 
remained in any of the values used to define the magnitude of these impacts, a range of outcomes 
was computed.  Although no precise definition of “most reliable” can be given, published 
information from trade groups was considered more reliable than comments made by individuals 
during one-on-one or group discussions.  In addition, information from organizations with a 
dominant share of any given market (especially when the spokesperson was perceived by CTC to 
have a broad understanding of the many issues involved) was considered to have a high degree 
of reliability since the dominant members of any stakeholder group typically would have to 
endure the greatest magnitude of any impact to the stakeholder group. 
Discussions with several coin-processing equipment manufacturers indicated that these devices 
have continued to evolve over the past 20 years, which is beyond the normal lifetime of the 
majority of these devices.  Fielded coin acceptors used in the vending industry, for example, can 
be reasonably well characterized by a few generations of technology implementation; however, 
the methods of validating coins by other stakeholder groups varies widely, making the job of 
computing the associated impacts relatively more challenging, especially given the limited 
amount of public data available to define the number and types of equipment used by these 
stakeholders. 
To simplify the analyses completed for the present study, several assumptions were made based 
upon the approximate dates that several technologies were commonly available and incorporated 
into coin-processing equipment.  In general, older-generation devices rely on technology that is 
more costly to upgrade.  Based upon feedback from several coin-acceptance equipment 
manufacturers, the method of computing the conversion costs to the vending and laundromat 
stakeholders (the two groups who would be most significantly impacted by a change to the 
metallic construction and/or size of coins) is conservative in the sense that the below computed 
values are likely to overestimate the actual conversion costs that would be required from each 
stakeholder group to correctly process alternative material coins that are non-seamless (i.e., those 
having characteristics and/or properties that lie outside of current acceptance windows of the 
coin-processing equipment). 
In the present analysis all coin acceptors manufactured before 2001 are assumed to be replaced 
with new units when any measured coin characteristic and/or property validated by the acceptor 
differs between the incumbent and alternative material candidates.  For example, if a coin 
validator manufactured prior to 2001 uses EMS to validate coins and the EMS of an alternative 
material candidate differs from that of the incumbent coin, then a new coin acceptor was 
assumed to be required. 
Many vending and laundromat active coin acceptors sold between approximately 2001 and 2006 
can be reprogrammed on site by placing the unit into teach mode and introducing sample coins to 
train the unit to recognize new coins or tokens.  Other active coin-acceptor units constructed 
during this time period require that the coin mechanisms be returned to a service center to have 
updated software uploaded so that non-seamless coins can be correctly validated and processed.  
The costs to upgrade devices of either of these designs are approximately the same. 
194  

Many active coin acceptors manufactured after 2006 can be upgraded by simply uploading 
software directly to the coin acceptors where they reside.  Software uploads are typically 
completed through use of a small, portable, dedicated computer device with a universal serial bus 
(USB) port.  Today’s most advanced units allow software uploads directly by wireless Internet; 
in other instances, upgraded software can be e-mailed to the machine owners who can then 
upload the software upgrades to their units.  The number of units that are wirelessly connected to 
the Internet or that accept software upgrades through e-mail delivery are small in number (i.e., 
less than 1 percent [%] of fielded units in the US).
88 
From the analyses completed for this evaluation, it is clear that the vending and laundromat 
industries would be significantly impacted by introduction of non-seamless US circulating coins.  
Other industries would also be impacted, depending upon the specific coin characteristics and/or 
properties that are changed.  These other industries do not appear to be as well represented by 
industry trade groups as the vending and laundromat stakeholders.  Therefore, gathering 
information about the impact of changes to coins for these other stakeholders was more difficult 
and fragmented.  As with the vending and laundromat stakeholders, input from individual 
contributors during the one-on-one interviews is not referenced to maintain the confidentiality of 
data that many contributors considered to be business sensitive. 
In the analyses that follow, three levels of costs were computed for each stakeholder group. 
x  Low- and high-cost values are computed based upon the extreme conditions uncovered 
by the information gathering efforts defined above. 
x  The third level of cost computed was a most-probable cost, which was based upon CTC’s 
best judgment of the actual conversion costs to upgrade equipment. 
The most-probable costs are used elsewhere in the report when discussing total conversion costs 
for the candidate materials. 
4.5.1  Vending Machine Owner s and Oper ator s 
Historically, the vending stakeholder group has garnered a significant amount of attention 
throughout the world by mints and government financial ministries contemplating alternative 
material coin construction.  See Appendix 4-C for detailed background data on the vending 
machine owners and operators.  Of the stakeholder groups considered for this study, the vending 
industry has the largest number of potential machines (5.3M [7]) impacted and the largest 
number of individual sites where impacted machines reside.  Both of these factors greatly impact 
the conversion costs to upgrade coin-acceptance equipment throughout the vending industry to 
accommodate any changes to circulating coins. 
Based upon observations from the coin-acceptor manufacturers and those who operate service 
centers for vending machines coin acceptors, an unknown number of vending machine owners 
and operators will choose to upgrade (rather than replace) units manufactured prior to 2001 at a 
lower conversion cost than that required for a new coin acceptor.  Furthermore, the experience of 
88 
The coin-processing equipment manufacturers interviewed during this study were unable to provide the exact 
number of fielded units that would accept software uploads from wireless methods or that allow for owner upload of 
software delivered by e-mail.  These manufacturers did, however, indicate that such options result in the lowest-cost 
software upload available within the coin-processing market.  For this report, these units were included in the post­
2006 coin-acceptor totals. 
195  

the coin-acceptor manufacturers and service center operators indicate that an unknown fraction 
of vending machine operators will choose to wait up to four or more years (beyond the release 
date of alternative coins) before they update their coin acceptors, perhaps until the current 
devices can no longer be economically repaired.  Others will simply choose to reject non-
seamless coins until vend sales drop to an unacceptable level as a result of sales lost from not 
accepting any non-seamless coins.  Still others will likely hold off upgrades until the devices 
need other forms of maintenance or repairs for which funds have already been allocated.  Since 
CTC did not have a defensible method to define how many vending machine owners and 
operators will delay purchasing new coin acceptors or delay making upgrades to their current 
equipment, 100% of those fielded units manufactured prior to 2001 were assumed to be replaced 
in the below calculations for non-seamless coins.  Therefore, the magnitude of the computed 
conversion costs described in this report is expected to be larger than what would actually be 
spent by the vending machine owners and operators should alternative material non-seamless 
coins be introduced into circulation. 
Should any commonly accepted vending machine coin (i.e., 5-cent, dime, quarter dollar or dollar 
coin) change dimensions, hardware changes would be required for the vast majority of vending 
machines (exact values are discussed in Appendix 4-C).  Changes to coin weight are assumed to 
impact only the passive coin acceptors since the active coin acceptors used in the vending 
industry rarely, if ever, use weight to validate coins.  To be conservative (i.e., estimate on the 
high side of conversion costs), 100% of the passive coin acceptors in vending machines are 
assumed to be replaced with modern active units when weight is the only characteristic that 
changes in alternative material coins.
89 
Changes to the EMS of circulating coins would impact 
virtually 100% of all active coin acceptors that accept the associated coins.  The cost analysis 
assumed that 100% of affected coin acceptors would be upgraded or replaced if the EMS of 
coins were changed. 
4.5.1.1  Large Vending Machine Owners and Operators 
Table 4-2 summarizes the conversion costs required of large vending machine owners and 
operators to accommodate changes to US circulating coins, assuming 100% of the impacted coin 
acceptors are upgraded (or replaced if older than 10 years).  Impacts from alternative materials 
having an EMS that differs from incumbent US circulating coins, as well as impacts due to 
changes to coin dimensions (defined to be diameter changes greater than 1% of current values 
and/or thickness changes of more than 3% of current values) are shown.  To be conservative (i.e., 
estimate on the high side of calculated values), 100% of the passive coin acceptors in vending 
machines are assumed to be replaced with modern active units when weight differences greater 
than 3% exists in new coins. 
89 
The actual number of vending machine passive units that rely upon weight is thought to be (however, no specific 
data were found to support or refute the conclusion that) for less than the majority of those units currently in 
operation. 
196  

Table 4-2. 
Conversion Costs ($M) for Large Vending Machine Owners and Operators 
Coin 
Characteristic 
Changed 
One-Cent 
Coin 
5-Cent Coin 
Dime Coin 
Quarter 
Dollar Coin 
Half 
Dollar 
Coin 
Dollar Coin 
Immediate Out-of-Pocket Expense in Fall 2014 
Diameter 
None 
660.8–1035.5 
660.8–1035.5 
668.0–1046.9 
None 
587.8–911.2 
Thickness 
None 
660.8–1035.5 
660.8–1035.5 
668.0–1046.9 
None 
587.8–911.2 
Weight 
None 
9.3–14.5 
9.3–14.5 
9.4–14.7 
None 
8.3–12.9 
EMS 
None 
111.8–177.1 
111.8–177.1 
113.0–179.1 
None 
99.4–157.6 
Final Cost Impact at 20% Corporate Tax Rate 
Diameter 
None 
528.6–828.4 
528.6–828.4 
534.4–837.5 
None 
470.3–737.0 
Thickness 
None 
528.6–828.4 
528.6–828.4 
534.4–837.5 
None 
470.3–737.0 
Weight 
None 
7.4–11.6 
7.4–11.6 
7.5–11.8 
None 
6.6–10.4 
EMS 
None 
89.4–141.7 
89.4–141.7 
90.4–143.3 
None 
79.5–126.1 
Changes to coin characteristics are defined as follows (relative to incumbent US circulating coins):  diameter > 1%, 
thickness > 3% and weight > 3%.  EMS is more complex and requires a detailed analysis from each coin-acceptor 
manufacturer to define when changes are required for their equipment. 
Two other factors are considered in computing the conversion costs provided in Table 4-2.  First, 
US coins of alternative material construction were assumed by CTC to be released into 
circulation in the Fall of 2014.
90 
Many coin acceptors manufactured prior to 2001 are expected 
to be replaced not long after the Fall of 2011 (when the coin-acceptor information discussed in 
Appendices 4-B and 4-C was gathered from the vending industry) due to natural attrition of this 
older equipment.  An assumption was made that 20% of fielded coin acceptors manufactured 
prior to 2001 are replaced annually with units that can be upgraded by a software upload.  All 
coin acceptors manufactured after 2001 were assumed to remain in service through the Fall of 
2014.  A second factor considered in the results shown in Table 4-2 is the net effect of corporate 
tax.  Since the replacement and/or upgrade costs are a business expense, these costs would 
reduce net profits resulting in less corporate taxes being paid.  This would reduce the net 
effective conversion costs to the industry.  Given that federal corporate taxes are between 15% 
and 35% [8], state corporate taxes are between 0% and 10% and that some cities charge up to 9% 
corporate tax, the assumption was made that the average total corporate tax is 20%, meaning that 
the industry net effective conversion costs are only 80% of the immediate out-of-pocket 
expenses.  Conversion costs that reflect corporate tax effects are also shown in Table 4-2 for 
large vending machine owners and operators. 
4.5.1.2  Small Vending Machine Owners and Operators 
Table 4-3 summarizes the conversion costs to small vending machine owners and operators 
resulting from changes to US circulating coins.  Impacts from alternative materials having an 
EMS that differs from incumbent US circulating coins, as well as impacts due to changes to coin 
dimensions (as an engineering estimate, defined to be diameter changes greater than 1% of 
current values and/or thickness changes of more than 3% of current values) are shown.  To be 
conservative (i.e., estimate on the high side of calculated values), 100% of the passive coin 
acceptors in vending machines are assumed to be replaced with modern active units when a 
90 
The Fall of 2014 was selected as a potential time when alternative material coins will be introduced into 
circulation based upon assumed further development of coinage materials and production readiness evaluations at 
the United States Mint.  The actual date of introducing new coins, if any are to be introduced at all, has not been 
announced by the United States Mint. 
197  

weight difference greater than 3% exists in any proposed coinage material.  Projections to the 
Fall of 2014 were made and a lower effective conversion costs due to corporate taxes at 20% are 
also summarized in Table 4-3. 
Table 4-3. 
Conversion Costs ($M) for Small Vending Machine Owners and Operators 
Coin 
Characteristic 
Changed 
One-Cent 
Coin 
5-Cent Coin 
Dime Coin 
Quarter 
Dollar Coin 
Half 
Dollar 
Coin 
Dollar Coin 
Immediate Out-of-Pocket Expense in Fall 2014 
Diameter 
None 
121.8–191.4 
121.8–191.4 
123.2–193.5 
None 
108.4–170.3 
Thickness 
None 
121.8–191.4 
121.8–191.4 
123.2–193.5 
None 
108.4–170.3 
Weight 
None 
1.7–2.7 
1.7–2.7 
1.7–2.7 
None 
1.5–2.4 
EMS 
None 
28.5–37.7 
28.5–37.7 
28.8–38.1 
None 
25.3–33.5 
Final Cost Impact at 20% Corporate Tax Rate 
Diameter 
None 
97.4–153.1 
97.4–153.1 
98.6–154.8 
None 
86.8–136.2 
Thickness 
None 
97.4–153.1 
97.4–153.1 
98.6–154.8 
None 
86.8–136.2 
Weight 
None 
1.4–2.2 
1.4–2.2 
1.4–2.2 
None 
1.2–1.9 
EMS 
None 
22.8–30.2 
22.8–30.2 
23.0–30.5 
None 
20.2–26.8 
Changes to coin characteristics are defined as follows (relative to incumbent US circulating coins):  diameter > 1%, 
thickness > 3% and weight > 3%.  EMS is more complex and requires a detailed analysis from each coin-acceptor 
manufacturer to define when changes are required for their equipment. 
4.5.1.3  Additional Comments about Vending Machine Owners and Operators 
As a point of reference for the above vending machine upgrade costs, the projected cost was 
$40M to upgrade the 200,000 vending machines in Canada [3] to accept the newly introduced 
Canadian plated-steel one-dollar and two-dollar circulating coins.
91 
This is an average of $200 
per vending machine, which is of similar magnitude to the values defined here.  HM Treasury (of 
the UK) made a similar assessment [4] prior to authorizing the RM to develop and release in 
2012 new nickel-plated steel 5-pence and 10-pence circulating coins.
92 
HM Treasury determined 
that approximately 50% of the nation’s 1.0M machines impacted by the alternative material coin 
constructions would be vending machines.  Among the vending machines, 87% required a 
firmware upgrade costing £12 ($19
93
) each, 11% required a new mechanism costing £250 ($395) 
each and the final 2% of the vending machines required a software upgrade costing £15 ($24) 
each.  When service fees (i.e., labor) are added, HM Treasury’s best estimate of the total impact 
for all 1.0M machines was £80M ($126M), which is an average of £80 ($126) per machine.
94 
These conversion costs are also of similar magnitude to those discussed above for US vending 
machines.  In both cases, the new Canadian and the new UK coins are expected to co-circulate 
with incumbent coins. 
91 
The change to the plated-steel Canadian one-dollar and two-dollar coins is projected to save the RCM $16M 
annually [3].  
92 
The incumbent five-pence and ten-pence coins were of cupronickel composition (75% copper/25% nickel).  The 
change in the construction of these coins was projected to save the RM an estimated £7.5M ($11.8M) annually [4].
93 
The exchange rate was assumed to be 1.58 US dollars ($) per British pound (£) [9].  
94 
HM Treasury states, while most other automated machines would have a similar conversion cost to vending,  
parking meters in the UK are more expensive to upgrade than vending machines.  This is due to a higher rate (40%) 
of parking meters mechanisms needing to be replaced (a direct result of the new coins being approximately 10% 
thicker than their incumbent counterparts), a higher cost for firmware and software upgrades, and the higher labor  
cost associated with upgrades to parking meters [4].  Therefore, the $126 per machine conversion cost would appear 
to be a potentially high value for the United Kingdom’s 0.5M vending machines.  
198  

Changes to any one, two, three or all four of the most significant US circulating coins to the 
vending industry (5-cent, dime, quarter dollar and dollar coins) would all require approximately 
the same conversion costs to the vending industry.  To keep the industry from having to make 
multiple coin-acceptor upgrades (and repeatedly incur the associated costs to do so) over a period 
of years, changes planned for these coins should be made all at one time.  Although a second, 
third or fourth coin acceptor update would likely cost less than the numbers projected in Tables 
4-2 and 4-3, the costs would nonetheless be significant for an industry that had a pre-tax profit of 
only 1.0% to 2.0% in 2010 [7].  Therefore, if the United States Congress contemplates changing 
more than one of the incumbent 5-cent, dime, quarter dollar and/or dollar coins, then it would be 
in the best interest of the vending industry for the United States Mint to make all changes and to 
introduce each new coin into circulation at the same time or as an engineering judgment, within 
approximately a 2–4-month time period. 
Another factor that could lower the actual conversion costs (over those defined above) for 
vending machine owners and operators is associated with upgrades to units that could be 
completed during regularly scheduled and/or emergency maintenance to vending machines as 
opposed to the singular-focused, dedicated upgrade effort assumed in the above calculations.  
One industry expert estimated that coin acceptors owned by the large vending machine owners 
and operators receive service twice a year on average.  Another industry expert conservatively 
indicated that coin acceptors generally receive a minimum of four visits by trained maintenance 
staff during their lifetime.  Two of these visits would include the unit being brought to a service 
center, where the latest software would routinely be uploaded as a part of a standard service 
agreement.  Even with a 14-year average life span, slightly more than 1/3 of the coin acceptors 
are visited each year by trained maintenance personnel.  These individuals have the training to 
upgrade these units on site (if the units allow for on-site upgrades).  It is expected that many of 
the fielded units would be upgraded as part of these maintenance visits, thus affording the 
vending machine owners and operators an opportunity to leverage a service call to also upgrade 
software and/or hardware to accept the new alternative metallic coins. 
All key stakeholders and the general public are expected to be given ample advanced warning 
about the timing of introducing alternative material US circulating coins.  Even so, it is 
anticipated that many vending machine owners and operators will not upgrade their machines 
until after the new coins have been introduced into circulation.  Based upon the fact that US 
circulating coins are designed to be in circulation for 30 years, and based upon two analyses 
completed by CTC (see Appendix 4-D) to determine the total number of US coins currently in 
circulation, about 3% of the US circulating coin supply is replenished each year with newly 
minted coins.  At this replenishment rate, two years after introduction of an alternative material 
coin set, only about 6% of US coins would be of the alternative material coin construction, 
assuming that the incumbent coins are not withdrawn from circulation by either the United States 
Mint or hoarders.  It is speculated that many vending machine owners and operators would rely 
upon such low quantities of alternative material coins that they would delay upgrading their coin 
acceptors until either the machines required service for another purpose or they lost a sufficient 
number of vending sales. 
Changes to coin dimensions would have a very significant impact on the vending industry.  First, 
the coin-acceptor manufacturers would have to redesign their mechanisms to recognize the 
newly-dimensioned coins.  The industry has estimated that changes in coin dimensions would 
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require up to a two-year effort to complete and test new hardware after the new coin dimensions 
were defined.  Once coins of the final metallic composition and dimensions were available, 
another six to 12 months would be required to finish updating and testing software and other 
design features.  If the 5-cent, dime or quarter dollar coins changed diameter by more than about 
1% or if these coins changed thickness by more than a few percent,
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then essentially 100% of 
the coin mechanisms,
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which accept and process these coins, would have to be replaced.  This 
replacement would be required as a result of hardware (including tubes to store coins of a given 
denomination for customer change) needing to be altered to accommodate the dimensions of 
such new coins while still processing the incumbent coins. 
Additional conversion costs would be imposed on the vending industry if coins having new 
characteristics and/or properties (such as dimensions or EMS) were issued.  Very old vending 
machines that do not rely upon today’s industry standard of multi-drop bus (MDB) 
communication protocol would have to be modified with conversion kits that are currently 
commercially available at $800.  Alternatively, these machines would have to be replaced in 
their entirety for $3000.  Assuming an annual retirement rate of 5% of the estimated 200,000 
units in existence in the Fall of 2011, approximately 170,000 of these units would be in existence 
in the Fall of 2014.  This would result in a one-time upgrade conversion cost of between $136M 
and $510M.  The most-probable conversion cost is considered to be $136M.  Factoring in the 
impact of a 20% corporate tax, the net conversion cost to upgrade these non-MDB-based units is 
between $109M to $408M, with a most-probable value of $109M. 
Summing the above totals for the large- and small-vending machine owners and operators, while 
including the costs for upgrading all non-MDB-based vending machines, the vending industry 
total conversion costs would be between $199M and $500M.  These conversion costs assume 
that alternative material coin dimensions are maintained the same as incumbent coins, but EMS 
between the coin sets differ.  The impact of 20% corporate taxes is also reflected in these 
numbers.  Independently of changes to EMS, the conversion costs are estimated to be between 
$713M and $1.319B if coin dimensions are changed from incumbent coins.  The most-probable 
conversion costs for vending machine owners and operators are $224M for coins of the same 
dimensions but different EMS; the most-probable conversion cost is $900M for new coins of 
different dimensions than incumbent coins.
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In 2010 the vending industry had $42.2B in revenue [10].  Assuming that the industry-wide 
average vend price is between $1 and $2 per item, this represents approximately 21 billion to 42 
billion vends each year.  If the average vend price was increased by 5 cents per vend (i.e., 
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One estimate from a coin-acceptance manufacturer indicated that a 10% difference in coin thickness would 
require that all fielded coin mechanisms be replaced.  The threshold on coin thickness was thought to be even 
smaller than 10%.  The actual threshold values are not known by the industry.  A very detailed engineering analysis 
is required to define a more accurate threshold values for diameter and thickness.
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Coin mechanisms include the coin acceptor, where coins are validated, tubes to store coins for making change and 
other hardware to process coins.
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The cost summaries defined in this paragraph are associated with changes to the quarter dollar coin, which is the 
most widely accepted coin within the vending industry.  If no changes are made to the quarter dollar coin, but 
changes are made to either one or both of the 5-cent or dime coins, then the conversion costs would be 
approximately 98.9% of the conversion costs listed in this paragraph.  Change to the dollar coin, with no changes to 
the 5-cent, dime or quarter dollar coins would result in conversion costs of approximately 88% of the values defined 
in this paragraph. 
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approximately between 2.5% and 5% of current totals), then the conversion costs required by the 
vending industry could be fully recovered in 1.4 months to 7 months (if no changes are made to 
coin dimensions) without impacting current profit margins.  If coin dimensions were changed, 
then the conversion costs could be fully recovered between 4.4 months and 16 months as a result 
of increasing the average vend price by 5 cents. 
4.5.1.4  Bulk Vending 
One often overlooked segment of the broader vending industry is bulk vending, which in 2010 
comprised 2.0M machines.
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Bulk vending machines dispense loose candy, gum balls, nuts, 
capsules and small rubber balls (among other items).  These units, which in 2010 generated 
$388M in revenue [10], are commonly found in shopping malls, and in entryways and on 
checkout counters of restaurants and other businesses.  They are operated by placing a coin or 
coins into a slot on the front of the machine and manually rotating a handle to engage the 
mechanical dispensing unit to deliver the desired product.  According to Reference 10, virtually 
all of these machines require payments in increments of 25 cents.  Therefore, the overwhelming 
majority of bulk vending machines only accept quarter dollar coins.  For the present analysis, 
only quarter dollar coins have been assumed to be accepted by bulk vending machines.  In 
virtually all such devices, coin dimensions are the only characteristic validated; in some 
instances, only coin diameter is validated.  Changes to US circulating coin materials of 
construction will therefore not impact the bulk vending industry if coin dimensions are 
maintained at their current values.  However, if the quarter dollar coin dimensions are changed, 
then the simple coin-acceptor mechanism used in bulk vending machines would have to be 
redesigned to accept multiple coin dimensions (the incumbent and new quarter dollar coins) for 
the required vend amount.  Given the relatively low cost of these units, most owners may choose 
to discard the old single-coin-dimension units for a new (though not currently developed) multi­
coin-dimension unit.  At $50 per machine [11], the total out-of-pocket conversion cost would be 
on the order of $100M to $150M, where the higher value also assumes an additional $75 service 
fee per site and three bulk vending machines per site.  The most-probable conversion costs for 
bulk vending resulting from changes to the dimensions of the quarter dollar coin is $150M.  
Accounting for a 20% corporate tax impact as discussed above for the vending machine owners 
and operators, the expected net conversion costs are estimated to be between $80M and $120M, 
with $120M being the most-probable net conversion costs if quarter dollar coin dimensions were 
changed.