New Dollar Coin: Marketing Campaign Raised Public Awareness but Not Widespread Use
Highlights
If the public used the dollar coin rather than the dollar note, the government could potentially save up to $500 million annually. The Mint spent $67.1 million to promote the new dollar coin from 1998 to 2001, including expenditures for a marketing and advertising program; public relations and publicity programs; 23 partnerships with banking, entertainment retail, grocery and restaurant chains; and promotional events with transit agencies. Most of the $67.1 million was used for a national advertising campaign to build public awareness, generate acceptance, and encourage use of the new dollar coin. The Mint also worked with contractors to stimulate the new dollar coin's use in state and local government operations and used its own staff for marketing activities in federal government facilities, but it did not track the costs for the use of Mint staff. According to the Mint, between January 2000 and December 2001, the new dollar coin had generated $1.1 billion in revenue and $968 million in seigniorage. The Mint faces several barriers in its efforts to increase the new dollar coin. The most substantial barrier is the current widespread use of the dollar bill in everyday transactions and public resistance to begin using the new dollar coin. Other barriers that hinder wider circulation include (1) negative perceptions the public may have of the coin after two failed introductions, (2) lack of public information about the savings to the government from using the new coin, (3) lack of public awareness about the comparative advantages of the dollar coin over the dollar bill, and (4) the idea that the ease of carrying the bill is more beneficial than the durability of the dollar coin. In general, the Mint's marketing plan describes a program that is much smaller in scope than the marketing campaign used to launch the new dollar coin in 2000. The Mint plans to address some, but not all, of the barriers to increasing use and recognizes that successfully achieving widespread use of the new dollar coin will be difficult if the dollar bill cocirculates with the new dollar coin. The Mint's 2001 report to Congress did not fully and accurately describe the costs of the marketing campaign, the results obtained, and problems encountered. The 2002 report gave more details on marketing costs and a fuller description of the problems encountered.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Mint, San Francisco, CA | Because the Mint does not know whether additional marketing is likely to increase use and because past efforts have had limited effects, aside from honoring existing promotion agreements and conducting planned research on public acceptance and distribution barriers, the Director of the Mint should suspend further expenditures for marketing and promoting the new dollar coin until research is completed and the Mint can demonstrate that such efforts are likely to increase long-term coin circulation or are necessary to achieve Congress's desire for cocirculation. |
Closed – Implemented
The Mint addressed the key part of this recommendation in September 2002. We kept the recommendation open for the Mint to complete the revision of its marketing plan. Substantial legislation has since changed the conditions under which our old report was issued so we consider the funding for the old marketing program to have been suspended. The new legislation cited this GAO report (GAO-02-896) and asks that no significant funds be expended for marketing. The recommendation should be closed as implemented because the Mint agreed to suspend marketing in their response to this recommendation and new legislation significantly changed the $1-coin program and requirements for the Mint by Congress.
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| United States Mint, San Francisco, CA | Further, the Mint should revise the marketing plan it submitted to Congress to reflect such an approach and work with Congress to reach an agreement on an appropriate amount of funds to use for these activities. |
Closed – Not Implemented
Since PL 109-145 created a major new $1 coin program with a new set of requirements for the Mint that will extend over the next 10 years, this recommendation should be closed as not implemented.
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