The two dollar bill is growing in popularity.
In 2005, depository institutions ordered $122 million in $2 notes, according to Federal Reserve statistics. That is more than double the average amount ordered from 1991 to 2000.
“We noticed the increase in demand beginning in 2001,” said Michael Lambert, assistant director for cash at the Federal Reserve. That year, banks ordered $92 million in $2 notes and ever since, the orders have grown.
Much to the puzzlement of foreign coin fanatics and domestic experts, the U.S. $1 bill remains far more popular, even though it’s more likely to clog a wallet.
At year-end 2005, there were $8.6 billion $1 notes in circulation, and $3.26 billion in $1 coins, federal statistics show.
Still, $2 bill usage is increasing, with banking and currency experts not exactly sure about what is fueling the surge. A few possibilities are inflation, the introduction of Sacagawea $1 coin in 2000, and even, according to some, immigration.
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One group that has embraced the note is the exotic dancing industry. Strip clubs hand out $2 bills when they give customers their change and the bills end up in dancers’ garters and bartenders’ tip jars.
“The entertainers love it because it doubles their tip money,” said Angelina Spencer, a former stripper and the current executive director of the Association of Club Executives, an adult nightclub trade group representing some 1,000 members.
Wine store owner Bruce Gibson is also a big fan of the $2 note. The rarity of getting the bills helps new customers remember his place, he said, and helps market the shop when customers spend them later.
“The government actually pays for my advertising. Where else can I find that?” Gibson asked, speaking at the Harwich Spirits Shoppe, in Harwich, Massachusetts. When customers ask him where he gets the bills, Gibson jokes that he prints them in the back of the shop.
[…]
In addition to the inflation factor, Robert Hoge, curator of North American coins and currency at the American Numismatics Society, thinks $2 bill demand may be getting help from immigration flows, particularly from Canada and Europe where currency denominated in twos are common.
Peter Morici, professor at the Robert H. Smith School of Business at the University of Maryland, believes that with the introduction of the Sacagawea, named for a famous Indian woman, people are beginning to realize that inconvenience of $1 bills.
“In order to have a successful $2 bill you have to have a successful $1 coin,” he said.
I can’t comment on the strip club aspect, but there are a couple of businesses here that I’m aware of that are known for using $2 bills – the Mucky Duck and C&D Scrap Metal. How much of a marketing benefit that is I couldn’t say, but it must be something, since it’s penetrated my consciousness.
I don’t understand the disdain for the $1 bill. I’d rather have those “clogging” my wallet than a bunch of $1 coins weighing down my pocket. I understand the theoretical allure of $1 coins – they last much longer – but I’m of the belief that they ain’t broken and don’t need fixing. We’re on what, the third $1 coin design in my lifetime and they still haven’t caught on? Maybe that should tell us something.
I do enjoy getting $2 bills, just for the coolness factor. I suspect some people are reluctant to spend them, which also may contribute to their recent uptick in demand. I’ve never had any trouble spending them, though I admit I’ve never tried it at a Taco Bell.
What would you rather have? Two dollar bills and dollar coins, or one dollar bills?
The problem with dollar coins is that they will never take off unless the dollar bill is discontinued at the same time.
Frankly I’m in favor of discontinuing both the dollar bill and the penny and making the dollar coin usable in vending machines. The number of quarters required for just about any simple task is ridiculous. Parking meters, food vending machines, laundry machines, car washes, all those places require rolls of quarters to use and they don’t currently take dollar coins. That is just ridiculous. Yes, some of them take dollar bills but feeding bills into the bill readers is always an exercise infrustration.
Frankly I think we are in a race to see whether electronic money or dollar coins takes off first. In many parts of the country you can now use credit/debit cards for things like parking meters and vending machines. I think that if venders are going to re-tool their machines, they’ll be doing it to take plastic instead of dollar coins.
You mention some of the currency is used in [a few of my friends may point out] establishments of possibly questionable moral character.
So, when another citizen is accused and convicted of something by the Chronic, not only will I read that materials that could possibly be used to make bombs and personal computers have been confiscated from someones house, they will also add that (s)he had a $2 bill in her (his) wallet. owwwwww!
When I lived in Connecticut, I got some $2 bills from the bank. Mostly when I paid for stuff with them, I got no comment. But one shopkeeper asked me if I went to the OTB much, because apparently the track and OTB locations in Connecticut use $2 bills a lot. I guess they’re a popular denomination for sinful activities…
I’d rather stick with paper. My experiences with Loonies, Twonies and Euros made for too much change in my pocket when I’ve been away.
For those of you wondering, the Loonie and Twonie are the dollar and two dollar coins of Canada. The Loonie is named such for the loon that appears on the front of it.
I agree with Kent that what the $1 coin needs is to be usable in vending machines and parking meters. The coins certainly are useful for paying tolls.
But there are two reasons why this likely won’t happen. First, there is the lobby for the dollar bill changer industry. Second, an even better solution is to join Europe and the rest of the world in using cell phone text messaging to pay for vending machines and parking meters.
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