It’s a pretty zany idea,” admits 28-year-old Edward Malley as he lugs around the cornucopia of copper coins he has stashed away in his Greenwich, Conn., home. “But there is no way we can lose.” For Ed, a former school teacher and one-time actor, and his brother, Arthur, 26, who quit Harvard Business School to join the First National City Bank, the sure thing has been to pool their resources and become spare-time penny speculators.
While the penny shortage continues, they expect to resell the coins to hard-pressed retailers at markups of 20% to 32%. So far, developing penny sources an hour each morning by telephone and making deliveries in their ’68 Volkswagen camper two hours each evening, they have turned an $18,000 profit with their penny antics. Best of all, their enterprise is perfectly legal.
The penny (95% copper, 5% zinc) is the only coin of the realm with an intrinsic value approaching its face value. As the price of copper rose at the beginning of the year, the Malley brothers took their combined savings of $15,000 and borrowed another $15,000 from family and friends. “Every one of them thought we were insane,” Ed recalls, “and said so.”
By the time the price of copper peaked in April (it went up to $1.34 per pound before dipping to a current $.85) people were hoarding pennies, and merchants became frantic. The Malley brothers were ready with a lode of three million pennies. They had also become adept at scrounging for more.
Their sources include banks, retail outlets, friendly bartenders and even ushers in churches. (“You’d be surprised how many pennies they’re getting these days,” says Ed.) They learned to approach female tellers only and to turn on the charm. Their fictitious cover business, “Robin’s Haberdashery,” was never questioned.
As the penny crunch continues, the Malleys are now offering a 10% premium for new coppers, but their customers—from big retailers to hamburger stands—are still willing to pay an average 26% commission to have enough change in the cash drawers. Ed wouldn’t even mind being stuck with some of the pennies; he expects the price of copper to double in the next five years. “Either way I’m a winner,” he says. “I’m making a high profit and having fun.”