We had one cent pieces that cost something like two point five cents to make. We had two cent pieces that cost something like five cents to make too.

Got rid of 'em.

Now our smallest coin (talking about both NZ and Australia here - even though we have different currencies) is five cents.

What do we do?

We use the Swedish rounding system.

if it costs one or two cents then you round down.
if it costs three or four cents then you round up.

When you buy in the supermarket (or whatever) they add it all up together and THEN apply the swedish rounding system on the total. It isn't done on every single item (which would of course have more impact). Works well, I think.

I kept finding pennies in my wallet when I was in the US. Liked to dump them in the 'leave a penny take a penny' jar, but aside from that...