The end may be near for iconic Canadian Tire money

In a world where transactions can be processed through the wave of a card, and the one-cent piece is an endangered species, how much time can be left for Canada's favourite form of alternative currency?

Canadian Tire suggested on Thursday it will soon discontinue its tradition, introduced in Toronto in 1958 and nationally in 1961, of rewarding cash purchases with bills that bear denominations under a dollar.

"The Company continues to evolve its loyalty program and customer-centric retailing initiatives," read its latest statement to shareholders, "with a pilot of its new loyalty program planned to launch in a test market later in 2011."

Translation: sooner than later, Canadian Tire money's ex-presidential-looking mascot Sandy McTire will basically be going digital.

Suggestions of a revamp were raised in December 2009 when the store introduced a limited-edition dollar coin to accompany the printed coupons.

The coins, whose second run last February depicted either skating, tobogganing or hockey on one side, and Sandy McTire's hatted mug on the other, proved especially popular last winter when they were given out to customers who spent $25 or more.

But since loyalty programs are typically not rounded off to the next dollar, Canadian Tire seems likely to find a more efficient way to reward regular customers, even if the standard coupon rate is now just 0.4 per cent.

When the concept of Canadian Tire money inevitably takes the form of a card, the biggest losers might be groups that have historically asked people to donate their hoarded bills for the sake of a good cause, even though other businesses have also accepted the fake currency to be legal tender, since they could always use it to buy new light bulbs.

A year ago, though, the store revealed the redemption rate was on the rise in the thick of a recession, and increased its liability provision by about $5 million as a result.

Canadian Tire profits nearly doubled to $181.1 million in the fourth quarter of 2010, even though the company missed analyst estimates, something it plans to rectify with a new campaign that emphasizes the chain's 89-year homegrown heritage in the midst of a new wave of U.S.-owned retail competitors.