Final answer:
Encoding failure is the reason why few people can accurately describe a penny despite handling them frequently.
Step-by-step explanation:
The fact that few people can accurately describe a penny even though they have handled thousands of them is an example of encoding failure. Encoding failure occurs when information is not effectively stored in long-term memory, making it difficult to retrieve later on. In this case, most people don't encode the specific details of a penny, such as the design on the front, because they only encode enough information to distinguish it from other coins. Therefore, they are unable to accurately recall the details of a penny.