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United States of America Money is running out.
President Donald Trump’s decision to end production of the penny earlier this year is beginning to have a real impact on the country’s commerce. Merchants in many areas of the country have run out of money and are unable to make exact change. Meanwhile, banks are unable to order new pennies and are rationing pennies to their customers.
Sheetz, a convenience store chain, became so desperate for money that it ran a promotional campaign offering free soda to customers who brought in 100 pennies for a short time. Another retailer says it will lose millions this year due to a lack of money because of the need to round down to avoid lawsuits.
“It’s part of a change,” said Dylan Jeon, senior director of government relations for the National Retail Federation.
The money problems started in the late summer and are getting worse as the country heads into the holiday shopping season.
To be sure, no retailer or bank has asked you to keep the money around. Pennies, especially in bulk, are heavy and are often used exclusively to give change to customers. But the sudden decision to get rid of Penny came with no guidance from the federal government. Many stores urge Americans to pay exact change.
Jeff Lennard of the National Association of Convenience Stores said, “We’ve been advocating to eliminate the penny for 30 years. But this is not the way we wanted.”
Citing high costs, Trump announced on February 9 that the US would no longer dig a dime. Despite America’s efforts, both the penny and the nickel have become more expensive to produce than their price for many years. peppermint To reduce costs. According to its latest annual report, the Mint projects it will cost 3.7 cents to make a penny in 2024, and it will cost 13.8 cents to make a nickel.
“Let’s get the waste out of our great country’s budget, even if it’s a penny at a time,” Trump wrote on Truth Social.
treasury department In May it was said to be placing its last order of copper-zinc planchets – the blank metal discs that are minted into coins. In June, the last pennies were minted and by August, those pennies were distributed to banks and armored vehicle service companies.
Troy Richards, president and chief operating officer of Louisiana-based Guaranty Bank & Trust Co., said he has been struggling to keep enough money for his customers since August.
Richards said, “We received an email announcement from the Federal Reserve that penny shipments would be cut off. What we didn’t know was that those shipments had already been cut off for us.”
Richards said the $1,800 the bank had was gone within two weeks. Their branches are keeping small amounts of money on hand for customers who need to cash cheques, but that’s all.
The U.S. Mint issued 3.23 billion pennies in 2024, the last full year of production, more than double the amount of the quarter, the second-most minted coin in the country. But the problem with money is that they are issued, given out as change, and rarely put back into the economy. Americans keep their pennies in jars or use them for decoration. This requires the mint to produce significant amounts of money each year.
According to the Treasury Department, the government is expected to save $56 million by not minting money. Despite losing money, the Mint is profitable for the U.S. government through the production of other circulating coins as well as coin proof and commemorative sets that attract numismatic collectors.
In 2024, the Mint earned $182 million in seigniorage, equal to its profit.
In addition to America’s habit of hoarding money, a logistical issue is also preventing money from circulating.
The distribution of coins is controlled by the Federal Reserve System. Many companies, mostly armored carrier companies, operate coin terminals where banks can withdraw and deposit coins. About a third of these 170 coin terminals are now closed for deposits as well as withdrawals.
Bank lobbyists say that these terminals are being closed to deposit money, leading to money shortages, because parts of the country that may have some extra money are unable to transfer those money to parts of the country where they are lacking.
A Federal Reserve spokesperson said, “As a result of the U.S. Treasury Department’s decision to cease production of the penny, coin distribution locations accepting penny deposits and fulfilling orders will vary over time as (penny) inventory is exhausted.”
Lack of funds has also become a legal hurdle for shops and retailers. In some states and cities, it is illegal to round a transaction to the nearest nickel or dime because doing so would violate laws that put cash customers and debit and credit card customers on a level playing field in terms of the cost of the item.
Therefore, retailers are closing businesses to avoid lawsuits. Although two or three cents may not seem like much, spare change can add up to thousands of transactions. A spokesperson for Kwik Trip, a Midwest convenience store chain, says it is rounding each cash transaction to the nearest nickel. The cost to the company is expected to be about $3 million this year. Some retailers are asking customers to give their change to a local or affiliated charity at the cash register, in an effort to avoid wasting money.
A bill currently pending in Congress, known as the Common Cents Act, calls for cash transactions to be rounded to the nearest nickel, up or down. Although this proposal is pleasant for businesses, it may be costly for consumers to round up.
The Treasury Department did not respond to a request for comment on whether they had any guidance for retailers or banks regarding penny shortages, or issues related to penny circulation.
The United States is not the first country to move away from smaller denomination coins or to discontinue older coins. But in all these cases, governments discontinue the use of their old coins, often over a period of years.
For example, Canada announced that it would phase out its one-cent coins in 2012, move away from one-cent cash transactions starting in 2013 and is still redeeming and recycling one-cent coins a decade later. The “decimalization” process of converting British coins from farthings and shillings to the 100-pence-to-a-pound system occurred in the 1960s and early 1970s.
The US suddenly removed money from commerce, without any action by Congress or any regulatory guidance for banks, retailers, or states. The retail and banking industries, rarely allies in Washington on policy matters related to point-of-sale, are demanding that Washington issue guidance or pass a law to fix the issues arising from the shortage.
“We don’t want a penny back. We just want some clarity from the federal government on what to do, because this issue is going to get worse,” said NACS’s Lennard.