America is running out of pennies, quite literally! The US is facing a nationwide shortage of pennies, months after President Donald Trump halted production of the one-cent coin without introducing a transition plan.
The decision, which came as a cost-saving measure, is now impacting the country’s commerce. In many shops and banks, staff are struggling to handle cash transactions without the smallest denomination coin. Retailers in several states have exhausted their penny supplies and can no longer provide exact change to customers paying with cash. Banks, meanwhile, say they are receiving no new stock and have begun rationing pennies to their clients.One regional chain, Sheetz, even tried to lure the coins back into circulation by offering customers a free soda in exchange for 100 pennies. Another business has warned that the shortage will cost millions this year because it is rounding transactions down to avoid legal challenges.“It’s a chunk of change,” Dylan Jeon, senior director of government relations with the National Retail Federation, told AP.‘Wanted it to go—but not like this!’The strain first became visible in late summer and is intensifying as retailers prepare for the busy holiday trading period. “We have been advocating abolition of the penny for 30 years. But this is not the way we wanted it to go,” said Jeff Lenard with the National Association of Convenience Stores.Banks said that they received little warning. Troy Richards, president of Guaranty Bank & Trust Co in Louisiana, told AP that penny deliveries abruptly stopped in August.“We got an email announcement from the Federal Reserve that penny shipments would be curtailed. Little did we know that those shipments were already over for us,” Richards said.The $1,800 worth of pennies his branches held disappeared within a fortnight. Only small, controlled amounts are now given to cheque-cashing customers.The sudden halt has also left companies pleading with consumers to pay with exact change. However, despite these struggles, not one retailer or bank is pushing to restore production of the coin, disliked due to its weight and limited use.“We don’t want the penny back. We just want some sort of clarity from the federal government on what to do, as this issue is only going to get worse,” the NACS’ Lenard said.
High cost, less worth—Pennies go awayA few days into his second term, on February 9, President Trump announced that the US will stop minting pennies, calling the decision part of a broader effort to streamline government spending. Both the penny and nickel have been more expensive to produce as compared to their costs. The US Mint’s latest report shows why: it cost 3.7 cents to make a penny in 2024, and 13.8 cents to produce a nickel.“Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” Trump wrote on Truth Social.The treasury department placed its final order for blank copper-zinc planchets ( metal disks that are minted into coins) in May. The last penny was minted in June and, by August, the remaining stocks were dispatched to banks and cash-handling companies.Common Cents ActA bill, Common Cents Act, currently in Congress, proposes standardising cash payments by rounding to the nearest nickel. Businesses are open to it, but consumer advocates warn that rounding up could increase costs for shoppers.The treasury department has not responded to requests for guidance on how retailers and banks should manage the growing disruption.Other countries took years to phase out low-value coins. Canada announced the end of its one-cent piece in 2012 and eased out of using it through 2013, while Britain’s shift to the decimal system stretched across much of the 1960s and early 1970s.By contrast, the US removed the penny from circulation within months, and without legislative backing, a move that has left banks and retailers demanding clarity.How is it impacting government and retailersThe Mint: Despite issuing 3.23 billion pennies in 2024, more than any other US coin, most do not return to circulation. Americans tend to hoard pennies in jars or keep them as decor, forcing the Mint to manufacture billions each year. By ending production, the treasury expects to save $56 million, while the Mint remains profitable overall, generating $182 million in seigniorage last year through other coins and collectors’ sets.Compounding the issue, almost a third of the Federal Reserve’s coin distribution terminals are now closed to both penny withdrawals and deposits. That means regions that still have spare pennies have no way to send them to regions running out.“As a result of the US department of the treasury’s decision to end production of the penny, coin distribution locations accepting penny deposits and fulfilling orders will vary over time as (penny) inventory is depleted,” a Federal Reserve spokeswoman said.Retailers: Retailers now face legal complications. In several states, rounding cash transactions up to the nearest nickel is illegal, as it would unfairly disadvantage cash customers compared with card users. To avoid lawsuits, stores are rounding down instead, a policy that comes with a financial hit. Kwik Trip, a convenience chain in the Midwest, says rounding down at tills could cost it around $3 million this year. Others are encouraging customers to donate loose change at counters to avoid handling pennies altogether.
