Some stores across the U.S. are running out of coins because pennies are no longer produced. Retailers say lawmakers need to pass a legal remedy that would allow rounding to the nearest nickel.
President Donald Trump tells Treasury Department to end penny revenue
President Donald Trump has directed the Treasury Department to halt production of pennies, citing production costs.
The days of the penny are coming to an end, and some retailers are already running out of pennies.
The Treasury Department officially marked the beginning of the end of penny production in May when it placed its final order for blanks, the flat metal discs used to make pennies. This comes after President Donald Trump told the agency in February to stop producing coins that cost more than 3 cents to produce (3.69 cents, according to the U.S. Mint).
The U.S. Mint reportedly paid its last penny in August, the American Bankers Association said on Oct. 17. Some convenience stores, supermarkets and retailers, including Kroger and Home Depot, have already set up stores to address the penny shortage.
Without enough pennies, the store will not be able to make the correct change on cash transactions. “It hit us much faster than anyone thought,” said Dave Niemi, a spokesman for Kwik Trip, which operates about 850 convenience stores in the Midwest. The company is struggling to make pennies, he told USA TODAY.
“This does not affect all of our stores,” Niemi said. “But if the store is short on money, we just say, ‘Okay, we’ll round down to the nearest nickel. So we lose money in that respect, but it’s in the guest’s best interest.'”
Kroger and Home Depot also hit by penny shortages
At some Kroger stores in central Ohio, shoppers may see paper signs reminding them to use change when paying with cash because they don’t have enough change.
“We continue to evaluate the impact of the U.S. Treasury Department’s decision to end production of Pennies,” a Kroger spokesperson said in an emailed statement to the Columbus Dispatch, part of the USA TODAY Network. “If paying in cash, please have change ready.”
In an email exchange with USA TODAY, Home Depot spokeswoman Beth Marlowe said the situation was “really an industry-wide issue” and referred this reporter to the Retail Industry Leaders Association.
The group and several other groups, including the National Retail Federation, National Restaurant Association, National Grocers Association and National Convenience Store Association, sent a letter to the chairs of Congress’ Financial Services and Banking Committees urging them to pass “national legislation that would allow businesses to round cash transactions to the nearest nickel.”
The group argues that the federal law is needed because at least 10 states (and some local governments) have laws prohibiting rounding transactions to the nearest nickel. “As we enter the busiest shopping season, retailers are increasingly concerned that a penny shortage will negatively impact their operations,” Austin Jensen, RILA’s senior vice president of government affairs, said in an Oct. 14 news release.
SNAP and Check Cashing: Problems That Can Happen Without a Penny
The new law should include language that fixes other consequences that businesses may face from not being able to provide exact change “because they don’t get a penny,” the groups said in a letter to Congress.
- Snap issues: The Supplemental Nutrition Assistance Program (SNAP), which provides benefits to low-income people and their families to buy groceries at formal retailers like supermarkets and convenience stores, is already facing potential funding shortfalls due to the government shutdown. Because SNAP customers cannot be given “advantageous treatment or preferential treatment over other customers,” and the benefit program prohibits food price markups or devaluations, the penny shortage could disrupt stores that serve SNAP shoppers, the group said. The group also sent a letter to Brooke Rollins, Secretary of the Department of Agriculture, which administers the SNAP program, asking for “immediate legislative guidance from the Department of Agriculture specifically providing that SNAP-certified food retailers do not violate SNAP’s equal treatment provisions when they round cash transactions to the nearest nickel.”
- Check out our caching concerns: Many retailers are cashing out their customers’ paychecks. “These services are especially important for the millions of unbanked customers,” the groups told Congress. “Unless these services are covered by law, many low-income customers may lose access to the services they need and expect.”
Why does a penny shortage occur?
With about 250 billion pennies in circulation, there is not necessarily a shortage, but the American Bankers Association says there are “localized supply issues.”
According to the ABA, about one-third of the Federal Reserve’s 165 coin terminal facilities (places where coins are distributed and deposited) have suspended penny trading. “Supply issues” are likely to occur in some parts of the country where these terminals have stopped penny circulation.
This poses “a significant challenge to the coin distribution system across the country,” said Bill Maurer, dean of the School of Social Sciences at the University of California, Irvine and director of UCI’s Institute for Money, Technology and Financial Inclusion.
Maurer told USA TODAY: “By stopping coin terminals from accepting deposits, the Fed is tearing apart the entire penny distribution system. The result is regional penny shortages and banks are depositing pennies further afield, which will accelerate the removal of pennies from parts of the country.”
The “disorganized implementation of the penny repeal” is hurting “primarily low-income Americans and the businesses they support,” he said, as well as the local banks and citizens most likely to be affected.
“The situation is much worse than expected, and we are seeing a penny shortage spread across the country,” Maurer said. “This is a case of rushing ahead with changes to the payments infrastructure that underpins our economy and livelihoods without careful forethought to how they will play out and the legal and operational considerations that should have been addressed in advance.”
Contributor: Emma Wozniak, The Columbus Dispatch
Mike Snyder is a national trends news reporter for USA TODAY. You can follow him on Threads, Bluesky, and X, and email him at: mike snyder & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com
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