Banks and retailers run short on pennies as the US Mint stops making them

By KEN SWEET AP Business Writer NEW YORK AP The United States is running out of pennies President Donald Trump s decision to stop producing the penny earlier this year is starting to have real implications for the nation s commerce Merchants in multiple regions of the country have run out of pennies and are unable to produce exact change Meanwhile banks are unable to order fresh pennies and are rationing pennies for their customers One convenience store chain Sheetz got so desperate for pennies that it briefly ran a promotion offering a free soda to customers who bring in pennies Another retailer says the lack of pennies will end up costing it millions this year because of the need to round down to avoid lawsuits It s a chunk of change mentioned Dylan Jeon senior director of ruling body relations with the National Retail Federation FILE A lone penny is illuminated in a bin of completed pennies at the U S Mint in Denver on Aug AP Photo David Zalubowski File A sign in a Kwik Trip store shows the store will no longer be using pennies to give change on Oct in Yorkville Wis AP Photo Morry Gash A sign in a Kwik Trip store shows the store will no longer be using pennies to give change on Oct in Yorkville Wis AP Photo Morry Gash Show Caption of FILE A lone penny is illuminated in a bin of completed pennies at the U S Mint in Denver on Aug AP Photo David Zalubowski File Expand The penny dilemma started in late summer and is only getting worse as the country heads into the holiday shopping season To be sure not one retailer or bank has called for the penny to stick around Pennies especially in bulk are heavy and are more often than not used exclusively to give customers change But the abrupt decision to get rid of the penny has come with no guidance from the federal leadership A large number of stores have been left pleading for Americans to pay in exact change We have been advocating abolition of the penny for years But this is not the way we demanded it to go stated Jeff Lenard with the National Association of Convenience Stores Trump revealed on Feb that the U S would no longer mint pennies citing the high costs Both the penny and the nickel have been more expensive to produce than they are worth for several years despite efforts by the U S Mint to reduce costs The Mint spent cents to make a penny in according to its majority current annual description and it spends cents to make 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 revealed in May that it was placing its last order of copper-zinc planchets the blank metal disks that are minted into coins In June the last pennies were minted and by August those pennies were distributed to banks and armored motorcycle system companies Related Articles Aurora brewery to close taproom after years with plans to open a new space Chicago breakfast and lunch restaurant Egg Harbor opening first Colorado locations Is Telluride ready to chuck Chuck Why the opulent ski town turned on the resort s longtime owner Casa Bonita actors cliff divers launch strike during Halloween Following last year s closure er Brewing to move from Denver s RiNo to Chaffee County Troy Richards president and chief operations officer at Louisiana-based Guaranty Bank Trust Co explained he s had to scramble to have enough pennies on hand for his customers since 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 disclosed Richards reported the in pennies the bank had were gone in two weeks His branches are keeping small amounts of pennies for customers who need to cash checks but that s it The U S Mint issued billion pennies in the last full year of production more than double that of the second-most minted coin in the country the quarter But the challenge with pennies is they are issued given as change and rarely recirculated back into the commercial sector Americans store their pennies in jars or use them for decoration This requires the Mint to produce notable sums of pennies each year The administration is expected to save million by not minting pennies according to the Treasury Department Despite losing money on the penny the Mint is profitable for the U S authorities through its production of other circulating coins as well as coin proof and commemorative sets that appeal to numismatic collectors In the Mint made million in seigniorage which is its equivalent of profit Besides American s penny hoarding habit a logistical issue is also preventing pennies from circulating The distribution of coins is handled by the Federal Reserve system Several companies mostly armored carrier companies operate coin terminals where banks can withdraw and deposit coins Roughly a third of these coin terminals are now closed to both penny deposits as well as penny withdrawals Bank lobbyists say these terminals being closed to penny deposits is exacerbating the penny shortage because parts of the country that may have chosen surplus pennies are unable to get those pennies to parts of country with shortages As a consequence of the U S 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 commented The lack of pennies has also become a legal minefield for stores and retailers In several states and cities it is illegal to round up a transaction to the nearest nickel or dime because doing so would run afoul of laws that are supposed to place cash customers and debit and credit card customers on an equal playing field when it comes to item costs So to avoid lawsuits retailers are rounding down While two or three cents may not seem like much that extra change can add up over tens of thousands of transactions A spokesman for Kwik Trip the Midwest convenience store chain says it has been rounding down every cash transaction to the nearest nickel That s expected to cost the company roughly million this year A few retailers are asking customers to give their change to local or affiliated charities at the cash register in an effort to avoid pennies as well 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 While the proposal is palatable to businesses rounding up could be costly for consumers The Treasury Department did not respond to a request for comment on whether they had any guidance for retailers or banks regarding the penny shortage or the issues regarding penny circulation The United States is not the first country to transition away from small denomination coins or discontinue out-of-date coins But in all of these cases governments wound down the use of their out-of-date coins over a period of often years For example Canada reported it would eliminate its one-cent coin in transitioning away from one-cent cash transactions starting in and is still redeeming and recycling one-cent coins a decade later The decimalization process of converting British coins from farthings and shillings to a -pence-to-a-pound system took much of the s and early s The U S removed the penny from commerce abruptly without any action by Congress or any regulatory guidance for banks retailers or states The retail and banking industries rarely allies in Washington on procedures matters related to point-of-sale are demanding that Washington issue guidance or pass a law fixing the issues that are arising due to the shortage We don t want the penny back We just want several sort of clarity from the federal executive on what to do as this issue is only going to get worse the NACS Lenard noted