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Consumers may want to avoid offering retailers a penny for their thoughts from now on. What they could get for their cent is a blast of complaints from many businesses owners now struggling with premature shortages of the soon-to-vanish copper coin. That’s in turn creating awkward moments at the checkout stand, and requiring improvised solutions when making correct change for customers isn’t possible.
The small coin conundrum is the result of President Donald Trump’s February decision to order “my Secretary of the U.S. Treasury to stop producing new pennies.” The move followed the Department of Government Efficiency first putting the penny in its sights, when its founder and leader at the time, Elon Musk, explained the lowest valued coin “costs over 3 cents to make and cost U.S. taxpayers over $179 million in FY2023.” With arguably more of the coppery orbs filling jars, car ashtrays, and spaces between sofa cushions than used in payments, Trump decided to halt minting of the coin and allow it to gradually disappear from circulation.
So, why are retailers reacting now? Because a growing number of those businesses report they’re already coming up short on pennies when trying to make exact change for customers. That’s occurring as several centers that distribute the coins for the Federal Reserve Bank have stopped making deliveries. They‘re also slated to halt minting any new metallic portraits of Abraham Lincoln next year, when their use is expected to slowly taper off.
For reasons that aren’t entirely clear, that gradual count down on the penny’s active service has already resulted in a shortage at many shops, restaurants, and chain stores — months earlier than anyone had expected. As a result, business owners are having to come up with workarounds when they can’t give customers the change they’re owed.
According to several press reports, that forced Wisconsin-based convenience store chain Kwik Trip to start rounding cash purchases down to the nearest nickel. Rival Love’s Travel Stops are reportedly also rounding sales, but instead upward to the next five-cent level.
Family-owned convenience chain Sheetz is taking another tack. It’s urging customers to come in and offer up their extra pennies in exchange for a donation to charity in their name. Sheetz partners with the Salvation Army to provide children with clothes, toys, and holiday parties.
“Customers can also choose to trade in their extra pennies for a free self-serve drink or donate their spare pennies to support Sheetz For the Kidz,” Sheetz public affairs manager Nick Ruffner told the Nexstar news group. “Sheetz Donations can be processed through the register at all Sheetz locations to ensure all funds go directly to Sheetz For the Kidz, and the coins will then be recirculated for other customers.”
Meanwhile, Sheetz and other retailers that are suffering penny shortages — and cringey moments having to explain their workaround solutions to customers — are urging clients to pay with cards or phone apps instead of cash. But the cent-less dilemma is spreading quickly enough to other businesses that their trade organizations are taking action.
In September, NACS retailer group — whose members include the National Association of Convenience Stores and the National Grocers Association — did something rarely seen in the private sector. It asked the government to come up with regulations — this time for companies dealing with the penny’s spreading shortage, and eventual demise.
“NACS has raised industry concerns with Congress and the Administration and is advocating for federal legislation to permit the rounding of cash transactions,” Anna Ready Blom, NACS strategic advisor of government relations said in a recent article on the organization’s site. “Businesses are desperate for Congress to address this issue by passing a law allowing them to round to the nearest nickel. Without federal legislation, businesses are left in the impossible position of trying to figure out what to do and at risk of being out of compliance with other laws.”
The reason for the concern is that many states and localities have their own laws that prohibit rounding in cash transactions. As a result, NACS is urging the government to pass federal statutes to permit that solution when pennies run short, and define exactly how rounding should be carried out.
If that happens, it should protect retailers from any potential legal pushback from consumers seeing their $5.63 purchase rounded up to $5.65. But it won’t spare cashiers the embarrassment while explaining to customers that they can’t make exact change, or prevent them from disappointing young clients who wanted an increasingly rare penny for the one cent gum machine.
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Bruce Crumley
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