Change is hard. Making change keeps getting harder.
Owners of restaurants, cafés, and other retail businesses across the U.S. continue battling a worsening shortage of pennies after the Treasury Department stopped producing them on Nov. 12. But as entrepreneurs searched beneath sofa cushions and car mats for any extra one-cent coins they’d previously tossed aside, investors shelled out over $16.7 million for the final 696 pennies ever minted.
That represents a veritable fortune paid for coins the government doesn’t think are worth producing anymore, since each one costs four times its face value to make. But that willingness by investors to fork out between $48,000 and $800,000 for the last pennies ever minted demonstrates the dramatically clashing fortunes of the nation’s one-cent piece.
On the one hand, collectors continually increased their bids during a Dec. 11 Stacks & Bowers auction of the 232 lots up for grabs, each containing three of the final coppery portraits of Abe Lincoln ever produced. On the other, the National Restaurant Association (NRA) begged the U.S. Treasury to urgently distribute more of the now condemned pennies to its members and other small businesses, many of whom are now struggling to make change for customers.
“When operators can’t provide exact change, it creates friction at checkout, frustrating customers,” said NRA president Michelle Korsmo in a letter to the Treasury and Federal Reserve. “In a highly competitive industry, like restaurants, any change to the hospitality our customers expect could mean a lost return sale for an operator.”
It risks costing even more than that.
Eager to avoid clashes with diners peeved by penniless business owners rounding up to the nearest nickel, the NRA says its members are instead routinely rounding down. That, Korsmo warned, will cost U.S. restaurants an estimated $13 million to $14 million per month unless they can get their hands on more one-cent coins soon.
Meanwhile, with the profit margins of U.S. eateries averaging just 3 percent to 5 percent, the NRA said a penny here and a penny there will quickly reduce their monthly proceeds to nothing.
To avoid that, the organization is calling on the Fed and Treasury to resume distribution of increasingly mothballed one-cent coins, which they stopped doing earlier this year. In addition, the NRA echoed an October appeal by the National Retail Federation (NRF,) which urged federal agencies or Congress to issue formal rules for business owners rounding off in making change without pennies.
Regulations on how and when to round up or down would not only be valuable in navigating — or indeed preventing — disputes with customers angered at losing a few cents in the process. The NRF also said it would protect companies that do most of their sales in cash from “legal risks simply for implementing necessary practices in response to the nationwide penny shortage.”
As Inc. previously reported, many small businesses are seeking solutions of their own. Some are appealing to customers to use their spare pennies for purchases, or in swaps for credit toward future buys. Other entrepreneurs are offering free drink refills or other giveaways to people handing over their reserves of one-cent coins.
But all that is just nickel and diming compared to the money paid for the auctioned lots of the last pennies ever made.
All 696 of those coins were struck with the Greek letter omega beside Lincoln’s portrait, signifying they were among the last minted in the penny’s 232-year history. And each set of those three, one-cent coins also contained a specially minted 24-carat gold version.
That extravagance must seem well over the top to small business owners — especially those struggling to scrounge up the modest penny or two they need to send change-stickling customers happily on their way.
Bruce Crumley
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