The U.S. Is facing a significant shortage of pennies, resulting in millions of dollars in losses for retailers.

The implications of President Donald Trump’s decision to stop producing the penny earlier this year are now significantly impacting the nation's commerce. Retailers across various parts of the country are experiencing shortages of pennies, preventing them from giving customers their exact change. Concurrently, financial institutions are unable to acquire new pennies and are limiting the supply they provide to their clients.

A particular convenience store chain, Sheetz, became so desperate for pennies that it briefly featured a promotion giving a free soda to shoppers who supplied 100 pennies. Another merchant states that the scarcity of pennies will cost it millions this year, due to the necessity of rounding down to prevent lawsuits.

“It’s a chunk of change,” said Dylan Jeon, senior director of government relations with the National Retail Federation.

The shortage of pennies began in late summer and is escalating as the nation approaches the busy holiday shopping period.

Certainly, no retailer or bank has advocated for the penny's continued existence. Pennies, particularly in large quantities, are cumbersome and are typically only utilized for providing customers with change. However, the sudden move to eliminate the penny has occurred without any direction from the federal government. Numerous businesses have found themselves urging Americans to tender the precise amount.

“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.

On February 9th, Trump declared the U.S. Would cease minting pennies due to escalating production expenses. For years, both pennies and nickels have cost more to manufacture than their face value, even with the U.S. Mint's attempts to lower expenses. The Mint's latest annual report indicates it cost 3.7 cents to produce a penny in 2024, and 13.8 cents for 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.

In May, the Treasury Department announced it was making its final purchase of copper-zinc planchets, which are the unadorned metal discs used to create coins. By June, the production of pennies had concluded, and these coins were subsequently delivered to financial institutions and armored transport firms by August.

Since August, Troy Richards, president and chief operations officer at Louisiana-based Guaranty Bank & Trust Co., has found himself needing to quickly secure sufficient pennies for his clientele.

“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.

Richards stated that the bank's $1,800 worth of pennies disappeared within a fortnight. His branches are now retaining minimal quantities of pennies solely for clients needing to cash checks, and nothing more.

In 2024, the final complete year of production, the U.S. Mint released 3.23 billion pennies, a quantity exceeding double that of the nation's second most frequently minted coin, the quarter. However, the issue with pennies lies in their issuance and distribution as change, with infrequent return to circulation. Americans tend to keep their pennies in containers or utilize them decoratively. Consequently, the Mint faces the necessity of manufacturing substantial amounts of pennies annually.

The Treasury Department anticipates saving $56 million by ceasing penny production. Although the penny itself incurs a loss, the Mint remains profitable for the U.S. Government due to its output of other circulating coins, alongside proof and commemorative sets sought by numismatic collectors.

In 2024, the Mint made $182 million in seigniorage, which is its equivalent of profit.

Logistical issue

In addition to Americans' tendency to hoard pennies, a logistical challenge is also hindering their circulation.

The Federal Reserve system manages coin distribution. Coin terminals, operated primarily by armored carrier firms, allow banks to deposit and withdraw coins. Approximately one-third of these 170 coin terminals are currently unavailable for both penny deposits and withdrawals.

Bank representatives argue that the closure of these terminals to small coin deposits is worsening the scarcity of pennies, as regions with a potential excess of pennies cannot distribute them to areas experiencing a deficit.

“As a result 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 said.

Retailers and stores are also facing legal complications due to the absence of pennies. Certain states and municipalities prohibit rounding up transactions to the nearest nickel or dime, as this practice could violate regulations designed to ensure that customers paying with cash, debit, or credit cards are charged the same item prices.

To sidestep legal action, merchants are adjusting prices downward. Although a couple of cents might appear insignificant, this accumulated change can become substantial across numerous sales. A representative from Kwik Trip, a convenience store operator in the Midwest, stated that they've been rounding down all cash purchases to the nearest five-cent increment. This practice is projected to incur an expense of approximately $3 million for the business this year. Additionally, some retailers are encouraging patrons to donate their change to nearby or associated charitable organizations at the point of sale, aiming to eliminate pennies from transactions.

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.

Canada declared in 2012 its intention to discontinue the one-cent coin, phasing out cash transactions involving pennies from 2013 onward, and continued to redeem and recycle these coins ten years later. The “decimalization” transition from British farthings and shillings to a decimal currency with 100 pence per pound spanned a significant portion of the 1960s and early 1970s.

Without congressional approval or regulatory directives for financial institutions, merchants, or state governments, the U.S. Ceased the circulation of the penny suddenly. The retail and banking sectors, which seldom unite in Washington on policies concerning point-of-sale transactions, are now urging the government to provide directives or enact legislation to resolve the problems stemming from the coin's scarcity.

“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.