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APUS retailers experience penny shortages after federal mint stops production in May, 2025, forcing businesses to round cash transactions to the nearest five cents (AP Photo/David Zalubowski, File) US businesses report difficulty obtaining pennies following the US Mint's decision to cease one-cent coin production in May, 2025, prompting retailers to round cash transactions to the nearest five cents. President Donald Trump announced in February that penny production was wasteful and too expensive, calling on social media to "rip the waste out of our great nation's budget, even if it's a penny at a time." The US Mint officially halted penny manufacturing in May.The Treasury Department initially projected shortages would begin in early 2026. Actual shortages emerged several months earlier than anticipated. Banks cannot obtain pennies from the federal government, preventing businesses from securing coins through traditional banking channels."We first heard about the issue in late August, early September," said Dylan Jeon, senior director of government relations with the National Retail Federation. "It's really impacting any business that deals with cash payments."Also read: America's penny crisis: How Trump's cost-cutting plan has sparked nationwide cash crunch and is hurting baStore employees lack clear procedures when cash registers contain no pennies for customer change. Many retailers implement temporary solutions by rounding purchase prices up or down to the nearest five cents, allowing customers to use nickels as the lowest available currency denomination.Live EventsLocal regulations complicate penny shortage responseSome cities, including New York, require retailers to provide exact change. Other jurisdictions prohibit cash payment amounts from differing from card payment prices for identical items, according to Jeon.To avoid legal action and customer complaints, numerous retailers choose to round cash transactions downward."You're talking about losing up to four cents for every cash transaction across multiple stores across the country," Jeon said. "It's unsustainable.""That adds up really quickly," said Dylan Jeon, senior director of government relations with the National Retail Federation.Businesses encourage exact change and penny collectionMany stores urge customers to pay with exact change amounts. Other retailers host promotional events encouraging customers to bring accumulated pennies from home for circulation.Convenience stores face particularly severe impacts from the penny shortage, said Jeff Lenard, spokesperson for the National Association of Convenience Stores.Convenience chain Kwik Trip announced it will round transactions down to the nickel, estimating costs up to $3 million ($2.3 million) for 2025.History of US coin discontinuationThe federal government has discontinued American coins previously, including half-cent, three-cent, and 20-cent pieces retired during the 1800s, Lenard said. The penny, which entered circulation in 1793, represents the first staple coin to cease production in recent history.Also read: Don’t toss your pennies—one could be worth $100,000"People don't want the penny until they can't get it back in change," Lenard said.Penny production costs nearly four cents per coin. Maintaining zinc and copper coins in circulation supports lower-income Americans who primarily use cash payments, said Mark Weller, executive director of Americans for Common Cents."These are people that don't have the access to checking accounts and charge cards and banking services," Weller said. "You hurting lower-income groups when you start rounding transactions."Government savings from eliminating penny production may be offset by increased nickel demand, Weller noted. Nickels carry five-cent value but cost nearly 14 cents to produce.Industry calls for federal guidance on coin shortageRetail industry observers indicate federal guidance is needed for businesses and consumers regarding transaction rounding procedures, shortage protocols, and coin management practices.Also read: Is the Bond market signaling a deeper crisis for the U.S. economy and fiscal policy?"There will always be pennies out there, it's just such a low-utilisation coin," said Jeon. "People forget about them in their pockets, they lose them in their couch, they're sitting in jars. Those are coins that aren't making it into circulation."Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel) Read More News onUS penny shortageretailers rounding cash transactionsUS Mint production haltpenny production costimpact on convenience stores (Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless (You can now subscribe to our Economic Times WhatsApp channel)Read More News onUS penny shortageretailers rounding cash transactionsUS Mint production haltpenny production costimpact on convenience stores(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) 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