Banks and retailers across the United States are experiencing a severe penny shortage following the Treasury Department's decision to halt production earlier this year. The shortage, which began in late summer, is creating significant challenges for commerce, with stores unable to provide exact change and banks rationing pennies for customers. Industry leaders are calling for federal guidance as the crisis worsens heading into the holiday shopping season.
The United States is experiencing a widespread penny shortage following the Treasury Department's decision to halt production in 2025, creating significant challenges for commerce across the country.
Shortage Worsens as Holiday Season Approaches
The penny shortage, which began in late summer, is worsening as the nation enters the holiday shopping season. After the Treasury placed its final order of penny blanks in May, the last pennies were minted in June and distributed by August. Banks are now rationing pennies while merchants struggle to provide exact change.
President Trump announced the decision on February 9, 2025, citing production costs of 3.7 cents per penny. The government expects to save $56 million annually.
Major Financial Impact on Retailers
Kwik Trip, a Midwest convenience store chain, expects to lose roughly $3 million this year from rounding down transactions to avoid lawsuits. Sheetz became so desperate it briefly offered free sodas to customers who brought in 100 pennies.
"It's a chunk of change," said Dylan Jeon, senior director of government relations with the National Retail Federation.
Troy Richards of Louisiana-based Guaranty Bank & Trust Co. said his bank's $1,800 in pennies were gone in two weeks after the Federal Reserve curtailed shipments. "Little did we know that those shipments were already over for us," Richards said.
Distribution System Breakdown
Roughly a third of the 170 Federal Reserve coin terminals are now closed to penny deposits and withdrawals, preventing surplus pennies from reaching areas with shortages. The U.S. Mint issued 3.23 billion pennies in 2024—more than double that of quarters—but pennies rarely recirculate. Americans hoard them in jars or use them for decoration.
Legal Challenges Force Rounding Down
In some states and cities, rounding up transactions violates laws requiring equal treatment of cash and card customers. This forces retailers to round down and absorb costs themselves. Some stores are asking customers to donate change to charity instead of receiving pennies.
Industry Demands Federal Guidance
Both retail and banking industries are demanding clarity from Washington.
"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. "We don't want the penny back. We just want some sort of clarity from the federal government."
The Common Cents Act, pending in Congress, calls for cash transactions to be rounded to the nearest nickel. While businesses support the proposal, rounding up could be costly for consumers.
Abrupt Transition Unlike International Examples
Other countries that eliminated small coins did so gradually over years. Canada announced its one-cent elimination in 2012, began transitioning in 2013, and continued redeeming coins for a decade. Britain's decimalization process took much of the 1960s and early 1970s.
The U.S. removed the penny abruptly, without Congressional action or regulatory guidance for banks, retailers, or states. The Treasury Department did not respond to requests for comment on guidance for the shortage.