Following the Federal Reserve's announcement to resume penny deposits, retail industry leaders offered cautious praise while warning the move falls short of solving the broader circulation problem. RILA's Austen Jensen noted that nearly one-quarter of surveyed retailers report over 1,000 locations without pennies, with two-thirds now rounding transactions in favor of consumers.
Retail industry leaders responded to the Federal Reserve's January 8 announcement to resume accepting penny deposits at coin distribution locations, offering measured praise while emphasizing that significant challenges remain.
Industry Response
Austen Jensen, Senior Executive Vice President of Public Affairs at the Retail Industry Leaders Association (RILA), issued a statement acknowledging the Fed's action while tempering expectations:
"It is welcome news to see the Fed is going to reopen certain distribution locations that may have pennies, but this should not be viewed as a solution to the broader circulation problem."
Survey Results Reveal Scope of Problem
Recent industry surveys paint a stark picture of penny scarcity's impact on retail operations:
- Nearly 25% of surveyed companies report more than 1,000 store locations currently without pennies
- Two-thirds of respondents are rounding transactions in favor of consumers (rounding down)
- Many retailers have implemented "keep the change" policies or charity donation options
- Some stores are purchasing pennies from employees and customers at a premium
Retailer Adaptations
Major retailers have adopted various strategies to cope with penny shortages:
| Retailer | Approach |
|---|---|
| Kroger | Asking customers for exact change; still accepting pennies |
| Kwik Trip | Automatically rounds down all cash transactions |
| Home Depot | Signs advising rounding up in customer's favor when no pennies available |
| Stewart's Shops | If customer owed one penny, they receive a nickel |
| Aldi, Goodwill | Rounding down |
Legal Concerns
Retailers expressed ongoing concern about litigation risk. Without binding federal rounding rules, businesses face potential class-action lawsuits over rounding practices, particularly in states with strict consumer protection laws.
"We need Congress to act," Jensen added. "The Common Cents Act would provide the legal framework businesses need to implement rounding consistently and fairly."
What the Fed Action Does—and Doesn't—Do
The Federal Reserve's decision to resume accepting penny deposits helps with:
- Recirculating existing pennies in the system
- Reducing regional shortages where pennies have accumulated
- Restart penny production
- Provide legal protection for rounding practices
- Solve long-term supply issues as pennies naturally exit circulation