Why is there a coin shortage?
U.S. Mint: Virus closures have led to lack of change circulation
LEWISTOWN – At many establishments, signs declaring a shortage of coins from the Federal Reserve have left some people with a choice regarding change from a cash transaction—pay with a card, donate the change to a charitable cause or accept the change on a gift card of some type.
But what has caused the coin shortage?
According to the U.S. Mint, the entity that manufactures America’s change, the impact of COVID-19 has resulted in the disruption of the supply channels of circulating pennies, nickels, dimes and quarters that Americans and businesses use in their day-to-day transactions.
In normal circumstances, retail transactions and coin recyclers return a significant amount of coins to circulation on a daily basis. However, precautions taken to slow the spread of the virus – including the closure or reduction of capacity for many businesses — have resulted in reduced retail sales activity and significantly decreased deposits from third-party coin processors, resulting in increased orders for newly minted coins produced by the U.S. Mint.
Third-party coin processors and retail activity account for the majority of coins put into circulation each year. In 2019, the Mint contributed 17% of newly-minted circulating coins paid into the supply chain, with the remainder coming from third-party coin processors and retail activity.
The Mint says there is an adequate amount of coins in the economy, but the slowed pace of circulation has meant that sufficient quantities of coins are sometimes not readily available where needed. The Mint is asking for the general public’s help in returning coins to circulation by doing things such as paying with exact change and returning spare change to circulation.
The Mint says until coin circulation patterns return to normal, it may be more difficult for retailers and small businesses to accept cash payments, which is the only form of payment for many Americans. The Mint has asked the public to spend their coins, depositing them, or exchanging them for paper currency at financial institutions or a coin redemption kiosk.
Among the businesses most affected seem to be convenience stores and fast-food restaurants due to the high percentage of cash transactions.
Sheetz has said that while the shortage isn’t at an emergency level yet, it’s hoping by being proactive, it can avoid it getting that far.
“We’re asking people if they want to round up their bill or bring their own coins and cash in to donate it will add some coins to the system,” Sheetz spokesman Aaron Ruffner told MetroNews of Charleston, W.Va., making clear a donation is not mandatory. “That is fully optional. All of this is fully optional. We want to be very clear that we are not in an urgency situation with the coin shortage. We just wanted to get out some proactive tips so our customers could help us.”
While supplies last, those paying with cash at Sheetz can still receive change.