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US Penny Shortage Forces Stores to Round Prices as Supply Dwindles
American businesses are struggling with a severe penny shortage after the Trump administration halted production earlier this year, leaving retailers scrambling to adjust cash transactions. With no federal guidelines on handling the scarcity, many stores have resorted to rounding sales to the nearest nickel, costing them millions in lost revenue.
Production Halt and Early Shortages
In February, President Donald Trump declared the penny "wasteful and too expensive" to produce, announcing on social media a push to "rip the waste out of our great nation's budget, even if it's a penny at a time." The U.S. Mint officially ceased production in May, with the Treasury Department initially projecting shortages would emerge in early 2026. However, the crisis arrived months ahead of schedule, as banks-unable to obtain pennies from federal reserves-left businesses without a supply.
Dylan Jeon, senior director of government relations at the National Retail Federation, noted the issue first surfaced in late August. "It's really impacting any business that deals with cash payments," he said. Without pennies, clerks face dilemmas when customers need exact change, particularly in cities like New York, where retailers are legally required to provide precise change.
Retailers Adapt with Costly Workarounds
Many stores have adopted rounding as a temporary fix, adjusting prices up or down to the nearest five cents. However, to avoid lawsuits and customer backlash, most opt to round down-sacrificing up to four cents per cash transaction. "You're talking about losing up to four cents for every cash transaction across multiple stores nationwide," Jeon warned. "It's unsustainable."
Convenience stores, heavily reliant on small cash transactions, are among the hardest hit. Kwik Trip, a major chain, announced it would round down to the nickel, estimating a $3 million loss this year alone. Jeff Lenard of the National Association of Convenience Stores noted the irony: "People don't want the penny until they can't get it back in change."
"These are people that don't have access to checking accounts and charge cards and banking services. You're hurting lower-income groups when you start rounding transactions."
Mark Weller, executive director of Americans for Common Cents
Economic and Logistical Challenges
The penny, in circulation since 1793, costs nearly four cents to produce-far exceeding its face value. While discontinuing it may save production costs, critics argue the move shifts financial burdens onto businesses and low-income consumers. Mark Weller of Americans for Common Cents warned that savings from ending penny production could be offset by increased demand for nickels, which cost nearly 14 cents each to mint.
Industry experts are calling for federal guidance on rounding practices, transaction protocols during shortages, and the broader role of pennies in commerce. "There will always be pennies out there," Jeon said. "They're just sitting in jars, lost in couches, or forgotten in pockets-not circulating."
Promotions and Public Appeals
Some retailers have launched campaigns urging customers to bring in spare pennies from home. Others now request exact change to minimize rounding losses. Yet without a unified approach, the shortage continues to disrupt daily transactions, leaving businesses and consumers in limbo.
