Businesses across the United States are grappling with a penny shortage after the U.S. Mint halted production, forcing many to round cash transactions and raising concerns about financial losses and consumer fairness. This disruption stems from the Trump administration’s decision to end minting of the one-cent coin earlier this year, aimed at cutting costs, but shortages have emerged sooner than anticipated, impacting retailers nationwide.
The penny shortage intensified when the U.S. Mint officially stopped producing the coins in May, with the Treasury Department initially predicting shortages would begin in early 2026. However, by late August and early September, banks and armored vehicle services reported difficulties distributing pennies, leading to localized supply issues. President Donald Trump had cited the coin’s production cost—nearly four cents to make one penny—as wasteful, calling for its elimination to save government funds.
In response, businesses from convenience stores to major chains like McDonald’s and Kroger have adopted rounding practices for cash payments, adjusting totals to the nearest five cents. For instance, a purchase of $12.06 might be rounded down to $12.05, while $9.39 could become $9.40, depending on the retailer’s policy. This approach, while temporary, aims to manage the scarcity without halting transactions, though it varies by location and lacks uniform federal guidelines.
The impact is particularly acute for cash-heavy businesses, such as convenience stores, where Kwik Trip estimates rounding could cost up to $3 million annually. Retailers are urging customers to use exact change or switch to cashless payments, but this shift disproportionately affects lower-income Americans who rely more on cash. Advocates like Mark Weller of Americans for Common Cents warn that rounding may harm these groups, as they have less access to banking services and could face cumulative financial strain.
McDonald’s, among other companies, has confirmed that some locations are rounding transactions, emphasizing that most payments are already cashless via cards or apps. The fast-food giant is working on long-term solutions and seeking government guidance, reflecting a broader industry call for clarity. Similarly, the National Retail Federation highlights that without standardized rules, businesses risk lawsuits or customer complaints, especially in cities like New York that mandate exact change.
Economically, the penny’s demise could have mixed effects; while ending production saves the government money, it may increase demand for nickels, which cost about 14 cents to produce. Historical precedents, such as the retirement of other coins in the 1800s, suggest transitions are manageable, but the penny’s long history since 1793 makes this change more noticeable. Retailers are also encouraging penny recycling through promotions, hoping to bring dormant coins back into circulation.
Looking ahead, the shortage underscores the need for federal intervention to establish consistent rounding policies and support a smooth transition. As pennies remain in jars and pockets, their low utilization exacerbates the supply crunch, prompting discussions about the future of U.S. currency. Ultimately, this event highlights broader shifts in payment habits and economic equity, with implications for how society values small denominations in an increasingly digital economy.