The national penny shortage
In November, the U.S. Treasury ceased production of the penny, and the Federal Reserve Bank’s supply of the coins has since been in decline. Circulation problems have begun to arise, with some merchants reporting difficulty obtaining pennies from banks and coin suppliers. This shortage is leading to problems for cash-paying customers and merchants alike.
Rounding transactions
While the penny is being phased out of circulation, it is important to note that no law has been enacted by Congress defining how transactions should be rounded. This means that there is currently no federal requirement for rounding, nor is there Treasury guidance on how transactions should be handled when pennies are unavailable.
As a result, merchants unable to maintain a sufficient supply of pennies have found themselves navigating the costs and legality of rounding transactions. Just a few of the challenges with rounding transactions are:
- Merchants being out of compliance with state and local laws as well as minimum pricing requirements.
- Merchants rounding down to the nearest nickel face significant financial loss.
- Merchants rounding up to the nearest nickel expose themselves to potential lawsuits.
Updates from NACS
On September 30, NACS met with Treasury officials and sent a letter to the Senate Banking and House Financial Services Committees urging them to pass federal legislation to allow businesses to continue carrying out cash transactions as issues arise. The association continues to assess the situation and regularly publishes articles to keep the industry informed.
NACS Urges Congress to Address Penny Shortage
U.S. Mint Produces Final Penny, Retailers Navigate Shortage
As circulation problems persist, CHS Payment Solutions will continue to monitor government activity and remain in contact with our point of sale (POS) partners as they assess the best way to handle the situation. For information specific to your POS, we recommend contacting your POS help desk or Authorized Service Contractor (ASC). CHS Payment Solutions will provide our merchants with new information as it becomes available.
This article is intended to provide readers with information on the ongoing penny shortage in the United States. It is not intended to be used as a source for legal recommendations or business direction.
