WASHINGTON–After 238 years, the last U.S. penny has been minted, creating challenges for consumers, retailers and credit unions alike.
The last penny was minted Wednesday afternoon at the U.S. Mint in Philadelphia and was overseen by Treasury Secretary Scott Bessent and Treasurer Brandon Beach.
The Trump administration had announced earlier this year it would cease minting the penny, which costs four cents to make. Stopping production of the penny will save the government $56 million a year.
As CNN noted, the once valuable coin was enough to buy “penny candy” like gumballs and feed parking meters or toll booths, but today the penny lives mostly in coin jars, junk drawers or “leave a penny/take a penny” trays.
But for credit unions and retailers, many financial transactions, paychecks, payments and goods still involve prices involving pennies, and that has meant the need to devise policies in response.
What CFOs are Saying
As the CU Daily reported here and here earlier this year, CFOs at credit unions shared some ideas for how they plan to respond, including rounding numbers to the nearest nickel.
“When we look at the future of currency, as a whole, and its evolution over time, I see us moving more towards digital as the standard. We have been playing there for years, with wires, debit, and credit cards and direct deposit,” Christine Messer, chief financial officer with Heritage Family Credit Union in Rutland, Vt., told the CU Daily. “Right now, in the GENIUS Act, the U.S. government is trying to get a regulatory framework around the stablecoin. This is landmarking for financial institutions because it could allow them to advance deeper into digital currency. That said, the coin could become less relevant to daily operations in a financial institution in the future.”
For traditional currency, Messer expects the U.S. to follow the lead of countries that have already stopped producing the penny, and “resort to rounding.”
“I think retailers will start to shift pricing to whole numbers, like a zero or five, to simplify the checkout process,” Messer said.
Other CFOs interviewed by the CU Daily shared numerous other resonse strategies.
The Cost of Rounding
Rounding to the closest nickel will cost consumers about $6 million a year, according to a July study by the Federal Reserve Bank of Richmond. That is fairly modest, coming to about five cents each across 133 million American households.
And rounding is not a national solution, as four states – Delaware, Connecticut, Michigan and Oregon – as well as numerous cities, including New York, Philadelphia, Miami and Washington, D.C., require merchants to provide exact change, according to the National Association of Convenience Stores (NACS).
A spokesperson for the NACS said the group is calling for legislation that allows retailers to round purchase prices up or down.
Responding to Shortages
Meanwhile, in recent months, the United States is running out of pennies and financial institutions and retailers across the country are taking various steps in response.
Retailers are also attempting to respond in different ways to the penny shortage. The convenience store chain Sheetz briefly ran a promotion offering a free soda to customers who bring in 100 pennies. The chain Giant Eagle collected pennies and offered $1 for every 100 turned in, plus a $1 gift card, with the grocer collecting 100 million pennies.
Many other stores have called on shoppers to pay in exact change.
“We have been advocating abolition of the penny for 30 years. But this is not the way we wanted it to go,” NACS’ Leonard told the AP.
To avoid lawsuits, the report said most retailers have been rounding down, and while that two or three cents may not seem like much, that extra change can add up over tens of thousands of transactions. A spokesman for Kwik Trip, the Midwest convenience store chain, told it has been rounding down every cash transaction to the nearest nickel, a move that’s expected to cost the company roughly $3 million this year.
Another Factor at Work
There is another factor at work, as well, according to the report, which noted the distribution of coins is handled by the Federal Reserve system. Several companies, mostly armored carrier companies, operate coin terminals where banks can withdraw and deposit coins. Roughly a third of these 170 coin terminals are now closed to both penny deposits as well as penny withdrawals, the AP reported.
Bank lobbyists told the news outlet these terminals being closed to penny deposits is exacerbating the penny shortage, because parts of the country that may have some surplus pennies are unable to get those pennies to parts of country with shortages.
About the Penny
The penny was one of the nation’s first coins, first minted in 1787, six years before the Mint itself was established.
Benjamin Franklin is widely credited with designing the first penny known as the Fugio cent. Its current form arrived in 1909 on the centennial of Abraham Lincoln’s birth, when it became the first American coin to feature a president.
