The penny, a coin that has been in American pockets for more than 200 years, is suddenly getting harder to find than anyone thought it would be. And it’s giving businesses all over the country a lot of trouble.
Since President Donald Trump decided to stop making the one-cent coin earlier this year, stores from gas stations to grocery stores are rushing to change how they do business. What seemed like a far-off problem just a few months ago has become an urgent crisis… one that could cost businesses millions of dollars.
The Final Order from the Treasury Marks a Historic Change
Background of the Decision
The U.S. Treasury Department made it official back in May 2025, announcing it had placed its final order for penny blanks, those copper-plated zinc discs that become the coins we all know. It wasn’t a big shock, though. In February, President Trump hinted at the move by writing on social media that we needed to “rip waste out of our great nation’s budget, even if it’s a penny at a time.”
Production Costs Analysis
Why? When you look at the numbers, it’s pretty easy to see:
- The Treasury Department says that it costs a huge 3.69 cents to make each penny in fiscal year 2024
- That’s right, almost four times what it’s worth
- The price had been going up steadily, going up more than 20% in 2024 alone
- Ten years ago, in 2014, it only cost 1.3 cents to make a penny
Implementation Timeline
The U.S. Mint finished making its last batch of pennies by June. By August, those last coins were already being sent to banks and armored vehicle service companies. The government thinks it will save about 56 million dollars a year just by lowering the cost of materials. If you’ll forgive the expression, that’s not a bad chunk of change.
Retailers Face Unexpected Shortage Timeline
Earlier Than Anticipated
This is where things get hard. At first, the Treasury Department thought that there wouldn’t be a lot of penny shortages until early 2026. They thought that since there were already billions of pennies in circulation, everyone would have plenty of time to get ready.
They were wrong.
Industry Response
Dylan Jeon, the National Retail Federation’s senior director of government relations, told reporters that businesses started to feel the effects much sooner than expected:
- “We first heard about the problem in late August or early September,” he said
- This is a problem for any store that takes cash.
Geographic Spread
The National Retail Federation, which speaks for big stores like Walmart, Target, Macy’s, and Old Navy, says that the penny shortage has spread to both cities and towns without any clear pattern. State restaurant associations have been getting calls from worried members. It’s no longer just a problem in certain areas; it’s a problem across the country.
Banks Rush to Limit Remaining Supplies
Federal Reserve Actions
Banks aren’t doing much better either. Troy Richards, the president and chief operating officer of Guaranty Bank & Trust Co. in Louisiana, talked about what happened when there was a sudden shortage:
- “We got an email from the Federal Reserve saying that penny shipments would be cut back.”
- “Little did we know that those shipments were already over for us,” Richards said
Impact on Banking Operations
Within two weeks, his bank’s stock of 1,800 pennies was gone. Now, his branches only keep a small amount of cash on hand for customers who need to cash checks. Banks have had to ration what little they have left because the federal government hasn’t sent them any new supplies.
Businesses That Are in Trouble Come Up With Creative Ways to Solve Their Problems
Giant Eagle’s Approach
Some stores have gotten, um… creative in their search for pennies. Giant Eagle, a grocery store chain in Pennsylvania, said that for one day only, customers could trade their pennies for gift cards worth twice as much as the coins:
- That’s right: if you bring in 100 pennies, you’ll get a two-dollar gift card
- Not a bad deal for people who like to save pennies
Sheetz’s Strategy
Sheetz, a family-owned chain of convenience stores that operates in several states, did things differently. “The U.S. Mint will no longer make pennies, so we are short on change!” signs posted at their Pennsylvania locations read.
The company is encouraging customers to:
- Pay with cashless methods
- Round up their purchases for charity donations
- Trade one dollar in spare pennies for a free self-serve drink
These deals may look like smart marketing, but they show something deeper: companies really need those copper-colored coins.
The Rounding Problem Makes Things Hard for the Law
The Dilemma
Retailers have a hard choice to make when they don’t have enough pennies to make exact change. Do they round up or down? That’s where the legal problems start.
Current Practice
A lot of businesses have begun rounding cash transactions to the next smallest denomination after the penny, which is five cents. But here’s the thing:
- Some states and cities have laws that say stores must give exact change
- For example, New York requires this
- In some places, it’s against the law to charge different prices for the same items when people pay with cash and credit cards
Business Impact
Most stores have chosen to round down instead of risking upsetting customers or breaking the law because they are stuck between what the law says and what is possible. Sounds like it would be good for customers, right? But it’s costing businesses real money.
Jeon said, “You’re looking at losing up to four cents for each cash transaction across various stores nationwide.” “That adds up really quickly.” For businesses that handle thousands or even millions of cash transactions every year, those four-cent losses per transaction can add up to a lot of money.
People Are Getting angrier and angrier because There Is No Federal Guidance
Frustration with Leadership
Retailers may be more upset about the lack of clear direction from Washington than the actual shortage itself. Retail groups said they were unhappy with the lack of direction from both the Trump administration and lawmakers.
Navigation Challenges
They’re basically making decisions that could have a big effect on their bottom lines without any guidance from the federal government:
- Should they round up, down, or to the nearest five cents?
- What if two states have laws that don’t agree?
- It doesn’t look like anyone in the government has answers
Industry-Wide Concerns
The National Retail Federation has been especially vocal, saying that all businesses that take cash payments are dealing with these issues at the same time. It’s not just small businesses; big chains with stores in many states are having to make their own rules for each state, and sometimes even for each city.
Legislative Efforts to Make Penny’s End Official
The Common Cents Act
The executive branch made the decision to stop making pennies, but Congress has been working on making the change official through new laws. The Common Cents Act was introduced on April 30, 2025, by:
- Representatives Lisa McClain from Michigan and Robert Garcia from California
- Senators Cynthia Lummis from Wyoming and Kirsten Gillibrand from New York
Bill Provisions
This bill, which has support from both parties, would officially end the production of pennies and require all cash transactions to be rounded to the nearest five cents:
- The law has specific rules for rounding based on the last digit of the transaction amount
- It’s important to note that the rounding would only apply to cash transactions
- Electronic payments, checks, and other similar methods would not be affected
Legislative Support
The bill’s sponsors said in a press release that “pennies are a waste of taxpayer money.” “Spending millions of dollars each year making coins that so few people actually use doesn’t make sense. President Trump’s idea should become law.”
Competing Legislation
Senators Mike Lee from Utah and Jeff Merkley from Oregon introduced competing bills called the Make Sense Not Cents Act the next day, on May 1:
- Like this bill, it aims to stop the federal government from spending money on making pennies
- Sponsors say it would save American taxpayers over 85 million dollars a year
Legal Tender Status
Both bills make sure that existing pennies are still legal tender, which means that people can still use them to pay for things if they want to. The law also lets collectors mint a small number of pennies for numismatic purposes, as long as they are sold at prices that cover all of the costs of making them.
The Decision’s Cost-Benefit Analysis
Quick Implementation
Even though it happened quickly, the decision to stop making pennies wasn’t made lightly. When you look at the numbers, the financial argument makes a lot of sense.
Production Cost Breakdown
As we said before, it costs 3.69 cents to make one penny in 2024. But pennies aren’t even the worst when it comes to making things inefficiently:
- It costs a shocking 13.8 cents to make each nickel, which is the five-cent coin that everyone is now rounding to
- That comes out to 11 cents in actual manufacturing costs and 2.8 cents in costs for running the business and getting the products to customers
Rationale for Elimination
So why get rid of pennies but keep nickels? Partly because the penny’s lower value makes the cost of overproduction even worse. Over the past few years, the penny has also become less popular. The numbers show the story:
- The U.S. In 2014, the mint made more than 9.36 billion pennies
- By 2024, that number had dropped to just 3.22 billion
Material Composition
The coins are made of 97.5% zinc and have a 2.5% copper coating. The cost of materials, especially zinc, has gone up, which has made production costs go up as well. When you add in the energy needed to mine and transport the metals, as well as the damage to the environment caused by mining and processing them, the case for stopping becomes even stronger.
Lessons from Other Countries Are Mixed
International Precedents
The US is not the first country to get rid of its smallest coins:
- Canada stopped making pennies in 2012
- Australia stopped making one- and two-cent coins decades earlier
Research Findings
Studies from these countries show that rounding cash transactions doesn’t usually cause prices to go up a lot or inflation. The effects of rounding, which can go up or down, tend to even out over time. Most transactions in today’s economies are done electronically, which gets rid of the rounding problem completely.
American Context
Despite this, the American retail market has its own set of problems:
- The U.S. still has a higher percentage of cash transactions than many other developed countries, especially in small businesses, convenience stores, and restaurants
- The fact that different states and localities have different laws about pricing and making change makes things even more complicated than they might be in other countries
Safety and Environmental Issues
Environmental Considerations
There are also environmental and health reasons to think about more than just the economic ones. It takes a lot of energy to mine and process zinc, which is what most modern pennies are made of. Stopping the production of pennies lowers the demand for these materials, which lowers their environmental impact.
Health Concerns
There is also a safety issue that isn’t as well known: zinc toxicity:
- Pennies made after mid-1982, when the metal used to make them changed from mostly copper to mostly zinc, can poison people if they are swallowed, especially kids and pets
- The zinc can dissolve in the stomach’s acidic environment, which could cause serious harm
- Dogs that eat pennies made after 1982 often die from severe hemolytic anemia
- This isn’t the main reason for stopping, but it’s something to think about
What Happens to Current Pennies
Legal Tender Status
It’s important to make clear that the penny is not being taken out of circulation or made invalid. All pennies that are still in circulation are still legal tender, which means that businesses must still accept them as payment.
Distribution Issues
The Treasury Department says that there are already billions of pennies in circulation, and they are “severely underutilized,” so there should be enough to go around for a long time. The issue is not a lack of resources, but how they are shared.
Consumer Impact
People can keep using their pennies for as long as they want. People who have been saving pennies in jars for years might suddenly think they are worth more:
- This is not because the coins themselves are worth more
- But because stores are actively looking for them through sales like the ones Giant Eagle and Sheetz are running
The Bigger Effect on the Economy
Scale of Impact
It may not seem like a big deal to lose a few cents on a single transaction, but when you add them all up, they add up to a lot in the retail sector. Think about a big chain of convenience stores that handles millions of cash transactions every year. If rounding down means that each transaction could lose up to four cents, the yearly cost could be hundreds of thousands or even millions of dollars.
Sector-Specific Challenges
Gas stations have to make very complicated changes because their prices often end in nine-tenths of a cent, like 2.999 dollars per gallon:
- Fast-food places with value menus that are carefully set to certain price points have the same problem
- Big-box stores that make very little money on many items can’t easily handle even small losses on each sale
Sustainability Concerns
The National Retail Federation has made it clear that the current situation “simply isn’t sustainable” for a lot of its members. Retailers are in a bad spot because there are no federal rules that set standard rounding practices, and no laws that protect businesses from state laws that conflict with each other.
How Politics and Partisanship Are Received
Bipartisan Support
Interestingly, both parties support getting rid of the penny, which is unusual in today’s divided political climate:
- Before Trump took office, Colorado Governor Jared Polis, a Democrat, had been pushing for the penny to be removed
- When Trump’s order was made public, he backed it up
Congressional Cooperation
The Common Cents Act has supporters from both parties in both houses of Congress. Republicans and Democrats seem to really agree on this one policy issue: the penny costs too much to make and doesn’t do enough to make it worth making more.
Focus on Implementation
Even people who don’t like the Trump administration have mostly agreed with this decision. Instead, they’ve focused on the lack of guidance for businesses and the way it was carried out.
Looking Ahead: Change and Not Knowing
Current State
There are still no signs that the penny shortage will end as we get closer to late 2025:
- Banks are still limiting how much of their dwindling supplies they can give out
- To get more coins from customers, stores keep trying out new sales
- And businesses all over the United States are still waiting for the federal government to tell them how to handle cash transactions
Need for Legislation
The passage of either the Make Sense Not Cents Act or the Common Cents Act would make things much clearer. Until then, stores are mostly making up their own rules, hoping they don’t break any state laws or make customers angry in the process.
Future Implications
Some people who watch the industry think that the lack of pennies could speed up America’s move toward cashless payments:
- If it gets too hard or expensive to make exact change, both businesses and customers might just choose cards and digital payments instead
- In that way, the end of the penny could lead to bigger changes in how Americans do business every day
Concerns for Vulnerable Populations
Others worry about the impact on populations that rely heavily on cash:
- The unbanked and underbanked communities that don’t have easy access to credit cards or digital payment systems
- For these customers, rounding policies and possible price changes could have a big impact on how much they can buy, even if it’s only a few cents at a time
The Bottom Line for Customers and Businesses
Current Reality
Right now, American stores are in uncharted territory. The pennies we used to leave in dishes at gas stations or throw into fountains now seem like very valuable things. Their absence is revealing just how much our retail infrastructure depended on them for smooth operations.
Business Challenges
Businesses have to balance the need to:
- Keep costs down, with the need to keep customers happy
- Follow the law with the need to get things done
Retail groups are very upset because they think the government made the problem and then left them to figure it out without giving them enough help or direction.
Consumer Perspective
On the other hand, people might want to look in those jars and piggy banks:
- Those pennies that are gathering dust might actually be worth something
- At least to the Sheetz or Giant Eagle in your area that needs exact change
- Also, everyone else might want to get used to cash transactions that end in fives and zeros, because pennies… Well, they’re becoming a part of history
Final Reflection
The big penny shortage of 2025 is a lesson for America: even small changes can have big effects. And sometimes you don’t know how much you depended on something until it is gone.
