Last November, the U.S. Mint produced its last penny.
With the cost to manufacture a penny nearly four times its worth, you can see why.
The decision to end production was made by the U.S. Department of the Treasury, which determined costs had risen to roughly 3.69 cents to make the coin.
While pennies are no longer being manufactured, the coins are still considered legal tender, and the Federal Reserve will continue to recirculate the estimated 114 billion pennies in existence. However, as with any major federal change, there have been ripple effects that impact everyone.
The Federal Reserve initially ceased accepting pennies at many of its coin distribution terminals, causing concern and reported shortages among banks and businesses. This has since been walked back, with distribution terminals continuing to accept the coins.
Another effect of the penny’s discontinuation is the “rounding tax” dilemma, as some refer to it.
Facing shortages of pennies for making exact change, businesses are having to round to the nearest five cents.
The Waycross Journal-Herald spoke with several banks in the community, looking to gain insight into the local impacts of the decision on pennies.
Lori Taylor, Branch Manager of Renasant Bank, said her institution hasn’t seen any sizeable difference in the usage of the penny. She reported they are “still able to supply pennies,” and there have been no major issues accommodating businesses. She added some customers also have come trying to sell their pennies.
Some of those sentiments were echoed by Georgia’s Own Credit Union.
“As the announcement to discontinue manufacturing of pennies is still relatively new, we haven’t seen an impact in our operations to date. We’re still accepting pennies on deposit, and have them to distribute upon request,” Georgia’s Own Market Services Leadership said. “This may evolve as the tender becomes further phased out, but at this time, we haven’t experienced any change in member behavior regarding this issue.”
PrimeSouth Bank bankers reported a different experience, noting a lack of penny deposits.
“No one is depositing pennies currently,” a spokesperson said. “The people that have a stockpile are keeping them.”
Added PrimeSouth Market President Ty Wright: “We’ve seen pennies used less frequently over time, which aligns with the broader shift toward electronic and digital payments.”
PrimeSouth bankers elaborated on the current state of the penny supply, stating, “We’re now limited to only ordering $25 a week, we used to go through about $250, so we’re very limited on how many we can give our local businesses.”
PrimeSouth’s bankers also added they’re supportive of this change, adding, “We’re looking forward to this new change without pennies.”
Wright gave his perspective on the matter, saying, “From a banking perspective, this is a manageable, long-term transition. Through strategic planning, we’ve been able to manage inventory and continue serving customers without disruption.” He continued, “We encourage business owners to talk with their banker about available options and support as payment methods continue to evolve.”
As for businesses dealing with the issue of rounding change, Georgia’s Own personnel stated they haven’t observed any impact from this.
Likewise, PrimeSouth bankers have not noticed any issues regarding rounding.
“We’re not having issues from the businesses rounding up due to their deposits being accurate,” they stated.
Added Wright: “Personally, I haven’t seen this cause a significant impact for businesses, especially since most already prefer electronic forms of payment. For cash transactions, the Treasury has provided guidance on fair rounding if it becomes necessary.”
The Waycross Journal-Herald attempted to contact several other local banks, but did not receive responses in time for publication.
