In late 2025, the Treasury Department confirmed that the U.S. Mint had stopped producing new pennies for circulation. In a public FAQ, officials explained that the decision was driven by simple economics: it now costs more to make a one-cent coin than the coin itself is worth, making continued production impractical.
Importantly, pennies have not disappeared. The Treasury has emphasized that they remain legal tender, and the billions of pennies already in circulation can still be used. But with no new coins being added, the supply now relies entirely on existing pennies continuing to move through the system. Just a few months in, that slowdown is already starting to show.
According to the National Restaurant Association, the challenge isn’t consumer behavior, it’s circulation. The Association reports that much of the coin infrastructure, which is largely operated by private businesses, began limiting or stopping penny deposits and disbursements altogether. As a result, pennies were effectively getting “stuck,” leading to growing shortages for businesses that rely on regular coin movement.
The Association noted that roughly 60% of these operations were no longer moving pennies at all. For retailers and restaurants, that means fewer coins coming back into the system and less reliable access to change.
Recognizing the issue, Federal Reserve Financial Services took a step in early 2026 to help improve circulation. Beginning January 14, the Federal Reserve resumed accepting penny deposits from banks and credit unions at commercial coin distribution locations, reversing earlier restrictions that were put in place during periods of low inventory. The goal, according to the Fed, is to encourage existing pennies to flow back into the banking system and ease circulation bottlenecks. Officials also indicated they will continue monitoring coin activity and evaluate additional options if needed.
For retailers, the effects are already becoming tangible. With no new pennies entering circulation and existing coins moving more slowly, many stores are finding it harder to make exact change. Cash-handling routines that worked for decades are now being revisited, prompting conversations about rounding, point-of-sale systems, and how to communicate changes clearly and confidently with customers.
To help businesses and consumers navigate cash transactions when pennies aren’t available, the Treasury Department recently released a set of FAQs. The document walks through several examples of how rounding might work at the register, including a “simple rounding method” that rounds cash totals to the nearest five cents.
It’s worth noting, though, that the Treasury Department is careful to frame this as guidance, not a mandate. The FAQs make clear that the information is non-binding and doesn’t override any local, state, or federal laws.
At the same time, the National Grocers Association (NGA) is calling for more consistency nationwide. The organization is advocating for the passage of the Common Cents Act, which would establish a single federal approach to rounding by preempting local, state, and federal regulations on the issue. They have also joined a broad group of food industry leaders in calling on the U.S. Department of Agriculture (USDA) to provide immediate guidance to Supplemental Nutrition Assistance Program (SNAP)-authorized retailers, as the Treasury Department's rounding guidance conflicts with SNAP equality provisions.
“Independent grocers are committed to ensuring compliance with all federal regulations and laws while continuing to serve their customers fairly,” said Max Wengroff, NGA senior government relations manager. “However, the abrupt halt in penny production has created operational and compliance challenges for stores across the country. Without clear guidance from USDA, retailers face uncertainty about how to remain compliant with SNAP rules while managing a very real coin shortage.”
NGA points out that the Treasury Department's guidance, while helpful, still leaves retailers operating without clear national standards. Until that changes, the association recommends a practical step retailers can take right now: make sure customers understand how cash transactions are handled by clearly posting signage throughout the store.
Across the board, industry groups agree on one thing: clear communication goes a long way. NGA emphasizes signage as a simple way to set expectations, while the National Restaurant Association has encouraged the Treasury Department to consider temporary rounding rules to help “cut friction between business owners and customers,” especially during busy shopping periods like the holidays.
Taken together, these recommendations highlight an important theme: when policies are evolving and standards aren’t yet settled, transparency helps build trust and keeps day-to-day operations running smoothly.
At Harvest Market, a two-location grocery store serving Fort Bragg and Mendocino, California, the penny shortage has quickly become a real, day-to-day challenge. VP Jennifer Bosma, a 2026 IGA USA Centennial Retailer of the Year, shared that her bank was only able to provide one roll of pennies per day, while her stores were using about $25 in pennies per week at one location and roughly $50 at the other. That gap made it hard to keep registers reliably stocked with change.
But that's when Bosma realized that everybody in her area has a penny jar. So, she decided to turn this into a win-win solution with an initiative she called the “Penny Derby.” For the Derby, customers were invited to donate spare pennies in-store to their favorite charity.
Bosma's setup was simple. She took four large water jugs and labeled each with the name of a local nonprofit: the Mendocino Coast Humane Society, the Redwood Coast Seniors Center, the Mendocino Coast Children’s Fund, and the Fort Bragg Food Bank. Then, she topped each with a lid with a slot large enough for a penny to fit through.
Shoppers simply dropped their pennies into the jar of the organization they wanted to support. To add a little extra motivation, Harvest Market also promised to write a check for an extra $500 to the nonprofit that collected the most pennies. In the end, the Humane Society came out on top, and the four organizations earned over $900. As an added bonus, Bosma now has a nice stockpile of pennies to pull from.
If you would like to hold your own Penny Derby, Bosma recommends asking the selected nonprofits to promote the effort through their own email lists and supporter networks to amplify the message. She also recommends purchasing a basic coin-rolling machine to make handling donations much easier. Finally, be careful when emptying the jars, as she found several stray bits, including thumbtacks, mixed among the coins.
In addition to the Penny Derby, Bosma suggests working with your bank to purchase bulk bags of pennies from the bank’s coin machine when available.
The penny may only be worth one cent, but its retirement causes real challenges.
Until national standards are established, businesses will continue operating in uncertain territory. That’s why advocacy efforts from organizations like the National Grocers Association and the National Restaurant Foundation matter so much. Their work isn’t just about coins — it’s about protecting the retailers who serve their communities every day.
And for now, the retailers most likely to navigate this moment successfully will be those who, like Jennifer Bosma, approach the challenge with creativity, clear communication, and a strong connection to their communities.