Brother, can you spare a dime? A nickel? A penny? A quarter?
National coin shortage ‘is not an urban legend,’ bank president says
Jim Schwendeman prefers to pay for groceries with cash and expects to get the correct change at the checkout line.
But that didn’t happen earlier this week at the Smith’s Food and Drug store at Juan Tabo and Academy NE, when he learned that there was a coin shortage and the cashier was going to round up the total for the dozen items he selected.
It wasn’t much, said his wife, Jane Schwendeman, “but he didn’t like that at all, so he left the groceries without paying and walked out.”
For the past week or two, signs have started appearing at grocery stores, automotive stores, restaurants and other retail outlets letting customers know that due to a coin shortage, purchases with exact change or with credit or debit cards would be appreciated whenever possible.
New Mexicans who in recent months have seen toilet paper
and hand sanitizer shortages because of the COVID-19 pandemic can now add the coin shortage to that list. And it’s not just in New Mexico. The phenomenon is occurring around the United States.
John Anderson, executive vice president of the New Mexico Bankers Association, said a more accurate description might be a “circulation slowdown.”
“What we’re finding is people who used to spend freely and use coins are basically not leaving their houses, so in many respects the situation is caused by the pandemic and the shutdown or restrictions on businesses,” he said. “It’s not that there isn’t a lot of coins in the system; it’s just that they’re not being circulated.”
Anderson said that because of COVID restrictions, people were not spending money and many businesses were closed or operating at reduced capacity. In response, merchants reduced their orders for coins from local banks, which in turn reduced their orders for coins from the Federal Reserve System. Simultaneously, the mint, where coins are manufactured, had staffing problems because of the pandemic, causing coin production to drop.
“In general, the lack of supply wasn’t an issue because there was a corresponding drop in demand,” Anderson said.
But as COVID restrictions were relaxed and more businesses began to open, merchants began increasing their orders for coins from local banks. Because the merchants had not been depositing coins during the shutdown, the banks didn’t have the coins to fill merchant orders. Signs asking customers to use exact change or pay with cards have been posted at all Satellite Coffee shops and Flying Star restaurants, owner Jean Bernstein said.
About 70% of her customers already pay with cards, and the other 30% have been given notice, but “we’ll short ourselves if we don’t have the change.”
Lonnie Talbert, president and chief operating officer of Southwest Capital Bank, said the coin shortage “is not an urban legend.”
His bank, like others, is limiting the amount of coins it is providing to customers, and many “have not been happy,” he said.
“It’s there. You can get coin; it’s just being limited, which is probably what should have been done initially with toilet paper and hand sanitizer,” he said.