CURRENCY Coin shortage hits retailers, laundromats, tooth fairy
A convenience store chain is offering a free beverage or sandwich in exchange for them. A laundromat owner drove 4 hours across state lines to get $8,000 worth. A young girl in Illinois wrote the tooth fairy saying she’ll gladly take dollars as a substitute if it helps.
There is a shortage of coins across the U.S., yet another odd side effect of the coronavirus pandemic. Quarters, dimes and nickels aren’t circulating as freely as they usually do because many businesses have been closed and consumers aren’t out spending as much.
The Federal Reserve announced in June that the supply system for coins had been severely disrupted. The U.S. Mint and Treasury Secretary Steven Mnuchin have urged Americans to use coins or turn them in to banks. As the economy recovers and businesses reopen, the coin supply is expected to normalize.
Meanwhile, retailers large and small have urged shoppers to use cards or exact change whenever possible. Some won’t provide change. Grocery giant Kroger Co. is still accepting cash, but offers customers the option to load their change onto loyalty cards to use on their next visit or to donate the balance to charity.
Convenience store chain Wawa offered customers a free beverage at some of its stores if people brought in $5 worth of coins, or a sandwich for $50 or more. Community State Bank, a regional bank chain in Wisconsin, even offered a $5 bonus for every $100 worth of coins that people brought in. They had to suspend it after a week due to overwhelming response.
As the shortage persists, it’s become clear that there are still some conundrums that only coins can solve.
“It’s at the minimum an inconvenience...at worst it’s a business challenge,” said Brian Wallace, CEO of the Coin Laundry Association, a trade group for laundromats.
About 56% of laundromats that serve the public take quarters as the only form of payment. And 89% take quarters as some form of payment, with cards, loyalty programs or mobile payments as an alternative, according to the trade group.
Laundromats rely heavily on coins, in part, because many of their customers are “unbanked” or “underbanked,” meaning they mostly or entirely use cash instead of cards to pay for things.
Daryl Johnson, who owns Giant Wash Laundry — a chain of 11 laundromats in the Minneapolis area — said his company normally buys anywhere from $4,000 to $8,000 in quarters a week for its change machines. But after the Fed began rationing distributions of coins, his bank said it might not be able to provide any.
“Obviously we were freaking out a little bit,” he said.
Johnson got creative: he offered to buy change from friends and family on Facebook. He put up signs in stores asking customers to bring in their own coins and adjusted his change machines to only accept smaller bills to limit outflow. He even drove more than 4 hours to Omaha to buy $8,000 on quarters from another laundry operator.
“It’s that or my businesses close,” he said.