Banks are begging for spare change: How long U.S. coin shortage could last
In the midst of a nationwide coin shortage, some retailers are asking for customers to use exact change, if possible, or even better, use a credit or debit card for payment. Wochit
Banks are begging you to break open your piggy bank, dig through your seat cushions and unload those coffee cans full of change sitting in the closet.
The COVID-19 change shortage has bankers all across the country asking customers to bring in rolled coins as a way to pump more pennies, nickels, dimes and quarters into circulation.
It’s quite a switch from a time when many banks didn’t want your spare change.
In the past few years, many big banks phased out services that would count your coins for you. Some,charge a 10% fee or so for non-customers to count their change. Other banks charge both customers and non-customers to count their coins.
Banks want you to roll up coins in paper wrappers yourself. Some banks may limit the dollar value of coins they’re willing to take.
But a lot has changed during the pandemic. Quite simply, we’re not throwing around our money like we used to ever since mid-March when huge chunks of the U.S. economy shut down in an effort to reduce the spread of the coronavirus.
Laundromats, coffee shops, bank branches, and other spots where coins regularly changed hands either closed doors or significantly trimmed back operations when COVID-19 limits went into place.
At the same time, the “U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees,” according to the Federal Reserve. Production has been ramped up.
Recirculated coins represent more than 80% of the supply; the rest involves new coins produced by the U.S. Mint.
Cash isn’t always king
Some retailers are encouraging the use of plastic, not paper currency, due to fears that currency could spread the disease. So theoretically, the pandemic could help boost cashless, digital transactions.
Even so, some small businesses still prefer cash payments and may be hurt by the coin shortage because they want to avoid the extra fees charged to merchants when customers pay with a credit card.
Demand for change picks up
The Fed began rationing coins this summer to deal with the shortage since demand is expected to pick up as businesses reopen.
The Federal Reserve is projecting that we’ll experience a gap between supply and demand that ranges from 2.3 billion to 3.5 billion coins each month through the end of 2020.
Nationwide, more than 4 billion coins were deposited — or recirculated — each month in the beginning of 2020, according to the Michigan Bankers Association.
The numbers plummeted by more than half to essentially less than 2 billion beginning in April.
The Federal Reserve has formed a U.S. Coin Task Force to “identify, implement, and promote actions to address disruptions to coin circulation.”
Retailers craft their own strategies
We’re seeing all sorts of signs at the cash register, as retailers take creative approaches to dealing with the shortage.
Dollar Tree posted signs at the door stating: “Dollar Tree will purchase any rolled coins you want to exchange for cash.”
A few customers have walked in the door with some coins wrapped in rolls to exchange for paper currency.
The Dollar Tree, which also owns Family Dollar stores, asks customers to pay by debit or credit card or use exact change to cover a purchase when possible.
Kroger said it can now load coin change onto a customer’s loyalty card so the shopper can use that extra change on the card during the next trip for groceries.
Kroger also asks customers if they want to round up a purchase to an even number to avoid a need for change and support The Kroger Co. Zero Hunger 5/8 Zero Waste Foundation, a public charity.
Kroger is also providing coin change at lanes in the store that have coins available, Hurst said.
Self-checkout registers at many retailers may now only allow purchases with plastic cards and no longer offer change.
Spare change can supplement any budget during uncertain economic times, too. Yet some traffic was down at coin counting machines too.
During the pandemic, Coinstar kiosks remained available but foot traffic at supermarkets and other locations was down so fewer people were exchanging coins, according to a statement from Jim Gaherity, CEO of Coinstar.
“As lockdowns end, coin transactions and volumes through Coinstar kiosks are growing and, accordingly, we’ve been making more frequent coin pick-ups to help get coins back in circulation,” Gaherity said.
If your hours are cut at work, it may be a good time to reconsider letting unused coins just sit there. It’s best to avoid any fees, though, if using any coin counting machines.
Coinstar kiosks offer eGift Cards in exchange for coins with no extra fee. Otherwise, you could face an 11.9% service fee to convert the coins to paper; fees may vary by location.