Penny shortage sparks a national math crisis
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The country's penny supply is collapsing far faster than expected — forcing retailers into rounding workarounds, cash-register math headaches and what some describe as a "legal minefield."
Why it matters: The end of penny production was supposed to simplify cash payments. Instead, it's colliding with the holiday rush and legions of math-averse Americans.
- Customers don't always understand what happens when $4.73 becomes $4.75.
- Stores are posting signs, retraining cashiers, spending millions on tech fixes and — in many cases — rounding down to avoid disputes, thus eating the cost.
A fast-accelerating penny shortage
Driving the news: Retailers say the national penny supply began unraveling months ago — and is now worsening by the day.
- "The growth of stores that are out of pennies is exponential," said Austen Jensen, senior executive vice president of public affairs for the Retail Industry Leaders Association (RILA).
- Thanksgiving week is among the year's busiest shopping periods — and one of the highest cash-penetration weeks, especially in grocery — making the timing even more disruptive, Jensen said.
Cutting pennies triggers rounding tax
The big picture: The U.S. Mint stopped making pennies this month — a move expected to save $56 million annually, but also triggering what the Richmond Fed calls a "rounding tax."
- Purchases ending in 3, 4, 8 or 9 cents round up; 1, 2, 6 or 7 round down.
- The Fed estimates consumers could lose about $6 million a year.
- The burden falls hardest on low-income and older Americans.
Yes, but: Jensen said a half-dozen companies have already exceeded the $56 million the Mint expects to save — in rounding costs, tech updates and other operational fixes.
Making sense out of cents
Zoom in: McDonald's told Axios some locations are experiencing shortages and may round totals up or down to the nearest nickel.
- "This is an issue affecting all retailers across the country, and we will continue to work with the federal government to obtain guidance on this matter going forward," the fast-food giant said.
- Some Wendy's and Burger King locations have posted rounding notices, and some franchisees are stockpiling pennies.
State of play: Some retailers have held penny drives — and Jensen expects more after the holidays.
- Giant Eagle told Axios its Nov. 1 "Penny Exchange Day" brought in 100 million pennies, redeemed for double-value gift cards worth $2 million.
Stores want rounding rules fast
Between the lines: RILA data shows the scale of shortages.
- Two-thirds of surveyed stores are rounding transactions to the benefit of consumers when pennies are unavailable.
Zoom out: The Food Industry Association told Axios the shortage creates legal and compliance challenges, especially for SNAP transactions that require exact pricing — making rounding legally tricky.
- Ten states ban rounding altogether, and federal banking rules also mandate exact payouts for services like paycheck-cashing.
- Without federal rounding rules, the penny's phaseout will remain chaotic — putting retailers at risk for lawsuits, SNAP compliance problems and higher card-fee costs as more shoppers ditch cash.
The bottom line: For anyone who prefers exact change — and to skip the math refresher — just use a card.
