Research from Forbes, Bank Rate, and The Washington Post.
Why Is There a Coin Shortage?
Why is there a coin shortage?
You’ve probably seen the signs at various retailers asking for exact change due to a United States coin shortage. Although this sight may be unnerving, especially during a global pandemic, be assured that the United States is not running out of money.
Rather than being considered as a coin shortage, it really should be known as a coin circulation shortage.
On June 11, the Federal Reserve acknowledged that the COVID-19 pandemic has disrupted the “normal circulation patterns for U.S. coin.”
Since the pandemic forced many retailers to close for months, coin circulation decreased. Even with some retailers remaining open during the first few months of the pandemic, many discouraged using cash that may spread germs from consumer to consumer.
In addition, during this time, the U.S. Mint (who produces coins) decreased new coin production because of measures put in place to keep its staff safe and healthy during the pandemic.
So with less coins being used to purchase items, and with retailers having less to deposit back to the Federal Reserve, combined with decreased production of new coins, this created a lack of coins available to be distributed.
The coin shortage is problematic for small businesses that may lose sales if only exact cash payments are accepted, the 56% of U.S. laundromats that only accept quarters, and for people who don’t have access to banks or credit or debit cards.
How do we solve this problem?
Since mid-June, the U.S. Mint has been operating at full production capacity, minting 1.6 billion coins in June, more than 1.65 billion coins in July and August and 1.4 billion coins in September. (This is up from 2019, when the Mint produced an average of 1 billion coins per month.)
And as more businesses are open and there are more consumers paying for items with cash, coin circulation should work itself out eventually.
However, there are several ways that you can help today! Grab your jar of spare coins off of your dresser and either spend them at your favorite retailer, or visit your local bank, a Southland Credit Union branch (our coin counter is completely free for Members), or grocery store to trade them in for cash.
It’s a win-win, you help the coin shortage and you get some extra spending money in return!
- Financial Moves To Make in 2021
- Your free credit score may not be accurate - here's why
- Considering buying out your lease?
- 3 Ideal Trips for an Extended Weekend
- 4 Ways to Plan for a Big Purchase
- How to send money with Zelle® safely
- About SCU
- Digital Banking
- How to
- Life Stages
- SCU Gives Back
- Security Center