Toilet Paper Is Back, But Now We’re out of Coins…?

Toilet Paper Is Back, But Now We’re out of Coins…?

July 30, 2020         Written By Heaven Speirs

 

First, it was the toilet paper then a long list of “household” items started to go scarce. Now it’s nickels and dimes. The U.S. continues to face unexpected shortages in the midst of COVID-19.

Did the coronavirus cause a coin shortage in America? Is now the time to switch to a cashless society? Is there even a coin shortage, or is it just social media hype? Let’s look at the facts.

Yes, There Is a Coin Shortage in the U.S.

Rumors about the coin shortage are entirely true. On July 23, the U.S. Mint released a statement asking consumers to spent their spare change to help replenish the coin supply. “We ask that the American public start spending their coins, depositing them, or exchanging them for currency at financial institutions or taking them to a coin redemption kiosk.”

The Mint pointed out that many retailers and small businesses are struggling to accept cash right now because they do not have sufficient change for transactions. This is why social media is flooded with business signs asking customers to pay by card. Some businesses have gone as far as temporarily denying cash payments or requiring exact change for purchases.

What Caused the Coin Shortage?

The COVID-19 outbreak certainly contributed to the U.S. coin shortage. Typically, the coin supply is replenished every day because retailers and coin recyclers are continually putting coins back into the economy. When the pandemic started, a large portion of businesses slowed operations or shut down completely. The U.S. Mint also slowed coin production due to reduced staffing. Now businesses are reopening, creating a spike in coin demand.

Another contributing factor is the fear of using cash payments during the coronavirus outbreak. Back in February, the World Health Organization urged consumers to use digital or contactless payments instead of cash. The fewer hands that touch a payment source, the less likely the virus is to spread. Americans that would traditionally spend their coins switched to online payments or card transactions to protect their health. This reduced the number of coins in circulation and paved the way for the current shortage.

The Mint Says We Have Enough Coins – They Just Aren’t Circulating

The Mint emphasizes that this is not an issue with production. The agency states, “There is an adequate amount of coins in the economy, but the slowed pace of circulation has meant that sufficient quantities of coins are sometimes not readily available where needed.”

How You Can Help the U.S. Coin Shortage

You can use your spare change to pay for transactions as a way to get coins back into circulation. However, it is important to practice all safety protocols during this unprecedented time. Wash your hands frequently, and use hand sanitizer immediately after the transaction.

As an alternative, you could take your spare change to a bank or coin recycler to exchange for cash. This becomes a one-time transaction, rather than spending your coins at multiple locations. Most coin recyclers will charge a small fee for the exchange, but you should be able to cash your coins for free at your bank.

Will the Coin Shortage Force America to Go Cashless?

There is another layer to this situation, and that’s the potential to go cashless. Many citizens fear that the coin shortage is a precursor to a completely cashless society. The truth is, the country is far from eliminating cash from circulation. As of October 2019, 82% of Americans still carry cash every day. Moreover, there are multiple state and city laws prohibiting the denial of cash payments. Massachusetts has a law dating back to 1978 that prevents retailers from discriminating against cash buyers.

Cash isn’t going anywhere, but there is a noticeable shift toward digital and card-based payments. In the first quarter of 2020, Mastercard reported a 40% increase in contactless card transactions. This multi-month quarantine showed Americans just how much they could buy online vs. in stores. It could be the jumpstart to much higher card usage in the future.

 

 

The information contained within this article was accurate as of July 30, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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About Heaven Speirs

Heaven Speirs is a contributing writer for LowCards.com. She remains up-to-date with the latest developments in the credit card industry and the financial sector as a whole. Heaven has over 10 years of experience in online journalism, the bulk of which has been focused on personal finance. Heaven attended Oklahoma State University, where she discovered her talent for research and content creation. In her spare time, Heaven enjoys painting, playing poker, and spending time with her husband and three dogs.