Why Is There a Coin Shortage in America?

During the COVID-19 pandemic, the United States has been experiencing a shortage of coins in circulation. Learn why -- and what may help fix it -- in this episode of BrainStuff.

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Episode Transcript

Speaker 1 (00:01):
Welcome to brain Stuff production of iHeart Radio. Hey brain Stuff,
Lauren Bogelbaum. Here. At grocery stores, convenience stores, and hardware
stores across America, curious signs are popping up asking customers
to pay with credit cards, debit cards, or exact change.
Is it because cashiers don't want to handle physical dollars

(00:22):
and cents that could be contaminated with the coronavirus? Nope,
it's because the United States is currently experiencing a coin shortage.
So where have they gone? America's pennies, nickels, dimes, and
quarters haven't disappeared. The COVID nineteen pandemic has simply disrupted
the normal cycle of coin circulation. According to the U. S. Treasury,

(00:44):
there were forty seven point eight billion dollars worth of
coins in circulation as of April, which was actually four
hundred million dollars more than in April of nineteen. But
those coins are not moving through the economy like they
should be. The Federal Reserve gives several reasons as to
why this is happening. Banks and businesses nationwide closed their

(01:05):
doors during the lockdown phases of the pandemic, including cash
and coin heavy sectors like convenience stores, public transit, and laundromats.
The U S Mint also slowed its production of new
coins during the early stages of the pandemic, as staff
was reduced for safety reasons at the min's Philadelphia and
Denver locations. Even as the economy reopens, consumers are opting

(01:28):
for contactless payment and generally using less cash and coins,
meaning more coins are sitting at home in mason jars,
piggy banks, and under couch cushions. So what does this mean?
Retail stores are feeling the pinch of the inconvenience and
passing it along to their customers. The National Grocer's Association
and several other retail industry trade groups sent a strongly

(01:51):
worded letter to Federal Reserve Chair Jerome Powell and Treasury
Secretary Steve Manustion in late June, saying that the federal
rationing of coin shipments to banks quote threatens the functioning
of our member businesses and, by extension, the needs of
our customers. In their letter, the group's cited economic statistics
showing that cash is still very much king in certain

(02:13):
sectors and among certain consumer demographics. For example, between forty
five to sixty percent of sales at grocery stores and
convenience stores are cash payments. Nearly half of all transactions
of ten dollars or less are paid in cash, and
consumers with an annual household income of twenty five tho
dollars or less paying cash for forty of their transactions.

(02:37):
So what's the solution. The long term solution is to
wait for the economy to return to normal, at which
point coins will naturally flow back into circulation. But in
the meantime, the Federal Reserve and the U s Mint
are taking action. The Mint has ramped up coin production,
outpacing its usual one billion coins a month, with one

(02:57):
point two billion coins in June and one point three
five billion a month for the rest of according to
The New York Times. The Federal Reserve announced in June
that it was rationing out its coin inventory by sending
banks and credit unions smaller than normal coin shipments based
on historical demand. The Fed also convened an emergency US
Coin task Force, composed of government and industry leaders, including

(03:20):
banks and armored car companies. The task force is expected
to come up with a set of recommendations by the
end of July. One of the task forces early accomplishments
was to create the hashtag get coin moving, which banks
and credit unions are plastering across Twitter to encourage people
to cash in their piggy banks to get more coins
back in circulation. Today's episode was written by Dave Ruse

(03:47):
and produced by Tyler Klang. For more on this and
lots of other totally money topics, visit how stuff works
dot com. Brain Stuff is a production of iHeart Radio.
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