The U.S. Mint has repeated pleas for Americans to help get coins back into circulation after the disruption caused by the CCP (Chinese Communist Party) virus. American businesses such as laundromats and vending machine operators are struggling with the shortage of coins in circulation due to reductions in brick-and-mortar retail transactions, increases in online shopping, and the increased use of contactless forms of payment.
The Mint has joined forces with the U.S. Treasury Department and Federal Reserve in its appeal to Americans to search their homes, vehicles, and workplaces for coins to ensure customers can pay the right price for goods and services, and that retailers have the coins to return the correct change.
Do you keep a coin jar? If so, now is a perfect time to use your coins➡️ spend them, deposit them, or exchange them for currency at financial institutions or take them to a coin redemption kiosk. https://t.co/ykdQXkxY9I #GetCoinMoving @USTreasury @ABABankers @CUNA @NAFCU @ICBA pic.twitter.com/lzfOMJ2A7d
— United States Mint (@usmint) August 15, 2020
In the early phases of the crisis, the Mint says it enacted measures to combat the spread of the virus, such as decreasing the number of employees per shift to enhance social distancing measures. According to a statement the Mint gave to Planet Laundry, production levels dropped by around 10 percent in April, and 20 percent in May, “We were able to fulfill the Federal Reserve’s May coin order by drawing down our coin inventory.”
Since May, the Mint has introduced mandatory overtime. It reached full production in June when it output 1.6 billion coins. From July to the end of the year it expects to produce 1.65 billion coins per month, far outstripping average coin production levels of 1 billion coins per month in 2019.
The Mint normally supplies a mere 17 percent of coins coming into circulation.
“In normal circumstances, retail transactions and coin recyclers return a significant amount of coins to circulation on a daily basis,” the Mint said in a statement. With retail sales lagging and many Americans deferring a range of consumptive activities, coins are not being returned to circulation at normal rates. The problem is one of circulation, the Mint says, and not supply.
“There is an adequate amount of coins in the economy,” the Mint said, “but the slowed pace of circulation has meant that sufficient quantities of coins are sometimes not readily available where needed.” Many Americans may be able to pay for goods using contactless payment methods, and the Mint encouraged consumers to pay for the items they buy with the correct change, if possible.
“For millions of Americans, cash is the only form of payment and cash transactions rely on coins to make change,” the Mint said. “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 coin supply problem can be solved with each of us doing our part.”
Coin Task Force
To combat the problem, the Mint and the Federal Reserve set up a Coin Task Force to help “get coin moving.” In addition to the founding bodies, the task force includes stakeholders such as armored carriers, banking and credit union associations, coin aggregators, and representatives from the retail industry.
The National Association of Convenience Stores (NACS) also sent a joint letter (pdf) to Treasury Secretary Steve Mnuchin and Federal Reserve Chairman, Jerome Powell last week to ask them to help spread the #getcoinmoving message.
If you have extra coins at home, please use them to make purchases— or deposit them at the bank or exchange them for cash. Help get coins moving! 🇺🇸
— Steven Mnuchin (@stevenmnuchin1) August 11, 2020
“The weak circulation affects most everyone, but the hardest hit are small cash-dependent businesses and those who are least well off,” said Hannah Walker, Vice President of the Food Industry Association (FMI). “For millions of Americans, cash is the only form of payment.”
NAMA is urging operators to ask customers to #SpendYourChange in #vendingmachine purchases to help alleviate the current coin-shortage due to #COVID19. Learn more from @usmint https://t.co/yjDZxuTUrB #coins pic.twitter.com/kT9SDXD3hU
— NAMA (@NAMAvending) July 24, 2020
According to the Federal Reserve, approximately six percent of American adults do not have access to normal banking services, and are regarded as being “unbanked.” In addition, another 16 percent are said to be underbanked, i.e., they have access to a bank account, but also have to use alternative forms of financial services, such as auto title loans or tax refund advances. Many such persons are unable to use contactless payment methods of any kind, and rely on cash and coins to buy essentials.
According to Guillaume Lepecq, transaction expert at the CashEssentials monetary ecosystem initiative, retailers have been coming up with innovative solutions to the shortage.
Lepecq says some retailers—including Wawa convenience stores, Dollar Tree discounters, and CVS pharmacies—are offering customer the option of rounding up their purchases to the nearest dollar, and then donating the ‘change’ to charity. He says supermarket giant Kroger is loading customers’ Kroger Plus loyalty cards with change, and is no longer accepting coins.
Other retailers such as 7-Eleven and Pilot are simply asking customers to pay with the exact change or use another payment method, such as their debit card, Lepecq says.