Another surprising shortage caused by the COVID-19 pandemic? Not enough coins.
Many Americans, at least until recent days, have been staying home. They are mostly avoiding the use of cash, preferring credit or debit cards. That means no circulating of quarters, dimes, nickels and pennies that create such a satisfying jingle in pockets.
Without the coins being spent or people cashing in their piggy banks, coin supplies began to dwindle. Adding to the shortage was the necessity of slowing coin production at the U.S. Mint during the early days of the pandemic in an attempt to protect workers.
All of that created a problem for certain businesses that still depend on coins to function. Such things as parking meters, laundry machines, vending machines, public showers — even newspaper vending machines — all operate thanks to coins. The switchover to using debit cards to buy sodas or pay parking is not complete across the U.S.
Many consumers still depend on cash to make purchases. The shops they frequent, whether the corner grocery or a convenience store, need a supply of coins to hand back change. An inability to hand out exact change, at a time when profits are razor thin, could hurt the bottom line.
As a result of the shortage, the Federal Reserve is rationing coins. Banks are not receiving their full orders, which they in turn hand out to customers.
To make up the shortage, the U.S. Mint is shipping 1.2 billion coins during June and planning to increase the monthly shipment to 1.36 billion coins through 2020. That’s up from the typical 1 billion a month.
While likely a temporary situation, the shortage of coins is just another example of how pandemics upend normal ways of life. At the beginning of the crisis, back in March, consumers could not find toilet paper on the shelves or purchase disposable face masks. There still are shortages of hand sanitizer and wipes, as well as sharp increases in prices for cleaning products.
The supply chain — whether for coins or cleaning supplies — is not as reliable as consumers once believed. It’s a difficult lesson to learn, perhaps, but one worth remembering.
In the meantime, perhaps it’s time to gather those coins from around the house and see if the bank can cash them in. The coins you put in circulation could help small businesses keep handing out exact change, covering costs and ensuring a profit.
On the other hand, there’s this undeniable fact: At least some coins are expensive to manufacture. In 2018, the penny cost about 2.06 cents to produce. That’s right. Pennies cost more to make than they are worth. With some 7 billion pennies produced every year, making pennies is a money loser.
Its buying power has been reduced by inflation, too, so pennies are less useful than they once were, and the same could be said for dimes and nickels. Nickels also cost more to make than they’re worth, but dimes and quarters make money.
Previous attempts to stop the production of pennies have failed, but this cash shortage might lead to people to realize they don’t need pennies after all — another lesson from life during a pandemic.