​Keep the Change: How the U.S. Coin Shortage is Impacting Consumers

Two weeks ago, after learning that my two teenage children will be home schooled for at least the beginning of the next school year, I decided for all our sanity, my family needed a road trip. I’m fortunate enough to live in Northern California, giving me and my children access to beautiful rivers, lakes, mountains, and the Pacific Ocean. All within a few hours drive.  My kids have an affinity for Santa Cruz and suggested it, so we packed up the Suburban for a road trip.   

After a few hours’ drive, we took a short hike through the Henry Cowell Redwoods, then off to Cowell Beach near the famous Santa Cruz Beach & Boardwalk to boogie board and fly kites. Upon arriving and parking, I realized I have no change for the parking meter. It doesn’t take credit cards – only coins! I did have dollar bills, but I’d need a lot of coins to get myself an afternoon on the beach. One quarter gave me under 15 minutes. 

Fortunately, I saw a few change machines nearby and slip a dollar in, only to have it spat back out at me. Out of service. Next machine, out of service.  I decide to try a nearby convenience store where the clerk says, “Sorry, we aren’t providing change. There’s a coin shortage going on. Only credit or debit cards.”  

I eventually had to move my car and pay a private lot for the parking – $15.00 (on my card) plus the price of the long walk back to the beach.  Everywhere we visited, no cash was accepted. I thought it was strange, but I considered the fact that we’re currently in the midst of a pandemic, so it’d seem reasonable that people aren’t going out (and if they do, they don’t want to use cash). Perhaps a credit card is currently the better option for the times we’re in?

Reversing the Coin Shortage Disruption

As I arrived back home into my own community, I began to see the same pattern. “Credit card/Debit card only – no cash” or signs that said, “We need coins”. As I scrolled through social media, I saw the beginnings of a conspiracy theory making its rounds: “They are trying to make us a cashless society” and talk of a “New world order.”

I did a little research to find out what might be the cause. In late July, the federal chair Jerome Powell held a news conference and addressed the issue. 

“The quantity of coins is going up, but was adequate before the pandemic. The problem is the circulation kind of stopped because stores were closed, banks were closed, customers weren’t spending,” Powell said. “The coins stopped moving in the system so we’ve been working ever since that began to happen—we saw it happening right away. We’ve been working to try to reverse that disruption in the supply chain and restore normal circulation for our coins.”  

As a consumer, this makes sense. I believe people want to keep their physical coins and bills.  Some for sentimental purposes, others for privacy – keeping eyes away from a record of their purchases or locations. It’s in the same realm as wanting to keep local, physical copies of data away from the prying eyes of connected networks, and because I’m in the business of protecting data, I can relate to privacy concerns. 

Pressed penny from Santa Cruz, CA

Is Cash Necessary?

For those of us who do want to keep our change, we’re faced with a push from the government, U.S. mint and banks to try and fix the unseen issue that has arisen from the COVID–19 pandemic. The Federal Reservice created a U.S. Coin Task Force, and most recently, banks will pay you for your extra coins. 

There’s a reason we need cash. Think of the impact that a coin shortage has on the homeless. Regardless of how our own lives are set up, there are many people in the U.S. that don’t have a bank account or a credit card. In 2017, approximately 6.5 percent of U.S. households did not have a primary bank account. That translates into roughly 14.1 million adults who rely on physical cash.  

There has also been a trend of cash-only businesses popping up around the country, wanting to avoid processing costs, extended wait time to receive the money, and unexpected chargebacks due to an unhappy customer or fraudulent charges. For an SMB who’s scraping by, a cash–only business is a necessity. 

I hope this blog ages well and my story encourages others to share their experiences with the coin shortage. I do like my physical coins and bills and I’m of the sentimental type about our U.S. currency.  

If coins are gone, the penny press machines in Santa Cruz and all around the world would be out of the job. What will we throw into the wishing well? Gone will be the coin behind the ear trick your uncle used to amaze you with at family gatherings, and the dime toss at the fair, just a memory.