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Dollars & Sense: Are We Still in a Coin Shortage?

Dollars & Sense | Ben Luthi | January 11, 2021

By Ben Luthi

Ben Luthi has been a freelance writer since 2013, covering all things money and travel. His work has appeared in many major publications and financial websites, including U.S. News & World Report, The New York Times, Fox Business, Experian, FICO and more. Ben lives in Utah with his two kids, and loves spending his free time traveling, hiking and talking about credit cards.


The coronavirus pandemic has changed a lot about how people live and interact with each other. It’s also changed many of the ways we shop and spend.

Some of the spending changes we’ve seen in recent months contributed to the national coin shortage. Beginning in the summer, retailers began posting signs asking shoppers to pay in coins or provide the exact change. Some notified customers that if they didn’t pay the exact amount, they’d receive the balance in the form of a gift card instead of coins. 

In 2021, the coin shortage is still in effect, but things are getting better. Here’s what you need to know about the shortage and how to avoid potential issues at the cash register:


Why Is There a Coin Shortage?

When signs started going up notifying consumers about a coin shortage, people were confused. Some even incorrectly believed that coins were being removed from circulation.

But according to the Federal Reserve, the shortage isn’t due to fewer coins in circulation, but rather is due to a significant decrease in the use of coins by consumers in recent months.

When the pandemic began, scientists knew very little about how SARS-CoV-2 was spread. Many experts recommended cleaning surfaces frequently and told consumers to avoid touching objects that have likely been touched by other people. 

Coins fit that bill — money changes hands frequently, especially among consumers who prefer to use cash over debit and credit cards. What’s more, there was a seismic shift in consumer behavior from shopping in person to making purchases online and via delivery apps. In both instances, cash isn’t an option.

Finally, a lot of places where coins are used often, such as arcades, laundromats, and public transit stations, were shut down early in the pandemic, which added to the decrease in circulation among consumers who had them.

The result was that grocery stores, restaurants, and other merchants were handing out coins as change at a much higher rate than they were receiving them.


Why the Shortage Is a Big Deal

Many consumers may not have noticed much of a difference despite the national coin shortage. If you primarily use credit or debit when making in-person purchases, then the shortage may not have impacted you much, if at all.

But according to the Federal Deposit Insurance Corporation, more commonly known as the FDIC, roughly 5.4% of American households (roughly 7.1 million total) are unbanked, which means they don’t have a credit or debit card and rely solely on cash. 

Small businesses have also suffered because they don’t have the same systems in place as larger retailers to provide gift cards or other solutions in lieu of change. 


When Will Things Get Better?

Over time, the coin shortage situation has improved some. The U.S. Mint has worked overtime to increase the number of coins in circulation. Mint director David Ryder stated that the agency was on track to mint more coins in 2020 than in the last 20 years.  

Also, with retailers asking customers to provide exact change, they’ve closed the gap on how many they receive versus how many they hand out.

Some retailers and banks also brainstormed creative ways to bring in more coins. For example, SouthEast Bank offered to exchange cash for coins at no cost, and many Chick-fil-A locations offered customers free food in exchange for bringing their spare change.

So while we’re not out of the woods yet, the situation isn’t as dire as it was half a year ago. More retailers are now able to provide change, and banks have easier access to coins through the Federal Reserve, which manages the national coin inventory.

If you want to help speed up the recovery process and get coin circulation back to its previous levels, look for opportunities to cash in your coins. This can include taking them to your local bank, credit union, or grocery store cash machine to turn them into bills, using them to pay in exact change when you shop in person.


What are the Benefits of Debit, Credit and Digital Payments?

During the coin shortage, some companies noted the benefits of paying with debit and credit cards, as well as using digital wallets. In many cases, debit, credit and digital payments can be more convenient and less expensive. That said, the coin shortage has also shown the many benefits of having easy access to your cash when you need it.

However, as card payments continue to climb, cryptocurrencies become more ubiquitous, and more consumers become banked, we’ll likely continue to see alternative payment methods increase in the years to come.


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