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ACROSS AMERICA — Spare change that’s often found in the couch cushions, car doors and jars on top of dressers could be contributing to an unprecedented nationwide coin shortage.
The shortage has become one of the unexpected results of the coronavirus pandemic and related state shutdowns issued earlier this year.
Some businesses, such as convenience store chain Wawa, have required customers to pay with exact change or other methods of payment. Others, such as a number of Dunkin’ Donuts locations in Chicagoland, do not have that requirement but have signs posted urging people use their pennies.
But it’s a circulation issue, not a supply problem, officials with the United States Mint have said.
“I want to emphasize that the current situation is a coin circulation issue, not a coin supply issue,” Todd Martin, a spokesman for the U.S. Mint, told Patch.
The shortage was first confirmed by the Mint in June after it returned to full production following a coronavirus-related shutdown. A “strategic allocation of coin inventories” was issued by the Federal Reserve on June 11, and on July 10, the U.S. Coin Task Force was established.
It has not only affected laundromats, arcades and lemonade stands, either. The shortage has hampered business for the Tooth Fairy, too.
Jen Vicker, of Illinois, said her 10-year-old daughter woke up with a loose tooth and was worried the fairy wouldn’t be able to pay up in a recent story published by the Boston Herald and others.
So she wrote her a note: “Dear tooth fairy, you may already know this but there is a national coin shortage in America. You usually leave me dollar coins, but until this situation is resolved, I would like cash for my teeth. I apologize for the inconvenience.”
Even with the three-month shutdown earlier in the year, the Mint is on track to produce more coins in 2020 than any other year since the turn of the century, Martin said.
“The Mint workforce is working as hard as we possibly can to get newly produced coins into the economy,” he said. “Third-party coin processors and retail activity account for the majority of coins put into circulation each year.”
Statistics from the Mint show only 17 percent of the coins circulated in 2019 were newly-minted.
More recently, the Mint has introduced the #getcoinmoving social media campaign to promote American consumers to use exact change or credit or debit cards on purchases to prevent the issue from growing even more.
“We are asking for the American public’s help to get coins moving by using exact change when making purchases, taking your coins to financial institutions, or turning them in for cash at coin recycling kiosks,” Martin said.
But how did a coin shortage come about from the pandemic? And how will it end? Here are five facts on the issue as it stands in September:
How the shortage started. The supply chain that coins usually flow through has been interrupted during the pandemic, Federal Reserve Chairman Jerome Powell said during a House committee hearing on the issue, CNN reported in June. Specifically, the uptick in contactless deliveries and reduced in-person spending are ways the pandemic led to a coin circulation issue, a UPI report states.
Have there been coin shortages before? Yes, but none like this. “There is no comparison to previous events,” Michael White, another spokesman for the U.S. Mint, told the Washington Post earlier this month. There was a significant coin shortage reported in 1959 as a result of people hoarding silver dimes, quarters and half dollars in hopes of selling them. Previous shortages were short-lived as the supply was increased rather quickly.
The Mint’s plan. The U.S. Mint has been at full capacity since mid-June and producing coins at a faster pace than normal times. By the end of 2020, the Mint is expected to have produced more than 19.8 billion new coins, numbers in a Fortune report show. That’s 7.4 billion more than what was produced last year. Martin said 1.6 billion coins were produced in June, and about 1.65 billion in both July and August.
Who is affected the most? Small businesses and Americans with lower incomes, according to a Business News Daily report. Joseph Yaffe, co-owner of Gainesville Coins, is quoted in the report.
“Small businesses are hit hard by the coin shortage because they may have to turn away paying customers if they cannot make change," he said. "It also hurts the most economically vulnerable consumers, many of whom operate in a largely cash economy. In turn, that means there's a reduction in overall demand for whatever product or service a given small business provides." Coin-centered businesses like laundromats have also been hit hard, as have cash-only places that do not accept credit cards.
You can help. And not just by giving an 11 cent “tip” for an 89 cent cup of coffee. There’s very likely a jar of coins in the home that has been getting heavier over the years. When possible, start to circulate them back into the U.S. economy.
“Every little bit helps,” Martin said.