The U.S. is struggling to make change.
No, not a fundamental behavior shift, I’m talking about change from the cash register.
Coins have vanished during the COVID-19 shutdown.
A big reason is that there are fewer coins in circulation.
Due to lockdown restrictions and business closures, people have been spending less money.
In turn, less cash and coins are being circulated.
U.S. Federal Reserve Chair Jerome Powell said, “What’s happened is that with the partial closure of the economy, the flow of coins through the economy has kind of stopped.”
Some stores are asking customers to pay with the exact amount of cash and coin.
Or they ask customers to use a card so that they don’t have to give out the scarce amount of change they have.
The convenience store chain Wawa is asking customers of its 850 outlets to use exact change.
Places like laundromats and gas stations have been hardest hit by the coin shortage.
Another reason for the shortage is the U.S. Mint’s decreased coin production.
The decrease is due to safety measures put in place to protect employees of the mint.
And this is causing the Federal Reserve’s coin inventory to drop below normal levels.
The Federal Reserve said, “Although the Federal Reserve is confident that the coin inventory issues will resolve once the economy opens more and the coin supply chain returns to normal circulation patterns, we recognize that these measures alone will not be enough to resolve near term issues.”
To help shortage, the Federal Reserve will work with the U.S. Mint to increase coin production.
Banks are being encouraged to order only the coins they need in the short term.
And earlier this month, the Federal Reserve convened a U.S. Coin Task Force made up of industry leaders.
They will work to identify and reduce the duration of the COVID-19 related disruptions to normal coin circulation.
Meanwhile, here are a few ways the coin shortage may affect you directly and what to do about it…
No more change: When your local store orders $500 in coins from the bank, the bank may only be able to provide $200 in coins.
This means you can no longer get change, and many local stores are requiring exact change or other forms of payment.
Even if you go straight to your bank or credit union chances are they won’t give you any coins either.
Most of the coins are saved for their business customers.
If you need coins to do laundry or wash your car it will be difficult to find quarters.
If you don’t already have a debit card or some form of cashless payment now is the time to prepare.
For instance, you can buy reloadable cards at places such as Walmart.
This way you will still be able to make purchases at retailers that won’t accept cash or coins.
People are hoarding: Like toilet paper, many people are now hoarding cash and coins.
People are holding more cash than usual, but the bigger problem is the slow circulation.
Our currency system is based on circulation, meaning the money must constantly move.
Some of the places where you spend your cash and coins have likely been closed.
It’s the same nationwide, so the whole system of flow has slowed to a trickle.
Emergency coins: While coins are hard to find now, this will eventually resolve itself. And this is when you want to get some coins for a rainy-day emergency fund.
I will admit that while the vast majority of my emergency fund is in bills, a part is also in coins, just in case.
So, when you get a chance and can afford it, add some coins to your emergency cash because you never know what’s going to happen in the future.