We currently have a shortage of coins in circulation in our country and I’m inadvertently a part of the cause for that shortage. According to the Federal Reserve Bank, there is more than $40 billion in coin already in circulation, most of which is sitting dormant inside America’s 128 million households.
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. Staying at home, reduced in-person spending, and the increased ordering online are contributors to the interruption in the coin flow.
Making more coins
The U.S. Mint has been at full capacity since mid-June. 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. The production totals 1.6 billion coins produced in June, and about 1.65 billion in both July and August.
What’s the impact of the coin shortage?
Retail stores are feeling the pinch and passing the inconvenience along to their customers. The National Grocers Association and several other retail industry trade groups sent a strongly worded letter to Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin in late June saying that rationing coin shipments to banks "threatens the functioning of our member businesses and, by extension, the needs of our customers."
In their letter, the groups cited economic statistics showing that cash is still very much king in certain sectors and among certain consumer demographics:
- 45-60 percent of sales at grocery stores and convenience stores are cash payments
- Nearly half of all transactions of $10 or less are paid in cash
- Consumers with an annual household income of $25,000 or less pay cash in 43 percent of transactions
You can help
Remember that jar of coins sitting on the counter? How about circulating them back into the U.S. economy? Pay for things with exact change, actually pay with coins instead of paper money, and take those jars to the coin machines in the grocery store.
Simply put, there is an adequate amount of coins in the economy, but the slowed pace of circulation has meant that sufficient quantities of coins are sometimes not readily available where needed. For millions of Americans, cash is the only form of payment and cash transactions rely on coins to make change.
Visit getcoinmoving.org or #getcoinmoving for more information.
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Sources: Federal Reserve Bank, U.S. Coin Task Force, U.S. Mint, Patch, National Grocer’s Association
The recommendation(s), advice and contents of this material are provided for informational purposes only and do not purport to address every possible legal obligation, hazard, code violation, loss potential or exception to good practice. Dean & Draper Insurance Agency specifically disclaims any warranty or representation that acceptance of any recommendations or advice contained herein will make any premises, property or operation safe or in compliance with any law or regulation. Under no circumstances should this material or your acceptance of any recommendations or advice contained herein be construed as establishing the existence or availability of any insurance coverage with Dean & Draper Insurance Agency. By providing this information to you, Dean & Draper Insurance Agency does not assume (and specifically disclaims) any duty, undertaking or responsibility to you. The decision to accept or implement any recommendation(s) or advice contained in this material must be made by you.