You might have noticed already there’s a national coin shortage. Try asking at 7-11 for coins for laundry and see what answer you get. The store even keeps a sign by the register now, telling people there’s a national coin shortage. Good luck doing your laundry if you need change right now.
Banks across the country are asking and sometimes even paying people more to bring in their spare change. The shortage is a side effect of the coronavirus. With businesses across the country closed down due to COVID-19, the circulation of coins has come to a halt. Right now, the demand is exceeding the supply. Federal Reserve chairman, Chrome Powell, explained the situation to the House Financial Services Committee about a month ago:
“With the partial closure of the economy, the flow of funds through the economy has stopped,” he said. “We are working with the Mint and the Reserve Banks, and as the economy re-opens, we are starting to see money move around again.”
Banks Are Paying People for Change
Even the banks across the country need change. They’re asking people to bring in what they have available, and they’ll kick them a few extra bucks. A bank in Wisconsin, the Community State Bank, has started the Coin Buy Back Program. People will get $5 for every $100 worth of coins. Customers can receive up to $500 in bonuses. The Vice President of the bank, Neil Buchanan, told CNN:
“We knew we needed to figure something out. We hate the idea of telling our customers, ‘No, we can’t give you one of the services we’re proud to provide,’ so we came up with a creative way to get things done. Just because this hasn’t been done before doesn’t mean it isn’t going to work — and it has already made a huge difference.”
Stores Are Hurting
Wawa and CVS across the country are telling customers to pay in exact change or they won’t receive their exact amount of change. Every cent matters, especially these days. Apparently, the problem has been escalating with stores running completely out of change.
A Letter to the Treasure of Secretary
Last month, major industry trade groups wrote to the Treasury Secretary, Steven Mnuhnin, explaining their concern:
The Federal Reserve’s announcement on June 11th that it will have to ration the distribution of coins across the country came as a shock. Some of our member businesses are being told that they cannot get coins from their banks at all. This threatens the functioning of our member businesses and, by extension, the needs of their customers.
Cash represents more than one-third of all funds transacted in-person by U.S. consumers and that number rises to nearly half of all funds for transactions of less than $10. These transactions are at risk and there are not good alternatives. Lower income Americans, many of whom do not have ready access to full banking services, rely more heavily on cash payments than others. For example, cash represents 43 percent of payments made by people with annual incomes under $25,000 and 35 percent of payments made by people with annual incomes between $25,000 and $50,000. These Americans will be at the greatest risk of having their normal purchases disrupted if the shortage of coins is not addressed quickly.
Right now, stores are encouraging customers to pay with debit or credit cards. CVS is even allowing customers to pay by check. “We’re working with our bank partners to minimize impact to our customers and are monitoring the situation closely,” CVS said in a statement.