CHARLOTTE — The U.S. Treasury has ended production of the one-cent coin because the cost to manufacture the penny has risen significantly above its face value. It currently costs 3.69 cents to produce each individual penny.
By stopping production, the U.S. Mint expects to save approximately $56 million annually.
Although the final pennies were minted in November, the coins will remain in circulation for the foreseeable future.
While the coins are no longer being produced, the 114 billion pennies currently in circulation remain legal tender.
Because North Carolina and South Carolina have not passed legislation regarding how businesses should handle the transition, some local retailers are creating their own rules for cash transactions.
Loc Tran, the owner of Giant Penny Grocery, said his business began adapting after receiving notice from financial institutions.
“It was sometime late last year that the bank notified us that they’re no longer passing out pennies,” Tran said. “So we’ve been having a hard time getting pennies.”
To manage the shortage, Giant Penny Grocery posted signs informing customers that cash totals will be rounded to the nearest nickel.
Under this policy, total amounts ending in one, two, six, or seven cents are rounded down to the nearest five-cent increment. Totals ending in three, four, eight, or nine cents are rounded up. Tran noted that the vast majority of his customers have not expressed concern about the change.
“You know, 99.99% of people don’t really even notice,” Tran said. “And one or two people who do notice, we just round up to a nickel for them, it’s not a big deal for us.”
Shoppers at the store shared varying opinions on the disappearance of the one-cent coin. Pepper Poole often finds that the coins are easily misplaced rather than used for purchases.
“I lose it in the car, it falls between the seats... The pennies, it really doesn’t matter to me,” Poole said.
Other customers, like Tarena Moore, believe the removal of the coin is a mistake. Moore suggested that people should hold onto the currency they have left.
“I don’t think it’s a good idea. All money is good money,” Moore said. “So I just suggest to the people, save your pennies. Cuz the world is changing.”
Research from the Federal Reserve suggests that cashiers may end up rounding up more often than down.
Researchers found that prices not ending in zero or five were most likely to end in eight or nine cents. This trend primarily affects those who use physical currency.
Shopper Deidre Williams said she primarily uses cards and is comfortable with the rounding process for cash users.
“I don’t use pennies anyway, or cash, so I guess I’m okay with rounding up or rounding down,” Williams said.
Despite the change in currency production and the store’s new cash policies, Tran said he has no plans to change the name of the Giant Penny Grocery.
The U.S. Mint expects the existing supply of pennies to remain in use for several generations.
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