Blame the coronavirus for a new shortage — not of toilet paper, but of pennies, nickels, dimes and quarters that is forcing some businesses to change their policies around how patrons pay for good and services.
The Federal Reserve, which manages coin production and distribution, last month said it would temporarily limit the number of coins it gives depository institutions, such as banks, noting a significant disruption to both the coin supply chain and the normal circulation patterns for U.S. coinage — all because of COVID-19.
As a result, some businesses say they are low on change. The convenience store chain Wawa, for one, is asking patrons of its 850 outlets to use exact change, or else pay with a credit or debit card, or by using the company’s mobile app.
“Like many other businesses around the country, Wawa stores have been affected by the shortage of coins nationwide, as reported by the Federal Reserve,” a company spokesperson said in a statement to CBS MoneyWatch.
Other retailers, including CVS pharmacies and discount chain Dollar Tree stores have implemented similar policies, citing coin shortages, according to local reports.
The scant supply of coins is due in part to reduced production capacity. Workers at the U.S. Mint, which makes all of the country’s coinage, are producing at a slower rate than usual because of precautionary measures taken to protect them from the coronavirus.
“The COVID‐19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin. In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees,” the Federal Reserve said in its June statement.
The Fed also added that it is working with the Mint to increase production capacity, and believes coins in circulation will return to normal levels once more businesses begin to reopen. So far in 2020, the U.S. mint has produced 6.5 billion coins, including more than 1 billion quarters.
Coins are also accumulating in the homes — and pockets — of people still leery of going out in public.
Coinstar, which operates a network of coin-cashing machines, said that it has seen lower coin volumes of late, and has been making more frequent coin pick-ups to get more metal back in circulation, the company said in a statement to CBS MoneyWatch.
To help add to its inventory of loose change, Wawa is allowing customers to exchange their rolled coins for bills at participating stores. It is also encouraging customers to round up their purchases to the nearest dollar, donating the difference to the Wawa Foundation, which supports local health, hunger and “everyday heroes” charities.
Wawa, with its 850 stores concentrated in Pennsylvania, New Jersey, Delaware, Maryland, Virginia, Florida, and Washington, D.C., indicated it won’t turn away customers who don’t have the ability to pay using a credit or debit card or mobile app.
There’s concern that coronavirus will force society to rely more heavily on card and digital payments, which exclude vulnerable groups with limited access to banks or credit cards, as experts caution that COVID-19 can potentially be transmitted through handling cash.
“Not everyone has a bank account,” Dr. Danielle Ompad, an epidemiologist at New York University’s School of Global Public Health, told CBS MoneyWatch in March. “There are some very important equity issues if we start encouraging cashless transactions.”