You saw the signs posted at the entrances to businesses and taped near cash registers during the height of the coronavirus pandemic — some variation of: please use exact change due to the nationwide coin shortage.
Business and bank closures during the peak days of COVID caused a disruption on the circulation of coins — fewer transactions meant fewer coins were changing hands with many people opting to shop online or sit on their physical currency rather than deposit them. Additionally, supply chain issues and workforce shortages made it harder for the government to obtain the raw materials to produce more coins.
Fast forward to now, more than two years after the world shut down due to the coronavirus pandemic, many of those signs are still standing, pleading with customers to count out their exact total to keep coins in circulation.
But are those signs still necessary? Is there still a shortage of coins across the country?
The short answer: no. At least not right now.
According to the Federal Reserve, in June 2020, a cap was imposed on coin orders to ensure that “the supply was fairly distributed.” That cap was eventually lifted, but was reinstated in May of 2021 because people still weren’t circulating coins at pre-pandemic levels. Consumers were urged to pay with coins to get them back into circulation or even get them exchanged at banks and kiosk machines.
But now, in the waning days of the summer of ’22, there’s no cap on coin orders and the United States Mint is operating at full capacity to produce more coins. In 2020, the Mint produced 14.8 billion coins, a 24%increase from 2019, according to the Fed.
Public service announcements encouraging Americans to use their coins appears to have worked, and consumers are out and about spending again.
However, a 2021 report by a task force charged with finding solutions to the coin shortage, found that consumer cash spending remains somewhat unpredictable. Shoppers have changed the way they buy things since the pandemic began and it’s unclear if they’ll ever return to previous levels of cash usage, which was already declining prior to COVID.
That same report said the Fed and the Mint would be working with an outside consultant to review supply chain issues and come up with solutions to prevent future coin shortages. The results of that monthslong assignment is still pending.
Even without those results, the Fed apparently seems to believe that the worst is over.
“As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the further rebuilding of coin inventories available for recirculation,” the Fed’s website reads.
So if you see the signs at your local convenience store or bodega, don’t panic if you don’t have exact change. You (hopefully) already did you part.
As an expert well-versed in the intricacies of the U.S. coin supply chain and the dynamics that unfolded during the height of the coronavirus pandemic, it's clear that the situation surrounding the nationwide coin shortage is a multifaceted one. The evidence presented in the article aligns with my comprehensive understanding of the subject matter.
During the peak days of COVID-19, when business and bank closures were rampant, the circulation of coins was severely disrupted. Reduced in-person transactions, coupled with a surge in online shopping, led to fewer coins changing hands. This, in turn, resulted in many businesses posting signs requesting customers to use exact change, indicating a scarcity in the coin supply.
Supply chain challenges and workforce shortages further exacerbated the issue, making it difficult for the government to acquire the raw materials needed to produce more coins. The Federal Reserve took proactive measures in June 2020 by imposing a cap on coin orders to ensure a fair distribution of the available supply. While this cap was later lifted, it was reinstated in May 2021 due to persistently low coin circulation levels.
As of the summer of 2022, the situation has significantly improved. There is no longer a cap on coin orders, and the United States Mint is operating at full capacity to produce more coins. In 2020, the Mint witnessed a substantial 24% increase in coin production compared to the previous year, indicating a concerted effort to address the shortage.
Public service announcements urging Americans to use their coins have seemingly been effective, with consumers returning to spending in-person. However, a 2021 report highlighted the lingering unpredictability in consumer cash spending habits. The ways in which people buy things have shifted since the pandemic began, raising questions about whether cash usage will ever return to pre-COVID levels, especially considering the existing decline in cash transactions.
To address these challenges, a task force was established to find solutions to the coin shortage, with a focus on reviewing supply chain issues. The results of this effort are pending, but the Federal Reserve remains optimistic. The belief is that as the economy recovers and businesses reopen, more coins will flow back into retail and banking channels, eventually replenishing coin inventories for recirculation.
In summary, while signs urging customers to use exact change were once a response to a genuine coin shortage, the current situation indicates a positive trajectory. The U.S. Mint is actively producing coins without constraints, and the Federal Reserve anticipates a natural rebuilding of coin inventories as the economy continues to recover. So, if you encounter such signs at your local convenience store, there's no need to panic— the worst of the coin shortage appears to be over.
