National coin shortage has businesses asking for exact change; Fed starts rationing program

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SPRINGFIELD, Mo. (KOLR-TV) — A national coin shortage is attributed to some of the trickle-down effects of the COVID-19 pandemic.

In many places around the country, COVID-19 is still going around. However, there is one thing that isn’t going around as much as usual: coins.

In North Carolina, Circle K stores are among businesses seeking exact change or asking customers to pay with credit or debit cards if they lack exact change.

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Shane Cowger, Sales Manager EVP at Arvest Bank, says it mostly has to do with the way businesses have been in flux.

“Essentially, when COVID-19 hit, and businesses – our economy really just shut down for that period of time. Those coins were not put back into circulation, and so really what you have is a flow problem more than anything. That coin not being circulated, wasn’t getting back to the Fed,” says Cowger.

The Federal Reserve put out a statement this month addressing the issue. They attributed part of the problem to the U.S. Mint not producing as much as usual because of COVID-19 business interruptions.

The Fed also said U.S. Mint workers were impacted by the pandemic and that coin production “decreased due to measures put in place to protect its employees.”

Eventually, that production should ramp up once again, but Cowger says in the short term, consumers may see some effect.

“What you’re going to see is potentially businesses asking for exact payment, may not have a particular denomination in a coin. We’re seeing a little bit of impact right now.”

Businesses like Lowe’s Home Improvement and Quik Trip are asking customers to pay with exact change if possible.

Cowger says Arvest may even ask their commercial customers to reduce the number of coins they order. He says one of the best ways people can help is by bringing that big jar of change that you’ve been stashing for who knows how long.

“Bring the coins in, and let the banks circulate it, and again – we’ll get this problem solved,” Cowger says.

Here is the full statement from the U.S. Federal Reserve:

Temporary coin order allocation in all Reserve Bank offices and Federal Reserve coin distribution locations effective June 15, 2020

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. Federal Reserve coin orders from depository institutions have begun to increase as regions reopen, resulting in the Federal Reserve’s coin inventory being reduced to below normal levels. While the U.S. Mint is the issuing authority for coin, the Federal Reserve manages coin inventory and its distribution to depository institutions (including commercial banks, community banks, credit unions and thrifts) through Reserve Bank cash operations and offsite locations across the country operated by Federal Reserve vendors.

The Federal Reserve is working on several fronts to mitigate the effects of low coin inventories. This includes managing the allocation of existing Fed inventories, working with the Mint, as issuing authority, to minimize coin supply constraints and maximize coin production capacity, and encouraging depository institutions to order only the coin they need to meet near‐term customer demand. Depository institutions also can help replenish inventories by removing barriers to consumer deposits of loose and rolled coins. Although the Federal Reserve is confident that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns, we recognize that these measures alone will not be enough to resolve near‐term issues.

Consequently, effective Monday, June 15, Reserve Banks and Federal Reserve coin distribution locations began allocating coin inventories. To ensure a fair and equitable distribution of existing coin inventory to all depository institutions, effective June 15, the Federal Reserve Banks and their coin distribution locations began to allocate available supplies of pennies, nickels, dimes, and quarters to depository institutions as a temporary measure. The temporary coin allocation methodology is based on historical order volume by coin denomination and depository institution endpoint, and current U.S. Mint production levels. Order limits are unique by coin denomination and are the same across all Federal Reserve coin distribution locations. Limits will be reviewed and potentially revised based on national receipt levels, inventories, and Mint production.

To learn more about the Federal Reserve’s role in coin distribution, visit the Federal Reserve Board of Governors (Off-site) website. To learn more about coin ordering and depositing at the Federal Reserve, click here.

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