In a landmark turn of events that has been brewing for months, the United States has ceased minting pennies, leaving businesses grappling with change-making challenges for cash transactions. A new legislative development could end the confusion once and for all. Earlier this month, the House passed a bill known as the “Common Cents Act,” aiming to streamline how retailers handle change without the iconic coin.
Under the “Common Cents Act,” not only is the production of the penny officially terminated, but guidance is also provided for retailers on handling transactions when cash registers lack pennies. This move might also herald the introduction of a new nickel.
In the absence of pennies, retailers across the country have resorted to innovative solutions to ensure customers receive their due change. In certain cases, businesses have offered alternatives like gift cards or small freebies to bridge the gap.
Other businesses have opted to round change amounts or total transaction costs, a practice that, while expedient, has opened doors to potential legal issues. As the landscape of cash payment evolves, one thing is certain: the conversation around the smallest unit of American currency is far from over.
Several states and localities have laws that prohibit businesses from rounding cash transactions up or down, the National Association of Convenience Stores said in a letter to the Senate Banking and House Financial Services Committees last year.
Part of the problem, Dylan Jeon, National Retail Federation senior director of government relations, previously explained to Nexstar, relates to laws that say those paying with a different form of tender, like a SNAP EBT card, can’t be charged differently than a customer paying with cash.
Under the Common Cents Act, businesses would be allowed the option to round cash transactions to the nearest nickel. A $19.82 purchase becomes $19.80 while $19.83 becomes $19.85, for example.
Canada took this approach when it phased out its penny in the early 2010s.
This would only impact cash transactions, not those in which you’re paying with a check, mobile payment, or card.
Pennies would remain legal tender under the bill as well. It’s estimated that more than 300 billion pennies are out in the world – more than 800 pennies, or $8 worth, per U.S. citizen – trapped wherever a little Lincoln can roll, fall into, and hide.
The Common Cents Act still needs to pass through the Senate and be signed into law before it can take effect. Its future in the next chamber is unclear.