After a gap of eight months since the United States minted its last penny, a new legislative effort could bring clarity to the chaos stemming from the coin’s absence. Businesses have long grappled with how to provide precise change to cash customers amid a coin shortage. Earlier this month, the House passed a bill that may offer a solution to these financial quandaries.
The aptly named “Common Cents Act” seeks to decisively end the era of the penny while synchronizing practices for retail transactions sans the one-cent piece. Crucially, it also outlines how businesses should manage change when pennies are no longer available in their cash registers. Additionally, the act may pave the way for a refreshed take on the nickel.
In response to the scarcity of pennies, retailers of all sizes have informed shoppers that cash payments might not result in receiving exact change. Their solutions have varied widely, from issuing store credit gift cards to offering complimentary products as compensation.
In lieu of pennies, some businesses have opted to round up or down when calculating change or total bills. While this practice has helped ease immediate complications, it also opens the door to potential legal disputes.
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.