With the U.S. Mint no longer producing pennies, retailers across the country may find it increasingly difficult to secure enough 1-cent coins to provide exact change for cash transactions. In areas where supplies are limited, many stores have begun rounding cash totals to the nearest nickel. The shrinking penny supply creates operational, legal, and compliance considerations that retailers should be aware of as this situation develops.

History

On February 9, President Trump directed the U.S. Treasury to halt the production of pennies. As of early November, more than half of the Federal Reserve’s vaults have suspended penny orders or deposits due to depleted stock. As banks receive fewer pennies, retailers are facing growing challenges in providing exact change.

Implications

Rounding cash transactions may seem like a simple solution, but it carries important considerations:

• Even small differences, such as rounding down by a few cents, can accumulate and impact a retailer’s bottom line.
• Retailers could face legal questions about pricing accuracy or conflicts with federal rules requiring exact change. Many businesses are concerned about potential class action lawsuits over minor discrepancies, which could result in costly litigation.
• Compliance challenges may arise with SNAP’s equal-treatment requirements, which prohibit both negative treatment (discrimination) and preferential treatment (incentives). (i.e. providing a slightly different total between cash paying customers and those using a SNAP EBT card).
• Retailers offering check-cashing services must follow federal banking laws, which require providing cash and coins for the exact check amount.

Policy Landscape

Retail trade associations, including the Alabama Retail Association, have urged governmental bodies to provide clear guidance.

Members of Congress are preparing updated legislative text for the Common Cents Act (H.R. 3074). The revised bill is expected to include optional rounding guidance to account for situations where either the customer or the retailer has exact change, along with broad preemption of any federal, state, or local laws that conflict with the prescribed rounding practices. While the timing of legislative movement remains uncertain, congressional staff have acknowledged the urgency of addressing the issue.

Federal agencies are also working on next steps. The U.S. Treasury Department is developing FAQs to help businesses and consumers understand expectations for rounded cash transactions. Although this guidance would not override existing laws or provide legal protection, it would serve as an important reference during the transition away from pennies. Retailers have also urged the U.S. Department of Agriculture to issue expedited guidance clarifying how rounding interacts with SNAP’s equal treatment requirements.

Best Practices

While the federal government works toward providing more definitive direction on rounded cash transactions, you may want to consider the following best practices to help reduce risk and maintain consistent operations. These are general recommendations for informational purposes only and should not be interpreted as legal advice.

• Maintain clear signage informing customers about rounding policies to promote transparency and minimize confusion.
• Review your point-of-sale (POS) settings to ensure rounding rules are applied consistently and transparently for cash transactions.
• Train staff on how to explain rounding to customers and how to handle situations when exact change is available or requested.
• Monitor the impact on pricing and reconciliation, including any variations in cash drawer balances resulting from rounding.
• Consult with your legal counsel to understand any compliance obligations specific to your business model or financial services offerings.