Since the onset of the novel coronavirus, consumers have had to face a shortage of their favorite foods, cleaning products, and, of course, toilet paper as manufacturing and processing were interrupted and the supply chain for these staples broke down. Now the most recent shortage the country is facing is a shortage of coins. While the use of cash for purchases has gradually declined, this shortage is an indication of just how critical cash still is in consumer transactions.
Grocery store giant Kroger announced that it is no longer giving coins back in change. They are asking customers to either donate the amount normally provided in coins to the charity Zero Hunger, Zero Waste Foundation, or applied to their Kroger loyalty card, the balance of which they can then use against their next purchase. The Fed has convened a task force on the issue too. Claire Greene of the Federal Reserve Bank of Atlanta wrote this about the issue in a blog post on Take on Payments:
Got any quarters sitting in a mug on your kitchen counters? Pennies napping between the couch cushions? Dimes lounging in the back of a drawer?
It’s time to get those coins moving again! You can think of coin circulation as the spinning wheel on an exercise bike, tracking from consumers to retailers to financial institutions to the Federal Reserve to financial institutions to retailers to consumers and around again. As in-person retailers around the United States restart their businesses, they need to restock the till. But where are those coins? The bicycle wheel is not currently spinning well because many coins went home with consumers in mid-March and have yet to get back into circulation.
How can you help? Bring your stash to a bank or retailer, and they’ll be happy to see you. One bank is sponsoring a raffle for coin depositors; another is paying a premium to account holders who bring in lots of coin (#getcoinmoving). Or pour your hoard of pennies, nickels, dimes, and quarters into a coin machine to restart that spinning wheel while putting greenbacks in your pocket.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group