PHOENIX — Remember when that one relative would give you a quarter and remind you not to spend it all in one place? Turns out, those may have been the good old days.
In an announcement on June 11th, the Federal Reserve announced that due to COVID-19, there was a shortage of coins on the horizon.
"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."
On Tuesday, that shortage is being felt. Businesses are, at an increasing pace, placing signs asking customers to provide exact change or use another means of payment.
“The consumer it affects most is probably the consumer that is a little underbanked,” said President and CEO of the Arizona Banker’s Association Paul Hickman. “Those who don’t have access to either a contactless payment system; something like an iPhone or a debit card.”
In the early spring, as the country was shutting down to slow the spread of COVID-19, the U.S. Mint followed suit and slowed its production of coins to help keep workers free of the disease.
Slowly, over time, that slowdown, coupled with a general slow down in the economy, has resulted in a temporary shortage of coins.
Jerome Powell, Chair of the Federal Reserve, which distributes coins, addressed the issue at a House of Representatives committee meeting on financial services on June 17.
“What happened was, with the partial closure of the economy, the flow of coins through the economy has gotten all- it’s kind of stopped.” Chair Powell explained.
The good news is this shortage should be short-lived, as the Mint has resumed its normal production. However, when the shortage will end is anyone’s guess.
“It’s a situation we’re going to have to wait out,” Hickman said. “I think it will get better. I think the $64,000 question- no pun intended- is how quickly it will get better.”
That all depends on the virus. Cases of COVID-19 are increasing and spreading around the country. The shortage will be felt until the economy can ramp back up and more coins can pass from purse to register.
“We have seen, as you know, in the last month, the pandemic moved around the country rather than become suppressed. So, this [the coin shortage] may be a problem that is with us for a while, although I think it will slowly start to abate.” Hickman said.
So, if you find a penny on the street, it just may be worth your while to bend down and pick it up. Meanwhile, if possible, you may just want to carry a bit of plastic with you just in case.