WEBVTT - Why Is There a Coin Shortage in America?

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<v Speaker 1>Welcome to brain Stuff production of iHeart Radio. Hey brain Stuff,

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<v Speaker 1>Lauren Bogelbaum. Here. At grocery stores, convenience stores, and hardware

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<v Speaker 1>stores across America, curious signs are popping up asking customers

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<v Speaker 1>to pay with credit cards, debit cards, or exact change.

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<v Speaker 1>Is it because cashiers don't want to handle physical dollars

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<v Speaker 1>and cents that could be contaminated with the coronavirus? Nope,

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<v Speaker 1>it's because the United States is currently experiencing a coin shortage.

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<v Speaker 1>So where have they gone? America's pennies, nickels, dimes, and

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<v Speaker 1>quarters haven't disappeared. The COVID nineteen pandemic has simply disrupted

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<v Speaker 1>the normal cycle of coin circulation. According to the U. S. Treasury,

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<v Speaker 1>there were forty seven point eight billion dollars worth of

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<v Speaker 1>coins in circulation as of April, which was actually four

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<v Speaker 1>hundred million dollars more than in April of nineteen. But

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<v Speaker 1>those coins are not moving through the economy like they

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<v Speaker 1>should be. The Federal Reserve gives several reasons as to

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<v Speaker 1>why this is happening. Banks and businesses nationwide closed their

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<v Speaker 1>doors during the lockdown phases of the pandemic, including cash

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<v Speaker 1>and coin heavy sectors like convenience stores, public transit, and laundromats.

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<v Speaker 1>The U S Mint also slowed its production of new

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<v Speaker 1>coins during the early stages of the pandemic, as staff

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<v Speaker 1>was reduced for safety reasons at the min's Philadelphia and

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<v Speaker 1>Denver locations. Even as the economy reopens, consumers are opting

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<v Speaker 1>for contactless payment and generally using less cash and coins,

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<v Speaker 1>meaning more coins are sitting at home in mason jars,

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<v Speaker 1>piggy banks, and under couch cushions. So what does this mean?

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<v Speaker 1>Retail stores are feeling the pinch of the inconvenience and

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<v Speaker 1>passing it along to their customers. The National Grocer's Association

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<v Speaker 1>and several other retail industry trade groups sent a strongly

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<v Speaker 1>worded letter to Federal Reserve Chair Jerome Powell and Treasury

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<v Speaker 1>Secretary Steve Manustion in late June, saying that the federal

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<v Speaker 1>rationing of coin shipments to banks quote threatens the functioning

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<v Speaker 1>of our member businesses and, by extension, the needs of

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<v Speaker 1>our customers. In their letter, the group's cited economic statistics

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<v Speaker 1>showing that cash is still very much king in certain

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<v Speaker 1>sectors and among certain consumer demographics. For example, between forty

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<v Speaker 1>five to sixty percent of sales at grocery stores and

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<v Speaker 1>convenience stores are cash payments. Nearly half of all transactions

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<v Speaker 1>of ten dollars or less are paid in cash, and

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<v Speaker 1>consumers with an annual household income of twenty five tho

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<v Speaker 1>dollars or less paying cash for forty of their transactions.

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<v Speaker 1>So what's the solution. The long term solution is to

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<v Speaker 1>wait for the economy to return to normal, at which

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<v Speaker 1>point coins will naturally flow back into circulation. But in

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<v Speaker 1>the meantime, the Federal Reserve and the U s Mint

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<v Speaker 1>are taking action. The Mint has ramped up coin production,

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<v Speaker 1>outpacing its usual one billion coins a month, with one

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<v Speaker 1>point two billion coins in June and one point three

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<v Speaker 1>five billion a month for the rest of according to

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<v Speaker 1>The New York Times. The Federal Reserve announced in June

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<v Speaker 1>that it was rationing out its coin inventory by sending

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<v Speaker 1>banks and credit unions smaller than normal coin shipments based

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<v Speaker 1>on historical demand. The Fed also convened an emergency US

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<v Speaker 1>Coin task Force, composed of government and industry leaders, including

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<v Speaker 1>banks and armored car companies. The task force is expected

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<v Speaker 1>to come up with a set of recommendations by the

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<v Speaker 1>end of July. One of the task forces early accomplishments

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<v Speaker 1>was to create the hashtag get coin moving, which banks

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<v Speaker 1>and credit unions are plastering across Twitter to encourage people

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<v Speaker 1>to cash in their piggy banks to get more coins

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<v Speaker 1>back in circulation. Today's episode was written by Dave Ruse

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<v Speaker 1>and produced by Tyler Klang. For more on this and

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<v Speaker 1>lots of other totally money topics, visit how stuff works

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<v Speaker 1>dot com. Brain Stuff is a production of iHeart Radio.

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