Where Did The Coins Went In The USA?
Over the summer of 2020, strange signs appeared in grocery stores, convenience stores, and hardware stores across America, requesting consumers to pay with credit cards, debit cards, or exact change. Was it because cashiers didn't want to handle physical dollars and cents tainted by the coronavirus? No, it was due to a major coin scarcity in the United States. If donning masks, stockpiling toilet paper, and canceling summer plans weren't enough, Americans had to forego the 46 cents in change from their drive-thru iced coffee.
The pennies, nickels, dimes, and quarters of America did not vanish; the COVID-19 epidemic just disturbed the normal cycle of coin circulation. The United States According to the Treasury, there were $47.8 billion in coins in circulation as of April 2020, which was $400 million more than in April 2019, but the coins were not circulating through the economy as quickly as they should have. The Federal Reserve cited many causes for the decrease in currency circulation:
- During the pandemic's lockdown phases, banks and businesses across the country closed their doors, including cash- and coin-heavy industries like convenience stores, public transportation, and laundromats.
- The United States Mint likewise restricted manufacturing of new coinage during the early stages of the epidemic, since staff at the mint's Philadelphia and Denver facilities was decreased for safety concerns.
- Even after the economy reopened, customers preferred "contactless" payment and spent less cash and coins in general, which meant that more coins were languishing at home in Mason jars, piggy banks, and under sofa cushions.
Retailers felt the pinch and passed along the hardship to their customers. In late June 2020, the National Grocers Association and several other retail industry trade groups wrote to Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin, stating that rationing coin shipments to banks "threatens the functioning of our member businesses and, by extension, the needs of our customers."The associations provided economic facts in their letter that suggest cash is still king in certain sectors and among particular consumer demographics:
- Cash payments account for 45-60% of sales at grocery stores and convenience stores.
- Cash accounts for nearly half of all transactions of $10 or less.
- In 43 percent of purchases, consumers with an annual family income of $25,000 or less pay cash.
According to CoinNews.net, the United States Mint drastically increased coin output, exceeding its usual 1 billion coins each month with 1.59 billion coins in June and higher-than-normal volume throughout the remainder of 2020. The Federal Reserve said in June that it was restricting its currency inventory by sending smaller-than-normal coin shipments to banks and credit unions based on past demand. The Fed also called an emergency meeting of the United States. In July, the Coin Task Force was formed by government and industry leaders, including banks and armored car companies.
One of the task force's early successes was the creation of the hashtag #getcoinmoving, which banks and credit unions advertised across Twitter to encourage people to cash in their piggy banks in order to get more coins back into circulation. Some banks went so far as to take matters into their own hands. Valliance Bank in Oklahoma City initiated a coin drive among its customers, rewarding the branches and customers that gathered the most coins with free meals.
By the end of 2020, the United States According to American Banker, the Mint's two operations in Denver and Philadelphia produced 26% more coins than the previous year. The coin scarcity appeared to be mostly over by January 2021, with banks able to complete coin orders for grocery stores, laundromats, and other coin-heavy companies as a consequence of increasing coin manufacturing and a gradual reopening of the economy in most states.