Welcome to brain Stuff production of iHeart Radio. Hey brain Stuff, Lauren Bogelbaum. Here. At grocery stores, convenience stores, and hardware stores across America, curious signs are popping up asking customers to pay with credit cards, debit cards, or exact change. Is it because cashiers don't want to handle physical dollars and cents that could be contaminated with the coronavirus? Nope, it's because the United States is currently experiencing a coin shortage.
So where have they gone? America's pennies, nickels, dimes, and quarters haven't disappeared. The COVID nineteen pandemic has simply disrupted the normal cycle of coin circulation. According to the U. S. Treasury, there were forty seven point eight billion dollars worth of coins in circulation as of April, which was actually four hundred million dollars more than in April of nineteen. But those coins are not moving through the economy like they
should be. The Federal Reserve gives several reasons as to why this is happening. Banks and businesses nationwide closed their doors during the lockdown phases of the pandemic, including cash and coin heavy sectors like convenience stores, public transit, and laundromats. The U S Mint also slowed its production of new coins during the early stages of the pandemic, as staff was reduced for safety reasons at the min's Philadelphia and
Denver locations. Even as the economy reopens, consumers are opting for contactless payment and generally using less cash and coins, meaning more coins are sitting at home in mason jars, piggy banks, and under couch cushions. So what does this mean? Retail stores are feeling the pinch of the inconvenience and
passing it along to their customers. The National Grocer's Association and several other retail industry trade groups sent a strongly worded letter to Federal Reserve Chair Jerome Powell and Treasury Secretary Steve Manustion in late June, saying that the federal rationing of coin shipments to banks quote threatens the functioning of our member businesses and, by extension, the needs of
our customers. In their letter, the group's cited economic statistics showing that cash is still very much king in certain sectors and among certain consumer demographics. For example, between forty five to sixty percent of sales at grocery stores and convenience stores are cash payments. Nearly half of all transactions of ten dollars or less are paid in cash, and consumers with an annual household income of twenty five tho dollars or less paying cash for forty of their transactions.
So what's the solution. The long term solution is to wait for the economy to return to normal, at which point coins will naturally flow back into circulation. But in the meantime, the Federal Reserve and the U s Mint are taking action. The Mint has ramped up coin production, outpacing its usual one billion coins a month, with one point two billion coins in June and one point three five billion a month for the rest of according to
The New York Times. The Federal Reserve announced in June that it was rationing out its coin inventory by sending banks and credit unions smaller than normal coin shipments based on historical demand. The Fed also convened an emergency US Coin task Force, composed of government and industry leaders, including banks and armored car companies. The task force is expected to come up with a set of recommendations by the
end of July. One of the task forces early accomplishments was to create the hashtag get coin moving, which banks and credit unions are plastering across Twitter to encourage people to cash in their piggy banks to get more coins back in circulation. Today's episode was written by Dave Ruse and produced by Tyler Klang. For more on this and lots of other totally money topics, visit how stuff works dot com. Brain Stuff is a production of iHeart Radio.
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