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Business shutdowns during pandemic lead to national coin crunch | Business

Signs of these unusual times can be found at check-out counters all over the place.

Gas stations, dollar stores and even big-box merchants are asking customers for exact change or to pay by credit or debit cards to help what many are calling a coin shortage brought on by the coronavirus pandemic.

At the newly opened Twisted Beverages in North Charleston, Nicole Lawrence has been coping with the issue first-hand.

“When I go to get change at the bank down the street, they are not giving out coins,” Lawrence said. “I have to go to the main branch on Rivers Avenue and go to a parking spot and they bring it out to you.”

The liquor store, which isn’t requesting shoppers provide exact change, manages to cobble together enough loose coins for the week, but even so, Lawrence said, “They are limiting what we get.”

The Federal Reserve is urging people to cash in their loose change to help alleviate a national coin circulation problem. Warren L. Wise/Staff

David Ryder, director of the U.S. Mint, said it’s incorrect to view the shortage as a supply-side issue. He called it “a circulation problem.”

“Right now, coins aren’t circulating through the economy as quickly as they were prior to the COVID-19 pandemic, which means that sometimes coins are not readily available where needed,” Ryder said.

The Mint is stepping up production to ease the crunch, and Ryder, too, is urging people to use exact change when they can, deposit coins with their financial institutions, or convert them to greenbacks at fee-based redemption kiosks.

“Every little bit helps,” he said. “Together, we can get coins moving again.”

First Citizens Bank has been diligent about trying to get coins to customers during the shortage, said Barbara Thompson, spokeswoman for the Raleigh-based lender, which has about 140 branches in South Carolina. 

“We still have supply, but we know there is a need,” she said. “If people want to bring in their change, we will get it to businesses that need it the most.”

Task force

The dearth reached the point that the Federal Reserve recently formed a U.S. Coin Task Force “to identify, implement and promote actions to address disruptions to coin circulation.”

Banking officials and economists point at the pandemic for the scarcity of pennies, nickels, dimes and quarters.

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The Fed said the economic lockdown this spring “significantly disrupted” the normal circulation patterns for U.S. coins as many businesses that traditionally deal in spare change — car washes, laundromats and vending machine operators, among others — were closed or operating at partial capacity.

“One of the major causes for this is that we have seen this reduction in consumer spending and the coins aren’t circulating as they have been,” said Joey Von Nessen, a research economist at the University of South Carolina.

Another disruptive force is that most banks closed their lobbies to walk-in traffic during the lockdown, a likely impediment for customers wanting to cash in the contents of their piggy banks. 

Also, production of new coins was curtailed after the outbreak forced the Mint to send workers home.

As a result, the amount of change that normally jingles through the economy dropped, said Fred Green, president and CEO of the South Carolina Bankers Association.

“Folks weren’t out buying things, and newly minted coins weren’t being circulated at the same velocity,” Green said.

In most most instances, he said, the impact has been minimal, while adding that “it might be an aggravation.”

Raising awareness

Federal officials believe the circulation issue will correct itself as more businesses reopen and metal currency begins to flow into retailers and financial institutions.

About 80 percent of all the nation’s coin supply comes from recirculated money. The rest comes from the Mint, which cranked back up to full capacity in June. It plans to turn out about 1.65 billion coins each month for the rest of 2020, up from 1 billion a month last year.

Among the Coin Task Force’s initial recommendations is creating public awareness by September of the need to recirculate loose change that’s gathering dust in jars or desk drawers.

Another possible fix for financial institutions that aren’t equipped to process large volumes of loose coins is to give customers free coin-rolling kits.

Those steps “should allow for the rebuilding of coin inventories,” the Fed said.

Some retailers are looking to turn the shortage into a philanthropic opportunity by asking customers to “round up” their cash purchases to the nearest dollar, with the extra change going to designated charities. They include Bi-Lo and Harris Teeter supermarket chains.

Reach Warren L. Wise at 843-937-5524. Follow him on Twitter @warrenlancewise.

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