First, it was toilet paper and hand sanitizer.
Those were some of the first items to fly off the shelves when COVID-19 took over, prompting requests to stay home and the closing of nonessential businesses. Then came the meat shortage and a persistent lack of shallow wipes.
The last product that falls short? Change of pocket: the things that we carry in pockets and wallets, hidden in night tables, jars and niches in our cars.
US banks are running out of pennies, pennies, dimes and quarters, prompting the Federal Reserve, which supplies the banks, to ration scarce supplies.
Why are there no coins?
The shortage has been fueled by two factors. The United States Mint produced fewer coins than usual this spring as it sought to protect employees from infection. Beyond that, the problem is linked to distribution.
Bank lobbies, where consumers often exchange coins for banknotes, were mostly closed during the peak of closing. They have since reopened, but currency exchange machines have also had limited use as consumers cautious with viruses make fewer trips to the supermarket.
Reduced pedestrian traffic
Coinstar, the country’s largest coin sorting kiosk chain, didn’t miss a step, according to company CEO Jim Gaherity. But he acknowledged that transactions have fallen.
“During the pandemic, Coinstar kiosks have remained available and fully functional with continuous service in line with our normal volume-based practices,” said Gaherity. “However, due to decreased retail foot traffic, we have seen lower coin volumes.”
With more than 22,000 machines worldwide, the Bellevue, Washington-based company typically processes about 40 million coins a year.
Gaherity said coin volumes through Coinstar kiosks are growing as locks end. And the company has been making more frequent collections to help coins re-circulate.
“We look forward to seeing consumers resume their previous level of coin use and recycling at banks, Coinstar kiosks and daily cash transactions,” he said.
Rounding up and down
Representative John Rose, R-Tenn. He conveyed his concerns about the currency shortage to Fed President Jerome Powell in a recent report to Congress.
“I am thinking not only of banks and other retail companies, but of their customers who will face the possibility of rounding or downsizing,” Rose said. “At a time when pennies are the difference between profit and loss, it appears to be a bigger concern than the Fed announcement indicated it is.”
In a June 11 post, the Fed said it was working with the Mint to minimize currency supply restrictions and maximize production capacity, while encouraging financial institutions to order only the coins they need to meet short-term demand.
As of June 15, the Fed said, “The limits will be revised and potentially revised based on levels of national receipts, inventories and mint production.”
Wells Fargo said it is actively managing its coin inventory and working to meet customer needs after the central bank places limitations on coin deliveries to all financial institutions across the country.
In her message to Congress, Rose said she hopes the problem can be mitigated.
“We don’t want to wake up ‘Moneyless Banks’ headlines,” he said.
