Preparing for the End of the Penny: What Businesses Should Know

The penny is retiring. Learn how your business can adapt and keep cash flowing smoothly.

For over a century, coins like pennies, nickels, dimes, and quarters have been central to everyday transactions. Beginning in 2026, the U.S. penny will be phased out, with no new coins produced. This change will affect cash operations for businesses, so understanding its implications is key to staying prepared.

Why the Penny is Being Retired

  1. Production costs exceed value: It costs more to make a penny than the coin is worth.
  2. Decreased circulation: Fewer people use pennies, and many end up saved or discarded.

Retiring the penny aims to streamline cash transactions, reduce unnecessary costs, and make coin circulation more efficient.

What Your Business Needs to Know

  •  Pennies remain valid: They are still legal tender, but supplies may become limited.
  •  Cash rounding may be used: Some businesses may round totals to the nearest five cents. For example, $7.02 could round down to $7.00, while $7.03 could round up to $7.05. Rounding policies may vary by state or local rules.
  •  Digital payments stay the same: Credit cards, debit cards, and other electronic payment methods are unaffected.

How Banks are Helping Businesses

To ease the transition, banks are providing support in several ways:

  •  Monitoring coin availability: Ensuring pennies remain accessible while supplies last.
  •  Coordinating with authorities: Working with the Federal Reserve and Treasury on coin distribution.
  •  Offering guidance: Providing operational advice for managing cash transactions during the transition.
  •  Advocating for solutions: Supporting policies that allow businesses to deposit pennies conveniently.

Is Your Business Ready?

As a business owner, you can take proactive steps to adjust smoothly to the penny’s retirement:

  1. Implement rounding procedures: Update cash-handling processes to accommodate rounding to the nearest five cents. Rounding policies may vary by state or local rules.
  2. Track coin inventory: Keep an eye on small-coin supplies and adjust register management.
  3. Train employees: Make sure staff can explain rounding and other changes to customers.
  4. Encourage digital payments: Promote card and mobile transactions to reduce reliance on coins
  5. Stay informed: Watch for updates from your bank, industry groups, and local authorities.
  6. Communicate clearly: Let customers know how cash totals may be rounded or handled.

While the penny’s retirement marks a significant shift in U.S. currency, thoughtful preparation can keep your business running smoothly. By adapting processes, training staff, and leveraging digital payments, businesses can confidently navigate this transition.

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.