The sign on the door says it all – “Exact change appreciated due to coin shortage.”
No, it’s not the summer of 2020. Instead, one of last year’s quirky shortages is back.
A statement from the Federal Reserve said the problem isn’t production, it’s circulation.
“Since mid-June of 2020, the U.S. Mint has been operating at full production capacity. In 2020, the Mint produced 14.8 billion coins, a 24 percent increase from the 11.9 billion coins produced in 2019,” the Federal Reserve said in a recent statement. “As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the further rebuilding of coin inventories available for recirculation.”
Issues with limited coins in circulation first arose last summer following weeks of business shutdowns during the coronavirus pandemic. A continued surge in online shopping and the use of debit and credit cards has contributed to the problem.
During a typical year, 83% of circulating coins came from third-party processors and retail activity. The remaining 17% comes from newly minted circulating coins.
To help promote circulation, the reserve said it has reimplemented caps on orders of pennies, nickels, dimes and quarters to make sure distribution reaches needed places. The U.S. Coin Task Force, formed during the initial shortage of 2020, is also working to address the situation.
According to the task force, there are some $48.5 billion coins in circulation but most are sitting in homes and not being used. Returning them to circulation through spending, depositing or exchanging them at banks or kiosks “will make a meaningful difference for the millions of American people and businesses that rely on coins to support cash transactions,” the task force said.