Dan Nielsen: Shortage prompts call to move coins | Business
Americans are apparently hoarding coins. But probably not on purpose. It’s more like the nation as a whole has misplaced a few billion coins on the national couch.
The coin shortage peaked last year, when stores in Traverse City and everywhere else ran out of coins to make change. Pandemic disruptions in spending patterns have radically altered the usual flow of quarters, dimes, nickels and pennies. Banks could not get enough coins, so they could not distribute enough coins to retailers, who therefore could not always give correct change for customer purchases.
The US Mint responded last year by stepping up coin production. The Federal Reserve responded by temporarily capping the number of coins that individual institutions could order to ensure supply was distributed evenly. Those caps were eventually removed, but were reinstated in May 2021 as the parts shortage spread.
The Mint always manufactures new coins to replace those that wear out. Lately he has been working overtime. In a typical year, 17% of the coins in circulation are newly minted.
“Since mid-June 2020, the US Mint has been operating at full production capacity,” according to the Federal Reserve. “In 2020, the Mint produced 14.8 billion coins, an increase of 24% from the 11.9 billion coins produced in 2019.”
To solve the problem of the circulation of coins, the United States Mint and the Federal Reserve in July 2020 created the US Coin Task Force (https://getcoinmoving.org). The task force in May released this statement:
“The circulation of coins has emerged as a new disruption caused by the COVID-19 pandemic. Many have called this a shortage; however this is not the case. There are already over $ 40 billion in coins in circulation, most of which lie dormant in 128 million American homes.
“As people have changed their spending habits and coin-intensive businesses and financial institution lobbies have become less accessible, the country’s coin is pooling in jars, in doorways. -car cups and in closed businesses, making it difficult for businesses in this country. to get the coin they need to support cash transactions.
The term “in circulation” simply means coins that are not currently in government storage. Coins in circulation can be found in cash registers, safes, piggy banks and, yes, hide between the cushions of your sofa.
I remember a long time ago rummaging through chairs and sofas trying to find enough parts to satisfy a soda maker. I remember hosing down my car one spring and finding about $ 10 of change that fell out of my pocket.
At that time, the left pocket of my pants was still ringing with a few coins. They were part of everyday life. Everyone had pennies and nickels on hand at all times. If you left the house without a room, you almost certainly came home with a few coins acquired during the day.
The times have changed. The pandemic has accelerated the experimental separation of society from money. The cashless society that sci-fi writers have long dreamed of is fast approaching. We were getting there anyway, but the COVID-19 disruptions freed many of us from coins.
For some segments of society, however, cash is still king.
“Low circulation affects almost everyone, but the hardest hit are the small businesses that rely on cash and the less affluent,” said Hannah Walker, member of the US Coin Task Force. “For millions of Americans, cash is the only means of payment.”
During the pandemic, many Americans have looked into purchasing at least some supplies online rather than at local stores. We ate less in restaurants during the pandemic. And when we shop in physical stores, we’re more likely these days to use a credit or debit card than cash. These changes in our national behavior translate into less work for the currency.
My pocket stopped ringing four or five years ago, the coins replaced by a piece of plastic. I still came home occasionally with a penny or two, but they went into a jar instead of being put back in my pocket for the next day’s transactions. I no longer used those lost coins – they just collected dust. Every few months my wife or I would take the pot to the bank. The coins were circulating in a one-way street in our house.
A year and a half after the start of the pandemic, coins here are at the end of a dead end. The coin jar is on the shelf, the few coins inside have not been disturbed since March 2020.
So I am part of the national parts shortage problem. I should deposit the contents of our coin jar in the bank. I won’t bother to look into the sofa cushions, as there is no possibility of coins slipping out of an empty pocket. I still keep a few pieces of it in my car for parking meters, but I can’t remember the last time I needed them.
A few weeks ago, the US Mint issued a statement regarding the coin shortage. He said, in part:
“Until coin circulation patterns return to normal, it may be more difficult for retailers and small businesses to accept cash payments. For millions of Americans, cash is the only form of payment, and cash transactions rely on coins to give change. We are asking the American public to start spending their coins, depositing them or exchanging them for currency at financial institutions or taking them to a coin redemption kiosk. “
Downtown Traverse City doesn’t appear to be suffering from a parts shortage. Last week, I conducted an informal survey of a handful of Front Street stores. Employees at Golden Shoes, What to Wear, Eleven and Espresso Bay all said they had no issues changing this summer. This is probably because most downtown businesses primarily deal with credit cards, not cash.
This is something that shouldn’t change anytime soon. America is moving closer and closer to a cashless society.