Penny Circulation and Your Business
After more than a century in pockets, purses, register trays, and “take-a-penny” cups, the U.S. penny is entering retirement. The U.S. Treasury has officially ceased production of new pennies. As a result, the Federal Reserve has limited distribution, which will eventually create a constraint on the supply available to financial institutions, including ours. Eventually, we anticipate that this change will affect our ability to meet normal demand.
At Peoples Bank, we are committed to supporting our valued business customers through this transition to the best of our ability.
- We will continue to supply “standard” order of coins for Peoples Bank customers for as long as pennies last, we are not able to fulfill “stockpile” orders.
- We will continue to provide exact change for cash transactions as long as supplies last.
- We encourage businesses to adopt payroll direct deposit to minimize employee check cashing. For those without an electronic payroll solution, our Treasury Management team is eager to assist, contact them at 828-468-4065 or treasurymanagement@peoplesbanknc.com.
- All digital and card payments will still support exact amounts.
- We encourage businesses to stay informed about federal guidance regarding this change and to plan accordingly. This may include reviewing pricing, point-of-sale systems, and internal procedures.
- Pennies will still be legal tender and remain valid for purchases, deposits, and payments.
- Over time, as fewer pennies circulate, some merchants may round cash transactions up or down to the nearest five cents – similar to what other countries have already adopted successfully.
- We discourage hoarding pennies, since keeping coins out of circulation makes them more challenging for others to access.
Reduced availability of pennies highlights the efficiency and convenience of digital transactions, which are not affected by rounding. We encourage businesses to promote electronic payment methods to their customers.
This is also an ideal time for businesses to streamline their own payment processes. Our Treasury Management services provide tools to enhance cash flow and minimize reliance on physical currency. We can help implement:
- ACH & Direct Deposit: Efficiently manage payroll and collect recurring payments.
- Vendor Payments: Securely pay suppliers electronically.
Adopting these services can help avoid the challenges of coin shortages entirely.
For questions about change orders, please contact a local branch. To learn more about our Treasury Management and ACH services, please contact our Treasury Management team at 828-468-4065 or treasurymanagement@peoplesbanknc.com.
