Coin Shortage Blamed On Consumer Demand And COVID-19
WINDSOR, Colo. (CBS4) -- It's long been said "cash is king." However, amid the COVID-19 pandemic, coins have suddenly become the form of currency most sought out by many businesses.
A coin shortage nationwide has forced many cash and change-dependent companies to offer incentives for their customers to pay with coins or trade them in.
BOK Financial's Marisa Famariss told CBS4's Dillon Thomas the start of the coin shortage can be directly traced back to the U.S. Mint's reduction in coin production long before COVID-19 was in our wildest dreams.
"The U.S. Mint has decreased production over the past five years because demand has gone down," Famariss said.
As many people stayed home, and businesses closed doors during the pandemic shutdown, coins were stored away. Some chose not to use them to avoid contact and transmission of the virus, while others simply chose to start using credit and debit cards more. Many have also decreased the amount of money they used to spend out to eat and on entertainment like casinos.
"Currency and coin circulation has been down tremendously," Famariss said. "The tooth fairy might start paying with gift cards."
Bars, banks, gas stations and more have been offering incentives to customers for using coins. Some, like one brewery in Denver, offered to buy coins. Some were able to trade their coins for cash, and were given a beer as a thank you.
"Washing machine vendors, or certainly just stores, they depend on that (change) from their customers who don't like, or don't use, a credit or debit card," Famariss said.
Kroger, the parent company of Colorado's King Soopers, announced customers will be allowed to have their remaining balance credited to their loyalty card or donated to a charity.
The company issued this statement to CBS4:
We remain committed to providing our customers with an uplifting shopping experience and the freedom and flexibility to choose their payment method, including cash, during this unprecedented time.
The Federal Reserve is experiencing a significant coin shortage across the U.S., resulting from fewer coins being exchanged and spent during the COVID-19 pandemic. Like many retailers and businesses, we are adjusting to the temporary shortage in several ways while still accepting cash.
Customers can switch their payment type (e.g., use debit or credit vs. cash), and through our upgraded technology, we can now load coin change to their loyalty card for use during the next shopping trip, provide coin change at a lane with coins available or round up their order to support The Kroger Co. Zero Hunger | Zero Waste Foundation, a public charity committed to creating communities free of hunger and waste.
It is said the U.S. Mint has ramped up production of coins to eliminate the issues. The U.S. Mint told CBS News they were producing 1.5 billion coins a month. Coins would then be more highly distributed to banks, which are currently being limited on their supply.
While adults are encouraged to either spend, or trade in, their stash of coins, children can also help out in the shortage.
"I've been encouraging our children to open that bank account, that savings account, and deposit that piggy bank," Famariss said.
