The End of the Penny: What It Means for You and Your Business

After 232 years in circulation, the U.S. Mint has officially stopped producing the penny.

On November 12, 2025, the last batch of one-cent coins rolled off the presses in Philadelphia, marking the end of an era in American currency. While pennies will remain legal tender, no new ones will be minted. So, why did this happen, and what does it mean for consumers and businesses?

Why Did the Government Stop Making Pennies?

The decision was driven by economics and practicality:

• Rising Production Costs: It costs nearly 3.7 cents to produce a single penny, far exceeding its face value. This inefficiency has persisted for nearly two decades, resulting in annual costs to taxpayers of millions. Ending production is expected to result in annual savings of approximately $56 million.
• Declining Use: With digital payments on the rise and cash transactions shrinking, pennies have become increasingly irrelevant in everyday commerce. Many end up in jars or drawers rather than circulating.
• Global Precedent: Countries like Canada, Australia, and New Zealand eliminated their smallest coins years ago with minimal disruption.

What Does This Mean for the Average Person?

• Pennies Are Still Legal Tender: You can spend them, deposit them at banks, or donate them to charity. There’s no recall, and billions remain in circulation.
• Minimal Financial Impact: Economists estimate rounding will cost consumers about $6 million annually, a negligible amount compared to overall spending.
• Rounding at Checkout: For cash transactions, expect totals to be rounded to the nearest nickel. Common practice:
  • Round down if the total ends in 1, 2, 6, or 7 cents.
  • Round up if it ends in 3, 4, 8, or 9 cents.
  • No rounding for totals ending in 0 or 5.

What Does This Mean for Businesses?

The transition poses operational challenges, especially for cash-heavy businesses:

• Short-Term Penny Shortages: Retailers are already struggling to make exact change. Many are rounding down to avoid legal issues, which can result in significant costs over time.
• Legal and Compliance Risks: Some states have laws prohibiting “cash discrimination,” which requires businesses to avoid rounding up transactions for cash customers. Failure to comply may result in lawsuits and penalties.
• Shift Toward Digital Payments: Encourage card or mobile payments to avoid rounding issues and reduce reliance on coins.
• Operational Adjustments:
  • Update POS systems for rounding.
  • Train staff to explain changes clearly.
  • Post signage to manage customer expectations.

Key Considerations for Businesses

1. Audit Your Coin Inventory: Determine how long your penny supply will last.
2. Implement Rounding Policies: Follow a consistent, fair method for cash transactions.
3. Communicate Clearly: Use signage and staff training to maintain trust.
4. Monitor Regulations: Stay updated on federal and state guidance regarding rounding and tax implications.
5. Plan for Digital: Make electronic payment options easy and accessible.

Bottom Line

The end of penny production is a practical move to save money and modernize commerce. While the impact on consumers will be minimal, businesses—especially those reliant on cash—must adapt quickly. By planning ahead and embracing digital solutions, you can transform this change into an opportunity for increased efficiency and enhanced customer satisfaction.