Penny Shortage Forces Restaurants To Round Prices As Treasury Halts Minting

A growing penny shortage is forcing restaurants and other businesses to rethink how they handle cash transactions. Earlier this month, the U.S. Treasury stopped minting pennies, citing the high cost of producing the one-cent coin. In Massachusetts, where businesses are required to accept cash, the impact has been especially noticeable.

In Boston’s North End, Theo Christo of Theo’s Cozy Corner has been saving pennies for months so he can keep giving customers exact change. He says staying cash-only helps him avoid credit card fees, but the shortage is making that increasingly difficult. Industry leaders say restaurants feel the impact more than most because the business runs on pennies when it comes to pricing and profit margins.

According to the Massachusetts Restaurant Association, businesses now face a dilemma: round up and risk upsetting customers, or round down and lose money. Small differences add up quickly for restaurants operating on thin margins, raising concerns about long-term financial effects.

National chains are already adjusting. McDonald’s told CBS News that some locations now round to the nearest nickel for cash payments, meaning totals like $1.22 drop to $1.20, while $1.23 rounds up to $1.25. GoTo Foods, parent company of Cinnabon and Carvel, is advising its franchisees to round in the customer’s favor.

Some customers say the penny’s relevance has faded as prices continue to rise. One visitor from Seattle said he might pick up a penny only for nostalgia, not value.

Congress is expected to weigh in on how cash transactions should work without pennies, especially in states where cash acceptance is mandatory.

Credit: CNN Wire
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