Making Cents of the End of Penny Production

New copper pennies have not been minted since August 2025, but the impact has not extended to Frandsen Bank and Trust customers due to the volume of pennies still in circulation in our markets. Businesses that accept cash payment should begin thinking about operations and policies that may be impacted when the supply does run out.

Penny Production Halts, Usage Continues

In February of 2025, the president directed the U.S. Treasury to stop producing new pennies as part of an effort to reduce government spending. According to the government, it cost nearly 4 cents to produce and distribute each penny. The U.S. Mint reportedly delivered its last shipment of new pennies in August. However, an estimated 250 billion pennies are still in circulation.

While the nation is starting to see a noticeable decline in the circulation and availability of pennies, banks in our area are operating normally. Currently, Frandsen Bank & Trust continues to accept pennies and fulfill orders for pennies. The supply in our area will eventually decline, and there will not be a long notice window when new pennies are no longer available.

What Businesses Can Do When Pennies Run Out

Pennies are still legal tender and can continue to be used for purchases or deposited at your bank. The banking industry is monitoring coin circulation closely, and working with the Federal Reserve, the Treasury Department, and other stakeholders in order to manage supply.

This is a nationwide issue and it will eventually affect everyone. Here are three ways to prepare for a potential coin shortage.

1. Switch to electronic payments. Electronic payments are unaffected by the phasing out of the penny, and will continue to be processed at exact amounts with no rounding.

2. Consider rounding policies. Retailers and banks may begin rounding transactions to the nearest five cents.

3. Communicate Clearly: Businesses should establish clear internal procedures for handling cash transactions and post relevant notices for customers. This will promote customer trust and minimize confusion during the transition.

Additional information is available via the U.S. Mint, the U.S. Department of Treasury, and the Federal Reserve.