Businesses across Wisconsin are adapting to a recent policy change regarding pennies. The U.S. Treasury Department has halted penny production, citing the rising cost of manufacturing each coin, which now surpasses four cents. As a result, companies are adjusting their payment practices to cope with the ongoing penny shortage.
Impact of Penny Shortage on Businesses
Local businesses have begun notifying customers with signs indicating changes to their cash transaction methods. Many are rounding cash transactions to the nearest five cents. This trend is likely to become more prevalent as the shortage continues.
Responses from Local Financial Institutions
Financial institutions such as UW Credit Union are noticing significant changes due to this policy. Chris Frey, a representative from the credit union, mentioned that they are ordering and processing fewer pennies each year. “The vast majority of our younger members and our students are using digital methods,” Frey explained. This decrease in penny circulation is leading to fewer pennies being returned to cash drawers.
Shift to Digital Payments
The movement toward digital payment methods is reshaping the services offered by financial institutions. Frey noted that adapting to these changes includes developing new digital payment solutions. They are collaborating with various vendors and processors to ensure compatibility with their systems.
Adjustments by Major Retailers
Several large retailers in Wisconsin have also modified their penny policies. In October, Kwik Trip announced it would round cash transactions down to the nearest five cents. Similarly, McDonald’s adopted a policy to round up or down cash payments to the nearest five cents for those without exact change. Kroger, which operates Metro Market and Pick N’ Save, still accepts pennies but advises customers to provide exact change or opt for digital payments.
- U.S. Treasury: Paused penny production.
- Cost of production: Increased to over four cents per penny.
- Businesses’ practices: Rounding cash transactions to the nearest nickel.
This shift signifies a broader trend in Wisconsin and nationwide, as both businesses and consumers pivot to more efficient payment methods amid the challenges posed by the penny shortage. As digital transactions rise, it remains crucial for financial institutions and businesses to adapt effectively to meet customer needs.
