After months of The last 1 cent coin in the United States After pressure, some states began offering their own two cents on the penny problem by setting rough guidelines for cash purchases.
Early last year, President Donald Trump announced the end of the penny productionSaying it was extravagant. The cost of making each 1-cent coin will be 3.7 cents in 2024, according to the U.S. Mint. This step led to a Shortage of pennies at the cash registers last summer, forcing consumers and businesses to face a bankrupt future where it will be difficult to make precise change.
The Treasury said it would continue distributing the approximately 114 billion pennies in existence “for as long as possible.” Pennies must still be accepted as payment.
One solution to the penny problem is to round to the nearest nickel, using a practice called symmetric rounding. If the final price, after taxes, ends up being one, two, six or seven cents, paying cash is less. For example, $1.91 or $1.92 becomes $1.90. If the price expires after three, four, eight or nine, the cashout is rounded up. For $1.98 or $1.99, the consumer pays $2.
A bill introduced last year in Congress and approved by the House Financial Services Committee would implement similar rounding across the country. U.S. Rep. Lisa McClain, Republican of Michigan, said in an email that the federal law is important to prevent a “confusing mix of state policies.”
The bill has not been voted on in the House of Representatives and will still need to pass through the US Senate before it reaches Trump’s desk.
Meanwhile, bills to address bankrupt cash transactions have passed both chambers and are awaiting the governor’s signature in Arizona, Florida, Oregon, Tennessee, Virginia and Washington. Some states are proposing to allow businesses to round up cash purchases, while others are considering requiring it.
And in Indiana, a bill was signed into law this month by Republican Gov. Mike Brown that tells businesses they must round up cash purchases for all transactions that don’t end in a zero or a five. Lawmakers revised that provision in a second bill that would make rounding optional, which would take effect Sunday if Brown signs it into law.
In both bills, Indiana businesses can choose to always round cash purchases to the nearest nickel, always round up, or round up or down depending on the amount.
In Republican-led Tennessee, legislation makes symmetrical rounding exempt from legal claims under the state’s consumer protection law but does not require rounding.
“It’s providing a safe haven for private companies,” Republican Rep. Charlie Baum, the bill’s sponsor in Tennessee, said during the debate.
Rough bills have been introduced in about two dozen states since late last year, according to an Associated Press analysis using Collection billing tracking service.
Outside of legislatures, some state agencies have published guidelines advising that rounding should occur after taxes, and that businesses should ensure that the full taxable amount still goes to the state.
Cash has not been used everywhere since the advent of electronic payment methods. However, about 8 in 10 American adults said they had recently used cash in a 2024 survey by the Federal Reserve. Cash was used more often by the elderly and members of low-income families.
The closet Books online Prices “will be rounded down as much as they will be rounded up, so there should be no overall impact on consumer prices.”
But researchers at the Federal Reserve Bank of Richmond used a 2023 survey to show that rates that didn’t end in a zero or a five were particularly likely to end in an eight or a nine. Payment amounts can vary when purchasing multiple items or depending on the tax rate, but in general, rounding up prices will often result in businesses earning millions of dollars and consumers losing collectively, which amounts to a few pennies lost per person.
As companies introduce rounding, some Americans have taken to social media to say they feel cheated, even if it’s just a penny or two at a time.
Nikki Capuzzo-Hennessy, 50, said she tends to pay in cash because it makes her more conscious of her spending. The Trumbull, Connecticut, resident posted her grocery store receipt online when she noticed the rounding adjustment on an $8.73 purchase, with tax. The store chose to round down and I got three cents.
Capuzzo-Hennessy said it can be stressful if she has to hand over extra pennies every time, but she also thinks it’s practical to stick to one rule. She runs a food truck business and said they would probably use symmetrical rounding to be consistent.
“At the end of the day, it costs three cents, but I can imagine that with all the purchases you make, it could add up,” Capuzzo-Hennessy said.
Washington state Rep. April Berg, who introduced the roundup bill there, said she understands people who are frustrated by losing a penny, but demonetization leaves few options.
“We made sure everyone was allowed to pay exactly what they owe,” Berg said of her legislation.
The Treasury Department says halting coin production would save $56 million annually, but rounding could increase demand for nickel. The 5-cent coins are also expensive to make, with each costing roughly 14 cents in 2024, according to the Mint.
Currently proposed federal legislation includes a potential cost-saving solution, allowing the Treasury Department to adjust the composition of the coin to use cheaper zinc and nickel instead of copper and nickel.