FMI-The Food Industry Association and nine other retail and financial industry associations have called on the U.S. Treasury Department to boost public awareness of the need for more coin circulation.
FMI said Monday that much of the $48.5 billion in coin now circulating is “sitting dormant” inside the nation’s 128 million households, continuing a shortage that emerged early in the COVID-19 pandemic. As a result, grocery retailers and cash-reliant grocery shoppers are still struggling to access enough coin for daily cash transactions.
In a letter sent Monday to Treasury Secretary Janet Yellen, the 10 trade groups called on the department to step up support for the U.S. Coin Task Force’s “get coin moving” campaign. The letter noted that the U.S. Mint lacks the capacity to produce enough new coin to make up for the circulation shortfall, which will impact retail customers unable to pay for goods and services via credit and debit cards.
“For the food industry, this coin supply disruption affects a grocer’s ability to complete cash transactions because they lack sufficient coin to make change at check out,” Christine Pollack, vice president of government relations at FMI, said in a statement. “This significantly limits the ability of millions of cash-reliant and cash-preferring grocery customers to buy necessary goods and services.”
Financial institution coin orders and deposits with the Federal Reserve (volume in bags)
Many armored carriers have reported FI coin vault inventory holdings that exceed pre-pandemic levels.
Besides FMI, organizations signing the letter included the National Grocers Association (NGA), National Association of Convenience Stores (NACS), Retail Industry Leaders Association (RILA), NATSO-Representing America’s Travel Plazas and Truck Stops, SIGMA-America’s Leading Fuel Marketers, American Bankers Associations, Credit Union National Association, Independent Community Bankers of America and National Association of Federally Insured Credit Unions.
“The pandemic affected consumer usage of coins by shifting a large number of transactions from cash-based, in-person payments to card-based payments and online sales. Additionally, when cash is used to make purchases, the coins received in change are often not used to make subsequent transactions,” the associations wrote in the letter. “The result is more coins resting in piggy banks and coin jars and fewer being recirculated and available for retailers to facilitate more transactions. This is a problem given that the majority of coin demand is met by recirculated coins.
“We ask that you and the Department of the Treasury use your platform and your voice to raise public awareness of this coin circulation slowdown and the need to get coin moving in the economy,” the organizations added.
In June 2020, the Federal Reserve announced that the COVID-19 outbreak “significantly disrupted” the supply chain and normal circulation patterns for U.S. coinage. That month, the Fed and its coin distribution sites began allocating supplies of pennies, nickels, dimes and quarters to depository institutions as a temporary measure to ensure a “fair and equitable distribution” of the current coin inventory.
At the time, FMI, NGA, NACS, RILA and other retail groups send a letter to Fed Chairman Jerome Powell and then-Treasury Secretary Steven Mnuchin to address the coin shortage. In the letter, they pointed out that cash represents over a third of all funds transacted in person by U.S. consumers and nearly half of all funds for transactions of less than $10.
In late 2020 and early 2021, coin circulation improved enough to enable the Fed to lift coin restrictions. Since then, however, coin circulation has slowed and coins are again being rationed. The “get coin moving” campaign urges consumers to use exact change in cash purchases, deposit coins at their financial institution or redeeming their change at a coin kiosk.
FMI said it joined the U.S. Coin Task Force in July 2020 along with the U.S. Mint, the Fed, armored carriers, bankers, coin aggregators and other retailers to help resolve coin supply issues. Other members include retailers Walmart and Target and coin aggregator CoinStar, among others.