COVID-19 Coin Shortage Challenges Cash-Based Businesses
The Treasury is producing more coins than usual to help replace them, but some small businesses are taking matters into their own hands.
First it was hand sanitizer. Then it was toilet paper. Now the U.S. is seeing a coin shortage, and the Treasury is asking for help.
The U.S. Mint, the part of the Treasury that produces coins, is encouraging Americans to spend, deposit, or exchange coins for cash. The bureau warns retailers will have a hard time accepting cash payments until circulation returns to normal.
Some businesses aren't waiting around, transitioning from coin-based to token-based operations. Ken Shaner manages sales for a private token manufacturer in Ohio.
"Primarily we're seeing laundromats, we're seeing car washes, bars and arcades," said Shaner, sales director at Osborne Coinage, a private mint.
The government is producing more coins than usual to help, but consumer spending is still nowhere close to pre-pandemic days. Shaner says it's a trend we should get used to.
"We believe that the coin supply is still going to be very tight into next year," Shaner said.
One of the reasons for the shortage is the increase in contactless payment as a way to avoid spreading COVID-19. It's welcome news for credit card companies.
Visa saw an increase in online spending and contactless cards, according to the company's second-quarter earnings report. The company expects that to accelerate post-COVID.
The good news is the Mint says the shortage can be solved if consumers spend their spare change, as the government tries to make more of it.
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