The sign on the drive-thru window at the Jack’s restaurant in Boaz read, “We will buy your rolled coins.” Not a sign you see very often, but one necessitated by the recent COVID-19 pandemic.
Last week, the Federal Reserve announced the flow of coins has slowed or stopped due to the COVID-19 pandemic as many retailers have closed or cut hours.
“What’s happened is that, with the partial closure of the economy, the flow of coins through the economy has gotten all — it’s kind of stopped,” Federal Reserve chairman Jerome Powell said during a virtual hearing with the House Financial Services Committee last Wednesday.
That’s because the supply chain that coins usually flow through has been interrupted during the pandemic, Powell said.
“The places where you go to give your coins, and get credit at the store and get cash — you know, folding money — those have not been working. Stores have been closed,” he said. “So the whole system has kind of, had come to a stop.”
Peoples Independent Bank President Royce Ogle said the problem isn’t just a local issue, but a nationwide phenomenon.
“It’s mostly pennies, from what I have heard,” Ogle said. “I don’t know why people would hoard them. There is no real metal value in them anymore.
“I believe as soon as the U.S. Mint cranks back up, this problem will be resolved. It’s only a temporary issue.”
What can the average consumer do to help?
• Pay with a debit card or check, eliminating the need for change.
• Pay with the correct change.
• Use apps like ApplePay to make purchases.
• Take your piggy banks, cup holders full of coins and all loose change to the bank or a coin counter machine at the local grocery. The machines will automatically count the change and provide a receipt to be taken to a cashier for cash payment. The machines may also give an option to give the money directly to charity or provide the customer with an electronic gift card valid at various national chain stores and restaurants.
Nationally, the Federal Reserve Banks began the “strategic allocation of coin inventories” this week to evenly distribute coins across banks and credit unions. Those “strategic allocation” measures include imposing order limits based on the historic order volume of those coins and how many coins the US Mint is currently producing.
In the meantime, the Federal Reserve is working with the Mint to produce more coins and lift supply constraints. The Reserve encourages institutions to order only the amount of coins they need to meet customer demand in the short term.
“Although the Federal Reserve is confident that the coin inventory issues will resolve once the economy opens more broadly and the coin supply chain returns to normal circulation patterns, we recognize that these measures alone will not be enough to resolve near‐term issues,” the Reserve Banks statement said.
Federal Reserve officials believe the shortage is temporary, Powell said.
“As the economy reopens, we’re seeing coins begin to move around again,” he said.