Why is there a coin shortage? It has to do with supply and demand
COVID-19 has caused many changes in the way we do things. And in the way we shop, especially with cash. Numerous stores, including national chains, have been experiencing a coin shortage. Signs posted ask customers for correct change, rounding up to the next dollar, or for using cards for purchases. Even customers wanting to get change from local banks may experience a challenge getting change back. So, what is the deal? Why is there a coin shortage? Trina Smith is a teller supervisor at Centennial Bank in Jonesboro. She explains what is going on.
“The pandemic disrupted the normal circulation patterns for U.S. coins,” says Smith. “Coin deposits from depository institutions declined significantly, and the U.S. Mint production of coin also decreased. This happened to protect the Mint employees from COVID-19.”
Smith says the U.S. Mint stopped producing coins for a couple of weeks, and it became a supply and demand issue.
“Banks were still ordering and coin order levels began to increase as regions reopened, and that led to the Federal Reserves’ coin inventory being reduced to below-normal levels,” says Smith. “When that lowered, the Fed decided to ensure that there was a fair and equitable distribution of existing coin inventory. As a result, some limits were put in place as to what financial institutions can order as far as coin.”
Smith says Centennial Bank was only able to receive about 30 percent of the coin that it would have normally be able to get. And that was reflected to some customers. Vice President of Retail Banking and Marketing at First National Bank Blake Guinn tells how they have been dealing with the shortage.
“We need to have change for our customers that present notes to our bank,” says Guinn. “Our number one priority is making sure our customers get exact change and so we have had to hold on to our coin for in-branch and customer obligations,” says Guinn. “We may have a customer that comes in and needs $200 in quarters, and we may give that customer $100 dollars in quarters based on our estimated demands for that day.”
Guinn says there are certain denominations they are specifically low on.
“We are having a lot of trouble with quarters and pennies. We have got about all the dimes and nickels we want,” says Guinn. “That works for some people and that is how we are having to do it because we need to have the change in branch.”
Both Guinn and Smith say many customers have taken their coin jars to the bank to turn in change for cash. And both say this is a temporary issue that should fix itself and rebound again in the next few weeks.