Coin shortage … but is it really happening?
Note from Jill Parsons, MOV Chamber of Commerce:
Our Guest Columnist today is Sharon Anderson who was recently named the President & CEO of Williamstown Bank. After seeing one social media post too many from well-meaning people about a coin shortage conspiracy, I thought “let’s talk to an expert” and find out what’s going on. So, here you go!
First it was toilet paper, then wipes and sanitizers, followed by chicken and pork, and now the latest victim of COVID is the disappearance of…..coin? It seems odd that something like coin would experience a “shortage” during the pandemic, as we all have tons of it laying around our houses. So why are stores unable to make change or why is it difficult for even banks to get coin during the pandemic?
The answer is two-fold.
For months across the country, businesses were shut down due to efforts to “flatten the curve” of the COVID pandemic. Due to that, less coin was being circulated through the regular course of business at places like laundry mats, gas stations, and other places that then will bring excess change to their financial institution for deposit, allowing the bank to reissue/recirculate that coin to another business or entity.
The U.S. Mint also had to halt or slow production of new coin due to restrictions put in place on staffing during the initial stages of the pandemic, which did have some effect on the availability of coin. However, only a fraction of coin in circulation comes from the U.S. Mint each year. In fact, only 17 percent of coin in 2019 came directly from the U.S. Mint. (Side note: so that means that the rest of the coinage in circulation is already out in the hands of the public and comes back into the system from retail purchases and third-party coin processors.)
As businesses across the country began to reopen over the past few months, the demand for coin grew at such a fast pace, supply couldn’t keep up. Banks are limited on how much they can order, and businesses then become limited on what they have to distribute as change. (Side note: Banks do not keep rolls and rolls of every coin denomination in their safes. They actually order coin on a regular basis from the Federal Reserve and it is shipped from the Federal Reserve Bank location that covers our region to the local branches.)
The “shortage” is more of a disruption in circulation that should be corrected over the coming months as the economy recovers and more businesses reopen.
What can you do to help?
You can help reintroduce coin into circulation by bringing your wrapped coin to banks or using exact change to make purchases when buying with cash. One thing to remember, small businesses, many of whom run on thin margins during normal circumstances, have taken a huge hit this year with having to close for a long period of time as we grapple with the coronavirus. Please do not boycott these businesses because of yet another issue out of their control. Our community depends on these businesses, and they need your support now more than ever.
Closing thoughts from the 7/23/20 statement from the US Mint:
Until coin circulation patterns return to normal, it may be more difficult for retailers and small businesses to accept cash payments because they are unable to make change. For millions of Americans, cash is the only form of payment and cash transactions rely on coins to make change. We ask that the American public start spending their coins, depositing them, or exchanging them for currency at financial institutions or taking them to a coin redemption kiosk. The coin supply problem can be solved with each of us doing our part.
Visit this space every other Saturday for more Chamber news. We also invite you to call us at 304-422-3588 or email us at email@example.com. The Chamber office is located at 501 Avery Street, 9th Floor in Parkersburg — we are currently open by appointment only.
Sharon K. Anderson is the President & CEO of Williamstown Bank.