ROGERSVILLE — Quick ... gather up all of that loose change that’s hiding under those couch cushions and in that piggy bank or Mason® jar you’ve been dropping coins into forever, and take those to a local bank or business and trade them for “folding money”.
It’s no joke or hoax: the signs you see posted at fast-food restaurants, grocery stores, banks and other places where coins normally change hands are accurate: customers are being asked to use “correct change” or credit/debit cards whenever possible because coins are in short supply.
”Due to the national coin shortage, we can only accept exact change or electronic card payment at this time,” reads a sign posted at one Hawkins County establishment.
The shortage involves a multi-pronged dilemma created as a direct result of the COVID pandemic, according to the Tennessee Bankers Association.
When COVID-19 restrictions went into place, establishments like retail shops, bank branches, and laundromats — the typical places where coin enters society — closed, it significantly slowed the normal rate of coin circulation, TBA said. Consumers then migrated to shopping online or, if in person, using debit and credit cards to avoid physical contact associated with using cash. The coins that they would have received in change were then not being circulated back into the system.
“In the beginning of 2020, more than four billion coins were deposited — or recirculated — each month,” said Colin Barrett, president and CEO of TBA. “Those numbers dropped to less than two billion beginning in April.”
As businesses are reopening, demand from merchants to stock their coins at higher levels is increasing, but a large number of coins still remain in consumers’ hands, TBA added, which is creating a critical issue because recirculated coins represent more than 80% of the supply, with the remaining amount being new coins produced by the Mint.
“There is adequate coin in the economy, however the slowed pace of circulation means that a sufficient amount of coins is not readily available where needed,” said Barrett. “If you have spare change, we encourage Tennesseans to check with their local bank to see if they are accepting rolled coins, use exact amounts when purchasing items, or deposit them in grocery store coin-cashing machines.”
As of April 2020, the U.S. Treasury estimates that the total value of coins in circulation is $47.8 billion, up from $47.4 billion as of April 2019.
Another influencing factor in many locales is that people, worried about a possible economic depression, began stockpiling or hoarding coins.
Add to that the fact that production of new coinage was suspended temporarily for several weeks when the U.S. Mint’s various production facilities were idled earlier this year because of the pandemic, and you have the proverbial “perfect storm”.
In a typical year, hundreds of millions of coins of all denominations, ranging from pennies, to nickels, to dimes, quarters, half-dollars, and dollars are struck at Mint facilities in Philadelphia, PA, West Point, NY, Denver, CO, and San Francisco, CA.
“We can only distribute to businesses the coin supplies we have, and when those are gone, they’re gone until we get another shipment,” said one local banker who asked that his name not be used. “This is the first time in all of the years that I have been a banker that I can remember something like this happening. Who would have ever thought that COINS would be in short supply? What would help locally is if people would gather up their ‘pocket change’ and bring it and trade it for paper currency. And when you go out to shop, use coins to pay for your purchases whenever possible. Every little bit that we can get back into circulation will help.”
Tyler Clinch, CEO and President of First Community Bank of East Tennessee, echoed those sentiments and told the Review and Eagle that FCB is even offering a gift for persons who bring in their “change”.
“At First Community Bank of East Tennessee, we are working diligently to help our small businesses during this coin shortage,” Clinch said. “We are asking for the community’s help in supplying coin to keep our local retailers flourishing. We’ve added coin counters at our West Main and East Main, Rogersville; Church Hill; and downtown Kingsport locations. These are open to the community at no charge. Anyone who brings in $50 or more will receive a FCB piggy bank while supplies last.”
Richard “Dick” Yowell, President of Civis Bank, told the Review and Eagle that banks right now are indeed limited in the amounts of coins they can get from the Federal Reserve.
“We get reduced amounts no matter how many we order,” he said, adding that nickels are especially in short supply.
Yowell said that while some banks charge a fee to count and process coins for customers who bring in large quantities of “un-rolled” coins, Civis Bank will do that at no cost for anyone who brings in coins and exchanges them for paper currency.
“I believe as businesses re-open, and with all of the steps the Fed is taking, by the end of the summer this shortage will probably go away,” Yowell said.
Recently, Federal Reserve banks began allocating stocks from existing coin inventories to banks as a temporary measure, and as the mint’s facilities come back into full production, more business re-open, and commerce begins to fully flow again, the shortage will ease, but for right now, local banks agreed, it is a very real situation they — and local businesses — are having to deal with.