Now that the United States has officially stopped making pennies, a nationwide scramble is underway among gas stations, fast-food chains, and major retailers to adjust prices and handle cash transactions — a shift that could quietly erode profits for many high-volume businesses.
The transition follows President Donald Trump’s decision earlier this year to halt production of the one-cent coin, citing rising minting costs and declining demand for cash payments. While economists long debated the usefulness of the penny, retailers say the abrupt policy change is creating chaos at the checkout counter.
According to a report from Reuters, pennies are disappearing from circulation faster than most businesses expected. Retail groups and industry associations say they have received little federal guidance on how to handle cash rounding, leaving companies to make their own rules — or risk upsetting customers and running afoul of state laws.
“We’re in uncharted territory,” said one retail lobbyist who asked not to be named while negotiations with federal agencies continue. “We can’t round up without angering customers, and rounding down means we’re losing money on every cash sale.”
The practical headaches are widespread. Convenience stores and gas stations are updating point-of-sale systems to automatically round totals to the nearest five cents. Fast-food chains are revising menu boards to show rounded prices, while big-box retailers are warning shareholders that small rounding losses could add up across millions of daily transactions.
Some businesses, particularly in low-margin industries, have chosen to round down rather than risk consumer backlash. The National Retail Federation estimates that the cumulative impact could cost U.S. retailers tens of millions of dollars annually if customers continue to pay in cash at pre-pandemic rates.
The U.S. Mint officially ended penny production this spring, noting that it cost 2.8 cents to make each coin. While digital payments dominate most transactions, about 12% of all retail purchases are still made in cash — a small share, but one that adds up across the nation’s more than 1 million retail locations.
Economists say the change could also have psychological effects. For decades, retailers have priced goods at $4.99 or $9.99, a strategy known as “psychological pricing.” With the penny gone, stores are rethinking whether to shift prices to even numbers or risk customer confusion.
“It sounds trivial, but that last cent mattered,” said Janice Monroe, a consumer behavior expert at the University of Michigan. “It shaped how people perceived value. Now retailers are having to retrain customers — and their cashiers.”
Some states are already stepping in. Legislatures in California and New York are drafting bills to standardize rounding rules to avoid confusion and potential consumer lawsuits. In others, like Texas and Florida, businesses are lobbying for federal guidance rather than a patchwork of local laws.
By DNU staff