Pennies Are Being Cancelled and the U.S. Mint Won’t Make Any More

“Pennies Are Being Cancelled and the U.S. Mint Won’t Make Any More. What Does That Mean?”

Introduction

For many decades, Americans have jangled pockets full of copper- and zinc-plated one-cent coins — the humble penny. It has been a fixture in U.S. currency since the 18th century, a symbol of everyday change and habit. But now, the one‐cent coin is heading toward retirement. In 2025 the Treasury announced that it placed its final order of penny blanks, and the U.S. Mint will stop making new pennies for general circulation once the existing inventory runs out. (People.com)

This article explores the full story: the motives behind the decision, the timeline of how it’s playing out, the consequences for commerce and everyday cash transactions, the arguments for and against scrapping the penny, and the broader implications.

History and Background: The Penny’s Journey

The penny (one-cent coin) dates back to the earliest years of the U.S. Mint in 1793. (Wikipédia) Over the centuries, its composition and role evolved: originally made primarily of copper, later zinc-based with a copper plating. for example, since 1909 the coin bears the portrait of Abraham Lincoln. (People.com)

For a long time the penny fulfilled practical roles: facilitating cash transactions, making change, supporting price points in commerce and being used in piggy banks, charitable collections, and everyday small-value cash use. But in recent decades, as inflation reduced its purchasing power and digital payments increased, the penny’s practical relevance diminished.

Costs rose: by 2024 the production cost of a penny was about 3.69 cents (i.e., it cost nearly four times face value to make one). (People.com) Meanwhile, many pennies simply sat unused, hoarded in jars or piggy banks, barely circulating. The Mint reported billions still in circulation even as output became inefficient. (https://www.wafb.com)

These economic and logistical realities set the stage for the policy shift.

What Changed: The Policy Shift

In February 2025, President Donald Trump publicly directed the Treasury Secretary to stop producing new pennies, describing the practice as “wasteful” and urging the elimination of the cost-inefficient coin. (People.com)

In May 2025 the Treasury formally announced it had placed its final order of penny blanks and would cease issuance of new pennies for circulation once the blanks were used up — expected in early 2026. (Reuters) The estimated savings from halting penny production were placed at around US$56 million annually. (Business Insider)

It’s important to note: this is not a legislative abolishment of the penny — the coin remains legal tender. What is happening is a decision to stop minting new ones for circulation. (Wikipédia)

Timeline and Implementation

Here is a rough timeline of how the phase-out is unfolding:

Early 2025: Treasury places final order for penny planchets (blank metal discs). (People.com)
Mid-2025: Mint begins winding down production; reports emerge of shortages of coins in banks/retail. (https://www.wafb.com)
Late 2025/Early 2026: New penny production ceases; existing pennies continue circulating. (AP News)
Going forward: Businesses and retailers adjust cash-handling practices (e.g., rounding) as pennies become scarce. (The Economic Times)

Some banks and retailers already report disruptions: for example, certain banks in Louisiana say shipments of pennies have been curtailed and some stores are rounding down cash transactions due to inability to provide exact change. (WKMG)

Why Eliminate the Penny? Economic Arguments

There are several key reasons cited by the Treasury and economists for stopping penny production:

Production cost greater than face value: Making a one‐cent coin costing ~3.7 cents is economically inefficient. (People.com)
Low circulation / hoarding: Many pennies are removed from active circulation, stored in jars or piggy banks, meaning the coin is not performing its intended cash-cycle role. (https://www.wafb.com)
Changing payment habits: With digital payments, credit/debit cards, mobile wallets, the use of physical cash — especially low-denomination coins — has declined.
Administrative savings: Eliminating production saves direct material and production costs (the ~$56m annual estimate) and reduces the overhead of coin distribution logistics. (Financial Times)
International precedent: Other nations (e.g., Canada) eliminated their one-cent coin years ago without major disruption, providing a model. (Business Insider)

From a purely economic standpoint, the argument is that the penny no longer justifies its existence when production costs, distribution inefficiencies and declining utility are factored in.

What It Means for Consumers, Businesses & Commerce

The discontinuation of penny production has practical implications for different stakeholders.

For consumers:

The penny will remain legal tender and can be used as change, so existing pennies are not invalidated.
Over time, new pennies will not be minted, so the supply gradually diminishes.
Those who use cash may notice fewer pennies in circulation. Some stores may round cash transaction totals to the nearest five cents (nickel). (The Economic Times)
Small implications for pricing psychology: businesses may adjust pricing strategies (e.g., avoid .99 endings).
Coin collectors may see older pennies become slightly more interesting or collectible.

For businesses/retailers:

Many report shortages of pennies and difficulties in making exact change. For example:

“We got an email announcement … penny shipments would be curtailed. … $1,800 in pennies the bank had were gone in two weeks.” (WKMG)
Retailers may need to modify cash-handling systems. Some are rounding down rather than up to avoid overcharging cash customers (and potential legal issues). (ABC News)
Some convenience chains have even offered incentives (e.g., free soda for bringing in 100 pennies) to manage the coin shortage. (ABC News)
State and local governments will need to update tax/transaction regulations to accommodate rounding and ensure fairness between cash and card payments. (People.com)
Some fear the shortage could add up: although a few cents seem small, across many transactions they accumulate. For example, one chain expects ~$3 million cost due to rounding down. (https://www.kwtx.com)

For coin distribution and the Mint:

The distribution network (e.g., coin terminals, armored carriers) is already seeing change: some terminals no longer handle penny deposits/withdrawals, exacerbating region-by-region shortages. (https://www.wafb.com)
Overhead associated with penny production, shipping, sorting and handling declines.
The Mint continues minting other coins (nickels, quarters, dimes etc.), so the overall coin production infrastructure remains.
True elimination of the penny would require legislative action; what is occurring now is a cessation of minting for circulation.

The Case Against Eliminating the Penny

Despite the economic rationale, there are arguments opposing the phase-out of the penny.

Symbolic/cultural value: The penny has historical significance and sentimental value to many Americans. It features Lincoln, has been part of U.S. coinage for over 230 years. (AP News)
Charitable collections: Pennies are often used for school drives, piggy banks, coin jars; some argue eliminating them removes a low-value entry point for charitable giving.
Retail and pricing impact: Critics warn that rounding (especially up) could disadvantage cash users, particularly low-income individuals who still rely on coins and cash transactions. Some states/cities have legal protections. (https://www.kwtx.com)
Nickel and other coin inefficiencies: Some argue that if the penny is eliminated without addressing the nickel (five-cent coin) which also costs more than face value (~13.78 cents to make) the government is only solving part of the problem. (Financial Times)
Legislative process: Some believe the move should be done via Congress rather than administrative decision, to ensure fairness and rule changes (e.g., rounding laws) are established.

These points illustrate that while the penny may be economically impractical, the decision is not purely technical: it touches on social equity, commerce practices, and national symbolism.

What Happens Next: Rounding, Legal Tender & Transition

With no new pennies being minted, what will happen practically?

Rounding: Many expect cash transactions will be rounded to the nearest 5 cents (nickel). For example, price totals ending in 1–2 c will round down to 0 c, 3–4 c may round up to 5 c. This system has precedent in other jurisdictions (e.g., Canada after its penny elimination). (People.com)
Legal tender status: Existing pennies remain valid and will circulate. They will fade gradually as coins wear out or are lost, but will not be removed forcibly. (Wikipédia)
Retail regulations: States and localities may need to amend regulations about cash transaction fairness, rounding rules, and pricing disclosures. Some legal complexities already observed. (ABC News)
Distribution management: As the stock of pennies becomes depleted, banks and armored carriers may stop ordering pennies altogether; regional shortages may intensify before the total supply stabilises. (https://www.29news.com)
Collectibility: With no new production, existing penny rolls or special mintages may become more valuable among numismatists (coin collectors). The Mint may continue minting pennies for collectors, even if not for general circulation. (Wikipédia)

Broader Implications: Economic, Social, and Monetary

Beyond the immediate logistics, the elimination of penny production carries broader implications.

Economic

Savings: Estimated ~$56 million annually in material/production cost. Over many years, cumulative savings scale.
Cash handling cost reduction: Fewer pennies to handle, transport, sort — could improve efficiency in banks/retail.
Inflation and pricing psychology: Removing the smallest denomination may affect how businesses price items (e.g., ending prices in .99), though digital payments mitigate this.
Potential redistribution of costs: If rounding policies are not carefully regulated, cash users (often lower income) may be disadvantaged relative to card users.

Social/Behavioral

Changing cash culture: While coins and physical change persist, the move signals another step toward a less-coin-centric economy.
Charitable/educational coin jars: Communities that rely on coin drives may need adaptation.
Regional impacts: Areas with heavy cash usage may feel the shift more acutely.

Monetary / Currency system

Minimal impact on the overall money supply: Pennies represent a tiny fraction of value in circulation, so macro-monetary effects are negligible.
Precedent: Other countries (Canada, Australia, New Zealand) eliminated their low-denomination coins with minimal disruption; the U.S. moves into that camp. (Business Insider)
Mint strategy: The U.S. Mint and Treasury may re-evaluate the coinage portfolio (e.g., look at nickel, efficiency of coin production, digital currency trends).
Payment system evolution: With digital, contactless and mobile payments rising, the need for small-value physical coins continues to decline.

Challenges and Risks in the Transition

While the decision is largely sensible, the transition isn’t without challenges.

Short-term coin supply strain: As the article reports, some banks and retailers already face penny shortages; certain coin-distribution centers have shut penny operations. (https://www.kgns.tv)
Retailer legal/regulatory risks: In some jurisdictions it is illegal to round up unless mandated; some stores are rounding down to the nearest nickel to avoid overcharging cash customers, but that can erode margins. (https://www.wafb.com)
Public sentiment and resistance: Some parts of the public value the penny (emotionally or culturally). Eliminating it may generate backlash or misunderstanding.
Inflation and pricing concerns: Critics argue that removal of the penny may subtly lead to upward rounding of prices over time, especially for cash transactions, which may affect low‐income consumers disproportionately.
Nickel and other coin inefficiencies persist: Focusing solely on the penny may be seen as partial fix; the nickel also costs more than face value (~13.78 cents to make) and may require future attention. (Financial Times)
Implementation complexity: Adjusting tax receipts, pricing systems, vending machines, coin-change machines, and cash registers to rounding may require investment and coordination across many businesses.

What Should Consumers and Businesses Do?

For consumers:

Be aware: Over time fewer pennies will be available; if you pay in cash, you may be asked to accept rounding to the nearest 5 cents.
Save/wrap: If you have jars of pennies, they may retain nominal face-value but could become slightly more collectible.
Check with your bank: Some banks may no longer supply pennies; if you need coins (for e.g., vending machines, transit) plan ahead.

For businesses / retailers:

Review your cash-handling systems: Ensure POS systems can round properly and comply with local regulations.
Communicate with customers: Especially if rounding policies change or you adjust pricing.
Update coin-machines and change-systems: Vending, tolls, arcade machines, parking meters may need adjustments.
Liaise with coin suppliers and armored carriers: Be aware penny supply constraints and plan alternative change-making approaches (e.g., offer nickel/dime change).
Monitor regulatory changes: Many states/localities may issue guidance on rounding and cash transaction fairness.

For banks/coin-distributors:

Track inventory: Since withdrawal of penny shipments is already occurring, adjust logistics accordingly.
Consider alternative coin-mixes: As pennies decline, shift focus to nickels, dimes, quarters.
Educate customers: Especially small branches or check-cashing facilities that rely heavily on coin change.

What Does This Mean Long Term?

In the long term, the era of the penny as a minted circulation coin is effectively coming to an end. But what does that imply for the broader economy and monetary system?

The impact on inflation or consumer pricing is expected to be minimal. Pennies account for a tiny share of overall currency value, and digital/credit payments dominate many transactions.
The transition may accelerate cashless payment adoption, as coins become less convenient and fewer in supply.
One could expect further coinage review: if the penny is eliminated, questions may arise about the nickel, dime, quarter, perhaps leading to coin-portfolio optimisation (e.g., via material changes, reduced production runs).
Symbolically, the move marks another step in evolution of money: from physical coins toward digital form, but the penny’s legacy remains in currency history.
Collectibility may increase: With final minting done (for circulation) the last years of pennies may become interesting to numismatists, perhaps increasing demand for special mint sets, rare dates/varieties.
Government cost-savings accumulate: Although the annual savings (~US$56 m) are small relative to federal budget, over decades the cumulative waste avoided may justify the policy.
Cash equity/social impact must be monitored: Ensuring that cash users, especially lower-income populations, are not disadvantaged in rounding practices is important from a fairness and public-policy standpoint.

Final Thoughts

The decision by the U.S. Treasury and U.S. Mint to cease new penny production is economically sound and follows logic that many other nations have already chosen. The penny — once a staple of U.S. coinage — has largely outlived its practical usefulness in an era of digital payments and inflation.

However, the move is not just about cost-savings. It touches consumer behavior, retail practices, cash-handling logistics, legal/transaction fairness, national symbolism and collector culture. The transition will require coordination among government, businesses, financial institutions and the public.

For everyday Americans, the change may show up subtly: fewer pennies in change jars, some cash transactions rounded, maybe a mental shift that “one cent” just isn’t what it used to be. But the penny will not suddenly disappear from pockets overnight — existing coins remain valid and circulation will fade gradually.

Ultimately, the penny’s departure marks the end of an era. It is a small change in physical currency, but one that reflects larger shifts in how we handle money, pay for things, and perceive value in a modern economy. The “penny for your thoughts” may now seem dated — but the transition is a pragmatic reflection of evolving times.

Whether you’re a coin collector, a convenience-store owner, or someone who still reaches into your couch for spare change, the era of new pennies is over. What comes next is rounding, adaptation and a currency system increasingly fit for the digital age.