The way people spend money has changed over time. Not too long ago, waiting in line at the cash register while someone filled out a check was a common occurrence. Many people use credit cards or other electronic forms of payment nowadays, but cash is still the go-to option for some people.
Using cash often results in a buyer getting change. But one viewer emailed VERIFY saying they recently went to a couple of stores and couldn’t get change and was told it was because of a coin shortage.
Is there a coin shortage in the U.S.?
No, there is not a coin shortage in the U.S., but there is a circulation problem.
WHAT WE FOUND
The U.S. Coin Task Force was formed in July 2020 and is made up of members from 11 groups including the U.S. Mint, Federal Reserve, American Bankers Association and the National Association of Federal Credit Unions. The task force says the COVID-19 pandemic disrupted the U.S. coin supply chain.
“Coin circulation has once again emerged as a disruption caused by the COVID-19 pandemic. Many have referred to this as a shortage; however, it is not,” the task force said in a May 2021 statement.
The Federal Reserve, which is the central banking system for the U.S., says there is an “adequate” number of coins in the economy, but circulation has not returned to pre-pandemic levels.
As a result, in May 2021, the Federal Reserve placed a cap on coin orders from depository institutions. The goal of the cap is to ensure coins are fairly distributed. The Federal Reserve previously enforced coin caps in June 2020.
The U.S. Mint, which is in charge of manufacturing coins, has been operating at full production capacity since mid-June of 2020, according to the Federal Reserve. The Mint produced 14.8 billion coins in 2020, a 24% increase from 2019, the Federal Reserve said.
In a video posted on June 29, 2021, U.S. Mint director David Ryder said there’s a coin circulation problem, not a coin shortage problem. He attributed circulation issues, in part, to a decrease in cash transactions.
The U.S. Coin Task Force, in its May 2021 statement, said there is about $48.5 billion in coins in circulation, “much of which is sitting dormant inside America’s 128 million households.”
Coinstar, which has operated coin-cashing kiosks for decades in the U.S., also says many people are leaving their change at home.
“The Mint has produced over $40 billion in coins since 1960, and therefore, there is sufficient coin in circulation. However, Coinstar estimates approximately $18 billion in coins are idle, likely in people’s homes,” the company said in a statement to VERIFY.
The U.S. Coin Task Force encourages people to use their coins, whether that’s by spending them at stores, depositing them at a bank or redeeming them at a coin kiosk.
“If just a fraction of the coin sitting dormant in households and businesses is redeemed and reused, this problem can be greatly reduced,” the task force said.