Through the reopening of businesses, coins are beginning to circulate again following a decrease in coinage within the economy as a result of the COVID-19 pandemic.
The closure of businesses as a result of the pandemic had put the economy at a standstill, especially with coins.
According to loan officer Alex Nevitt, “Places like bank lobbies were closed, and… most people were hunkered down during the first several months of the pandemic, [so] consumers were not circulating back to the banks[and] businesses,” Nevitt said.
Almost all businesses were affected in some way by the shortage.
“Businesses closed things like cafeterias, which meant people weren’t sticking money in vending machines. Coin-operated laundries were [also] very slow,” enrolled agent and financial planner John Hickey said.
At one point, the shortage reached a point where the Federal Reserve deemed it necessary to set up a Coin Task Force to address the issue.
However, as businesses now start reopening for financial reasons, money, and specifically coins, have begun circulating again.
According to Nevitt, opening businesses have “started to circulate coins” back into banks, “who can then fill business coin orders.”
Opening businesses are not the only reason coins are becoming more readily available.
“The U.S. Mint halted production for the first couple of months in the pandemic, [but now] the mints in Denver and Philadelphia have ramped up production by 26%,” Nevitt said.
According to both Nevitt and Hickey, the term coin shortage was really a misnomer.
“The number of coins did not decrease,” Nevitt said.
Hickey agrees.
“[The coins] were just stuck in people’s homes,” Hickey said.
When the U.S. was in the brunt of the coin shortage months back, many businesses encouraged the use of exact change when paying, but now as the shortage loosens its grip, exact change isn’t as necessary as it once was.
“The shortage has eased, so you shouldn’t have any trouble using larger bills,” Nevitt said.
According to Modern Male barber Miles Schwartz, most people pay with cash and cards. When Modern Male Barbershop gives back change, it is rounded up so they do not have many dealings with coins.
According to pet sitter Claudia Shmidheiser, there was definitely a lack of coins during mid-2020, but they’ve started coming back into use now.
Shmidheiser said that she mostly deals in exact dollar amounts, so coins were rare for her anyway, but were especially unavailable a few months back.
Despite this, coins are not going anywhere anytime soon.
According to Hickey, “There is still a large portion of the population who are ‘unbanked,’” which means that they only use cash, no cards or apps.
“If pennies and nickels were removed as coinage, the price of consumer goods would be rounded up. [This] would put a major financial strain on the poor,” Nevitt said.
Despite the world’s growing use of digital money, coins still find themselves important to many people.
“One of the many things this pandemic has taught us is that even in this digital age, tangible things like coins are still an essential part of our economy and…daily lives,” Nevitt said.