The American penny isn’t going anywhere anytime soon. The US Treasury Department announced Thursday that it plans to start winding down production of the one-cent coin it has been minting for more than 230 years. But the penny will still remain legal tender, and will still be in use at thousands of retailers around the country for sometime to come. “If we look at the experience in Canada, for the first year after they stopped making pennies, there’s really no change in transactions,” Jeff Lenard, spokesperson for the National Association of Convenience Stores, told CNN. Convenience stores do more cash transactions than any other group, about 32 million a day, or about 20% of the total number of purchases by their customers, Lenard said. The National Retail Federation, which represents most major US store chains as well as thousands of small retailers, also said it anticipates its members will use pennies even after production stops at some point early next year, although it does anticipate that many will round cash transactions to the nearest nickel once the supply of pennies at banks starts to run short. “Retailers’ primary goal is serving customers and making this transition as seamless as possible,” said Dylan Jeon, senior director of government relations for NRF. There are an estimated 114 billion pennies currently in circulation, but they are “severely underutilized” according to the Treasury department. Many are at home in coin jars or junk drawers, or some other forgotten location gathering dust. The math says that all those pennies could fill a cube roughly 13 stories high. Many people don’t even take them as change, tossing them into the leave-a-penny-take-a-penny dishes at store checkouts. Lenard said the large number of pennies in circulation means that retailers won’t necessary run out of them for a while. But eventually stores won’t be able to get new rolls of pennies from their banks and will start rounding transactions up or down to the nearest nickel. The decision when to do that will rest with each retailer, not official government policy. Electronic transactions such as credit and debit card purchases, will continue to be down to the penny, Lenard said, with only cash transactions being rounded. Even in countries like Canada, where penny production has been discontinued, the penny remains legal tender today. Canada’s finance ministry said pennies retain their value for transactions “indefinitely” despite the fact that it stopped making the coin in 2012. If a customer wants to use pennies to complete a transaction, most retailers are likely to allow them, Lenard said. “There’s a saying in retail, ‘Never lose a customer over a penny,’” he said. “I never really thought of it in these terms, but it applies even more here. I think if someone wants to pay with pennies, most retailers will err on the side of making those customers happy.”
So what happens to America’s 114 billion pennies once the US stops making them?
TruthLens AI Suggested Headline:
"US Treasury Plans to Reduce Penny Production While Maintaining Legal Tender Status"
CNN
8.8
TruthLens AI Summary
The US Treasury Department has announced plans to gradually reduce the production of the penny, a one-cent coin that has been in circulation for over 230 years. Despite this decision, the penny will remain legal tender and continue to be used at numerous retailers across the country for the foreseeable future. Jeff Lenard, spokesperson for the National Association of Convenience Stores, highlighted that the experience in Canada, which ceased penny production in 2012, showed no immediate impact on transactions during the first year following the decision. Convenience stores, which handle around 32 million cash transactions daily, are expected to adapt to the changes of penny availability without significant disruption. The National Retail Federation has indicated that its members will likely continue to use pennies even after production ceases, although many retailers may start rounding cash transactions to the nearest nickel as supplies dwindle. This transition will be managed at the discretion of individual retailers, rather than through a formal government policy, ensuring that customer service remains a priority during this adjustment period.
Currently, there are approximately 114 billion pennies in circulation, many of which are not actively used and are often stored away in homes. This surplus means that retailers are unlikely to run out of pennies immediately, but they will eventually face challenges in acquiring new rolls from banks. As a result, cash transactions may begin to see rounding practices implemented. It is important to note that electronic transactions will still retain their precise amounts down to the penny. The experience of other countries, such as Canada, where the penny remains legal tender despite its discontinuation in production, suggests that retailers will likely accommodate customers wishing to pay with pennies. Lenard emphasizes the retail philosophy of prioritizing customer satisfaction, stating, "Never lose a customer over a penny," indicating that most stores will likely continue to accept pennies as payment, maintaining their value for transactions indefinitely.
TruthLens AI Analysis
The article provides insights into the future of the American penny following the US Treasury Department's announcement to scale back its production. This decision raises questions about the implications for consumers, retailers, and the economy at large.
Intended Purpose of the Article
The publication aims to inform the public about the cessation of penny production while reassuring them that the coin will remain in circulation for the foreseeable future. By referencing expert opinions and statistics, the article seeks to alleviate concerns about the potential disruption to transactions and consumer behavior.
Public Perception and Implications
The article seems to promote a sense of stability by emphasizing that transactions will continue as normal despite the reduced minting of pennies. This is intended to foster confidence among consumers and retailers, suggesting a smooth transition rather than a significant economic shift. The use of comparisons to Canada's experience after discontinuing pennies also serves to normalize the change and mitigate fears of chaos in cash transactions.
Possible Omissions or Hidden Agendas
While the article presents a fairly straightforward narrative, it may underplay the broader implications of moving away from cash-based transactions altogether. The mention of rounding transactions could suggest a gradual shift towards digital currencies or cashless systems, which might be a more significant trend not fully explored in the discussion.
Manipulative Potential
This article has a low level of manipulative elements. It doesn't seem to target a specific group for blame or create unnecessary fear; instead, it provides information and expert insights. However, the language could be seen as subtly promoting the idea that the phasing out of pennies is a positive step, which could skew public perception towards accepting this change without questioning the larger implications.
Truthfulness and Reliability
The information presented appears to be factual and well-supported by data and expert commentary. The article discusses the current state of pennies in circulation, the reasons for the production cut, and potential consumer behavior, all of which are verifiable.
Connections to Other News
In a broader context, this article may relate to ongoing discussions about the future of cash and currency in an increasingly digital economy. It can be linked to financial news focusing on the rise of cashless transactions and the implications for retail and consumer habits.
Societal and Economic Impact
The decision to stop producing pennies could have psychological effects on consumers who are accustomed to cash transactions. It may encourage further acceptance of rounding practices and potentially push retailers to adapt to cashless payment systems faster. Economic behavior could shift as consumers become more accustomed to digital transactions, which could influence sectors reliant on cash.
Target Audience
This article likely resonates more with audiences concerned about economic stability, such as small business owners and consumers who prefer cash transactions. Its informative nature could attract readers interested in financial news and the implications of currency changes.
Market Impact
While this news may not have immediate stock market implications, it could influence retail stocks in the long run, especially for companies heavily reliant on cash transactions. As consumer behavior shifts, companies may need to adapt their payment systems, affecting operational costs and profitability.
Geopolitical Relevance
There is no direct geopolitical significance to this article, although the discussion about currency reflects broader economic trends that could influence international markets. The trends towards digital and cashless economies are relevant in the context of global financial discussions.
Artificial Intelligence Use
It’s possible that AI was used in drafting the article, particularly in structuring the information and ensuring clarity. AI models could have assisted in data analysis and summarization without altering the core message. However, this does not appear to overly influence the narrative, as the language remains straightforward and objective.
In conclusion, the article is a reliable source of information regarding the future of the penny and its implications for the American economy. It addresses potential concerns while promoting a sense of continuity in retail practices.