The American penny passed away today after a prolonged illness. It was 238 years old.
The last penny was minted Wednesday afternoon at the US Mint in Philadelphia, overseen by US Treasurer Brandon Beach. President Donald Trump announced via social media in February that he instructed the Mint to stop making the once-popular coin, citing the cost of production.
The penny costs nearly four cents to mint, more than the coin’s worth. Once valuable enough to buy “penny candy” like gumballs and feed parking meters or toll booths, today the penny lives mostly in coin jars, junk drawers or “leave a penny/take a penny” trays.
Beach said Wednesday that the final coins pressed will be auctioned off and that the actual last pennies put into circulation from the US Mint were struck in June.
The penny outlived its sibling, the half-penny, by 168 years. It’s survived by the nickel, dime, quarter, and rarely seen half-dollar and dollar coins.
Despite its demise, the penny will remain legal tender.
Problems despite long planned end
For a coin that seems obsolete, its removal from circulation is causing more problems than expected, especially for retailers.
Some merchants plan to round prices to the nearest nickel, often a penny or two more. Others are asking customers to pay with pennies to help supply. But in some states, merchants could face legal trouble for rounding up or down.
Additionally, any savings from discontinuing the one-cent coin could be offset by the need to press more nickels, which costs the US Mint more money than the penny.
The government’s phasing out of the penny has been “a bit chaotic,” said Mark Weller, executive director of Americans for Common Cents. The pro-penny group is funded primarily by Artazn, the company that provides the blanks used to make pennies. “By the time we reach Christmas, the problems will be more pronounced with retailers not having pennies.”
Weller said other countries that removed low denomination coins, like Canada, Australia and Switzerland, had guidance for afterwards. Not so in the United States.
“We had a social media post (by Trump) during Super Bowl Sunday, but no real plan for what retailers would have to do,” he said, referring to the president’s February announcement.
Different rounding plans
Kwik Trip, a family-owned convenience store chain that operates in the Midwest, decided to round down cash purchases in stores where it hasn’t been able to find pennies.
“There’s no way that we wanted to charge (customers) an extra 2 cents because we just didn’t think that was fair,” said John McHugh, spokesperson for the company. “I mean, it’s not their fault that there there’s a penny shortage.”
But with 20 million customers a year, and 17% of them paying with cash, the policy will eventually cost Kwik Trip a couple of million dollars a year, McHugh said.
It’s not just businesses that face increased costs. Rounding to the closest nickel will cost consumers about $6 million a year, according to a July study by the Federal Reserve Bank of Richmond. That is fairly modest, coming to about five cents each across 133 million American households.
And rounding is not a national solution.
Four states – Delaware, Connecticut, Michigan and Oregon – as well as numerous cities, including New York, Philadelphia, Miami and Washington, DC, require merchants to provide exact change, according to the National Association of Convenience Stores (NACS).
In addition, the law covering the federal food assistance program known as SNAP requires that recipients not be charged more than other customers. Since SNAP recipients use a debit card that’s charged the precise amount, if merchants round down prices for cash purchases, they could be opening themselves to legal problems and fines, said Jeff Lenard, spokesperson for NACS.
“Rounding down on all transactions presents several challenges beyond the loss of an average of 2 cents per transaction,” Lenard said. “We desperately need legislation that allows rounding so retailers can make change for these customers.”
For that reason, NACS and other retail groups recently wrote to Congress asking for legislation to deal with the questions raised by the end of penny production.
End of a ‘wonderful life’
The penny was one of the nation’s first coins, first minted in 1787, six years before the Mint itself was established.
Benjamin Franklin is widely credited with designing the first penny known as the Fugio cent. Its current form arrived in 1909 on the centennial of Abraham Lincoln’s birth, when it became the first American coin to feature a president.
But it has declined in both use and popularity ever since. The Treasury Department now says there are an estimated 300 billion pennies in circulation. That comes to a bit less than $9 for every American. But most of those coins are “severely underutilized.” So, outcry from the public over its demise has been muted.
Joe Ditler, a 74-year old writer and historian from Colorado, said he still has an old cigar box filled with mostly pennies given to him by his grandfather. He remembers flattening pennies on railroad tracks or souvenir machines in amusement parks.
However, he only occasionally uses pennies to make a cash purchase. And he often tosses the one-cent coin in the tip jar.
“They bring back memories that have stayed with me all my life,” he said. “The penny has had a wonderful life. But it’s probably time for it to go away.”
-CNN’s Danny Freeman contributed to this report
