Latest Shortage? Coins – Some Banks Paying a Premium to Get Them
2020 just keeps on harshing. Due to the COVID-19 pandemic, America now faces a shortage of coins. U.S. coins: pennies, nickel, dimes and quarters (those are the ones really affected - when's the last time you got a half-dollar in change?) U.S. Federal Reserve Bank spokespeople say it's only temporary, but there are reports that the shortage may cause some banks (and - I assume businesses) to round up or down when making change.
According to FoxBusiness, Federal Reserve Chairman Powell last week addressed the shortage, saying:
What’s happened is that with the partial closure of the economy, the flow of coins through the economy has gotten all, it's kind of stopped," Powell said. "At places where you go to give your coins and get credit at the store, get cash, folding money, those have not been working. Stores are closed. The whole system of flow has kind of come to a stop. We’re well aware of this.
The problem is system-wide. First, the U.S. Mint was producing fewer coins as they, like many other "factories", had to limit production to protect their employees. Then, banks and businesses were closed to the public, meaning fewer coins were coming in from the public. Plus, many places with coin-return kiosks (some of them banks - some of them retail outlets with Coin-Star machines) were shut down.
It appears the hardest hit are rural areas. Many banks are now receiving only a fraction of the coins they used to get every week from the Federal Reserve. One bank in Fort Smith, Arkansas even held a "coin drive" last week - offering 2% over face value to beef up their coin supply.
To say I'm disappointed is an understatement. This comes just as my tour of "Magic Fingers Bed" equipped motels was being planned. Bummer.
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