By now, you’ve heard or seen this headline in the news: “America’s National Coin Shortage.” While a non-issue for some, the coin shortage represents a major problem for retailers who rely on coins as a primary method of giving change, particularly in low price tag markets like vending. As your payment partner, we make sure to regularly stay in tune with government offices to make sure we have all the facts when it comes to bringing you the information and solutions to help your business.
Below I discuss the origin of the shortage, what it means for vending operators going forward, and how you can alleviate the strain on your coin stock.
Why is there a shortage?
Contrary to the name, the shortage is not resultant of low production levels, but, instead, due to distribution which has been hindered by lower retail activity. There are more than enough coins available, actually more than ever before, according to officials at the US Mint, but because people just aren’t out shopping and spending money in retail locations as they were pre-pandemic, coins aren’t circulating, and therefore shortages are popping up across the country.
What can I do to combat the pressure on my coin levels?
While the US Mint is working 24/7 to produce additional coins for distribution, until consumers start spending and widely circulating those coins, shortages will continue. We can expect that the pandemic and the return to a normal spending economy will play a direct role in return to normal coin levels; but, in the meantime, there are ways to cope.
- Incentivize coin use. Knowing that the goal is to get the coins out of your customer’s pocket, use the tools you have (digital media screens, door decals, etc.) to alert your customers. Ask them to pay with their spare change, and exact change when able.
- Look for other ways to give change. While vending has its origins in a coin-based business, change doesn’t necessarily equal coins anymore. With banknote recycling technology (Think the same thing in the self-checkout that gives you change in notes) you can store banknotes and give change in both notes and coins to alleviate the pressure on your coin stock. For example, a $1.75 drink purchase where the consumer inserts a $5 note can be paid back with (3) $1 notes and a single quarter. The best part? Research suggests adding a note recycler to your vending machine can lift sales by nearly 15%.
Does a coin shortage put us one step closer to a cashless society?
Unlikely. As aforementioned, the coin shortage is a distribution problem, not a production one. The US Mint sees no reason to stop producing or circulating coins anytime soon, and its for this reason you should remain cognizant of the importance of accepting cash—both coins and banknotes. On top of this, its important to remember that cash is still the preferred payment method for purchases under $5—right in the vending sweet spot.