The End of the Penny: Here's What it Means for Your Business
Managing Cash Flow
Why is the Penny Going Away?
After 232 years in circulation, the U.S. Mint ended penny production on November 12, 2025. The end of the penny has implications that will affect how businesses operate. We're breaking down why the penny is going away, what it means for your businesses, and how TowneBank can support you through the transition. Here are the key reasons the U.S. Department of Treasury is discontinuing pennies:- Production cost: The penny costs the U.S. Mint $3.69 to produce despite its one cent value.
- Operational efficiency: Eliminating small-denomination coins can reduce cash handling time at registers and in banking operations.
- Payment trends: Growth in card and digital payments has reduced reliance on physical payments, making a penniless system more feasible.
How Can Businesses Prepare?
If your business accepts cash payments, there are proactive measures you can take to prepare for this transition away from pennies.Take inventory of your pennies.
Determine how many pennies you have and how long your supply might last. Keep in mind that penny rolls may become hard to get in the banking industry over time. TowneBank will continue to monitor the situation and alert our members to any important information that arises.Learn how to handle cash transactions without pennies.
Cash transactions will need to be rounded to the nearest nickel if and when you are out of pennies. If a customer's total cost ends in 1, 2, 6, or 7 cents, you'll need to round down. If the total cost ends in 3, 4, 8, or 9 cents, you'll need to round up. When the time comes, point-of-sale systems will need to be updated to reflect these cash rounding adjustments.Encourage digital payment methods when possible.
Using alternative payment methods such as debit and credit cards, digital wallets, and ACH eliminates the need for change and allows for totals that are precise down to the cent.Be transparent with customers and train your employees.
Keep your customers informed about any operational changes you may be implementing including rounding procedures. Empower your staff to tackle these procedures and customer questions with confidence.
Frequently Asked Questions
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Yes, pennies are still legal tender at this time.
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Expect operational impacts in time. Plan to adopt cash rounding rules, prepare to adjust point-of-sale systems, and consider encouraging your customers to make digital payments when possible.
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Discontinuing the penny is a cost-saving and efficiency-focused decision. Producing a penny costs more than its face value. Additionally, the rise in digital payment options has reduced the need for low-denomination coins.
How TowneBank Can Help
You don't have to navigate this change alone. TowneBank is here to help you understand what the end of the penny means for your business operations. Connect with your banker or nearest TowneBank office for assistance with planning and implementing a penny-free strategy.