The U.S. Penny Is Retiring: What It Means and The Future of Cash

The United States is making a historic change by officially retiring the penny, a coin that has been in circulation since 1793. The U.S. Mint plans to stop producing pennies once the current supply of blanks runs out, which is expected to happen by early 2026. The main reason? Cost: it takes 3.7 cents to produce a single penny, resulting in an $85 million loss in 2024 alone. Ending production could save the government around $56 million each year. 

However, some experts argue that the financial benefits might not be as straightforward. While minting pennies is expensive, producing and handling paper currency also carries a cost. For instance, it costs about 3.2 cents to print a $1 bill. If eliminating the penny increases the use of low-denomination bills, the savings could be reduced by more frequent printing and handling. 

For retailers, this change means cash transactions will be rounded to the nearest five cents, though digital payments will still allow for exact pricing. This could impact traditional $X.99 pricing strategies, which may lose their psychological impact when paid in cash. Businesses will also need to update their point-of-sale systems and train staff in the new rounding rules. 

Why Cash Still Matters 

While this might seem like a small adjustment, it’s part of a bigger conversation about the future of cash. Despite the rise in digital transactions, cash remains a vital payment method. In 2024, it accounted for 14% of all consumer payments, and 83% of Americans used cash at least once in the past month. It remains the third most common payment method, after credit and debit cards, and nearly 80% of people still carry cash regularly. 

Consumers have mixed reactions. Some see this as a smart and overdue move, while others feel nostalgic or worry about fairness, especially those who rely heavily on cash, such as older adults and lower-income individuals. Ensuring transparency and consistency in rounding practices will be crucial to maintaining trust. 

This ongoing reliance on cash highlights the need for businesses to stay flexible and efficient, ensuring both digital and cash payments are handled with accuracy and speed. At Cashmaster, we support retailers by making cash handling more accurate, secure, and efficient, reducing the time spent on manual counts and minimizing errors. 

Want to see how much you could save? Try our Savings Calculator to find out in under 2 minutes. 

A Shift Back Toward Cash Inclusivity  

Interestingly, some businesses that previously went cashless are now bringing back cash options. Uber has reintroduced cash payments in certain cities to better serve unbanked populations, and Starbucks continues to accept cash at all locations. Even major sports venues and festivals are bringing back cash options to ensure financial inclusivity. 

Eliminating cash altogether is still a long way off. Many individuals rely on it for budgeting, privacy, and accessibility. A full shift to digital payments would require infrastructure improvements, more robust financial inclusion efforts, and public education to build trust in digital tools. 

As the U.S. joins countries like Canada, Australia, and New Zealand in retiring low-denomination coins, the move signals more than just a monetary change; it’s a cultural and operational transition. For businesses, now is the moment to reassess how they manage pricing, communicate clearly with customers, and ensure cash handling processes are as efficient as possible. 

How Cashmaster Can Help 

At Cashmaster, we believe in empowering retailers to manage cash confidently, even in the digital-first world. As changes like penny retirement unfold, businesses that can adapt smoothly will gain a competitive edge, both in customer satisfaction and operational efficiency. 

Explore our cash handling solutions and discover how we can support your team.