The coronavirus is causing a cash and coin shortage in the United States.
Banks, laundromats, grocery stores, and retail stores across the country are telling customers that, if they’re paying in cash, they need to bring exact change. All over, ATMs are empty. Last week, a small paper sign taped to the door of a Philadelphia Rite Aid warned customers they needed exact change if they paid in cash. “Dear Customer: Due to a Nationwide shortage of coins and small bills, we would appreciate exact change if possible. We will exchange your change for larger denomination bills,” the sign read.
A worker at the store told Motherboard in a phone call that the store has recently had trouble getting its coin orders filled by the local bank. Usually, the store orders about $800 in coins, but two weeks ago the bank couldn’t fill the order and last week it could only give Rite Aid half. For now, the worker said the store has enough coins and small bills and customers don’t seem to be too concerned.
“I hope it don’t last,” they said. “At first, with everything else going on, a lot of people did stop using cash and were more with credit and debit. So in a way that helped us.”
On the surface, a cash shortage during a pandemic seems counter-intuitive. People are staying home more and spending less. Just because the money isn’t moving around doesn’t mean there should be less of it. The truth is more complicated, and the federal government is doing its best to say it's on top of the crisis, while local businesses and national chains alike are telling customers to prepare for the worst. Broadly speaking, hard currency, and coins in particular, are a vector for disease and coins offer bacteria and viruses a smoother ride than cash. Scientists have speculated that the virus that causes COVID-19 can exist on cash, but scientists aren’t sure how dangerous it is. Epidemiologists recommend washing your hands after handling cash or coins just to be safe. In China, banks sterilize and sometimes destroy currency to control the spread of disease.
According to the U.S. Federal Reserve Chair Jerome Powell, cash is in short supply precisely because it isn’t moving around.
“What's happened is that with the partial closure of the economy, the flow of coins through the economy has...kind of stopped,” Powell said in testimony before the House Financial Services Committee on June 17. “The places where you go to give your coins and get credit, cash...those have not been working. Stores have been closed. So the whole system of flow has kind of come to a stop. We're well aware of this,” Powell said.
The Federal Reserve also doesn’t know how long it will take things to go back to normal. “I’m afraid we can’t yet determine [how] long it will take for coin inventories to return to more normal levels,” a spokesperson for the Federal Reserve told Motherboard in an email.
The Federal Reserve told banks and businesses across the country to prepare for a coin shortage that may last several months.
“We are actively managing our coin inventory and working with customers to meet their coin needs to the extent possible after the Federal Reserve put limitations on coin deliveries to all financial institutions nationwide,” a Wells Fargo spokesperson told Motherboard in an email.
“The Federal Reserve has reported that retailers should expect a shortage of coins in the supply chain for the next several months," a spokesperson for Publix—a grocery store in the Southeastern U.S.—told Florida’s The Ledger. 7-11 told The Ledger it received a similar message from the Federal Reserve.
In a June 11 press release, the Federal Reserve acknowledged the Covid-19 pandemic has disrupted the supply chain and normal circulation patterns of coins in the United States.
“In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees,” said the press release. In a June 30 press release, it announced it had formed a task force to address the issue and will work with partners such as the American Bankers Association and the United States Mint.
The U.S. Mint said it had taken steps to safeguard the health and safety of its workers during the pandemic and that those precautions had affected the production of coinage.
“Due to COVID-19, our production was down 10 percent in April and 20 percent in May,” the Mint told Motherboard in an email.
According to the Mint, employees worked both mandatory and voluntary overtime in May and June to increase coin production.
“We produced almost 1.6 billion coins in June,” it said. “We have increased production while still prioritizing the health and well-being of our employees and maintaining a reduced risk of their exposure to COVID-19 in the workplace.”
Jim Gaherity is the CEO of Coinstar, a network of self-service coin counting kiosks. In an email to Motherboard Gaherity said as lockdowns have ended, the volumes of coin transactions made through Coinstar kiosks have grown, which will help coins get back in circulation.
“We expect to see consumers resume their former level of coin usage and recycling at banks, Coinstar kiosks and daily cash transactions at retail point of sale that's been partially deferred since mid-March,” Gaherity said.
David Weil, a Professor of Economics at Brown University and the Director of the James M. and Cathleen D. Stone Wealth and Income Inequality Project, said he isn’t worried about the coin shortage. “I think that, like the [toilet paper] shortage, it’s a minor part of the COVID story and will not have any broad implications,” he told Motherboard in an email.
Despite assurances from Washington and experts, the effects of the shortage have been felt across the country. A gas and water company in Westville, Illinois has asked customers to make cash payments in the exact amount. The owner of a laundromat in Ventura, California, said customers have been raiding the change machines and walking out with $20 in coins. And people on Reddit are trading tips on how to get enough quarters to go to the laundromat.