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First toilet paper and sanitizer, now coins are the latest nationwide shortage

The coin shortage is the latest cost of the coronavirus pandemic

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SALT LAKE CITY — Throughout the first weeks of the coronavirus pandemic Utahns hit stores in droves to buy toilet paper and hand sanitizer, emptying shelves and depleting storages.

Now, as the weeks have rolled into months, there’s a new nationwide shortage — coins.

“The Federal Reserve is experiencing a significant coin shortage across the U.S., resulting from fewer coins being exchanged and spent during the COVID-19 pandemic. Like many retailers and businesses, we are adjusting to the temporary shortage in several ways,” said Aubriana Martindale, a spokesperson for Smith’s grocery stores.

And the coin deficit isn’t expected to change anytime soon.

Martindale said company leadership has been “guided to believe the coin shortage could continue through November.”

The national coin shortage has swept across a variety of businesses sectors — an issue that stems from the pandemic’s disruption of the supply chain and circulation of American coins.

During normal times, businesses like Smith’s request their coin supplies from banks, which in turn request theirs from the Federal Reserve Bank. This process was complicated in June when the Federal Reserve Bank announced that going forward there would be temporary limits on what banks could request in quarters, dimes, nickels and pennies, according to the Dallas Morning News.

The Federal Reserve’s statement pointed to coronavirus’ impact on “normal circulation patterns for U.S. coins,” saying the pandemic has “significantly disrupted the supply chain.”

The cause is twofold. First, coronavirus interrupted the general transfer of coins from business to business as customers leaned on credit and other transactions that minimize human contact. Second, the number of coins being produced nationally fell dramatically.

Howard Headlee, president of Utah Bankers Association, said Utah banks are simply unable to “provide the amount of coin that is being requested” by businesses and customers.

“We are limited to what we can get, and we therefore have to limit what we can give,” he said. “We are encouraging folks if they’ve been saving their pennies and they have the classic penny jar at home, this would be a good time to cash that in and put that to work in the local economy.”

Production of coins fell about 35% at the U.S. Mint between the months of January and April after the number of employees per shift was reduced to allow for social distancing.

Though the bureau has made some strides toward returning to normalcy, such as working overtime Saturdays and Sundays in order to ramp production back up throughout May, producing 901 million coins throughout the month — a 13% increase from the April low. For the rest of 2020, it intends to produce more than 1.35 billion coins each month, the Dallas Morning News reported.

Headlee said production of coins is indeed back and above normal, but there’s a lot of catching up to be done.

The biggest issue, Headlee said, is the change in consumer behavior, which is why customers are being encouraged to help by getting their coins back into circulation.

“You take into account customers not moving coin from business to business, the feds not producing coins, that’s what really shut down the coins in our area,” said Roger Christensen, senior vice president over marketing, communications and business development at Bank of Utah.

Christensen said Bank of Utah has encouraged impacted businesses to put signs on their doors informing customers about the issue. The bank also sent an email a few weeks back asking customers to bring in their extra coins in exchange for a free piggy bank, which has really helped, he said.

“We’ve got all of these little kids that have been sending all this money from their lemonade stands and stuff and it’s just been hilarious. They’ve been bringing it in and telling their friends about it and their friends have been coming in,” Christensen said. “It’s been a lot of fun.”

Meanwhile, Utah businesses are adapting to the limitations.

At Smith’s, Martindale said customers can switch their payment type to a debit or credit card instead of using cash, and through “upgraded technology,” stores have the capacity to load coin change to their loyalty card for use during the next shopping trip, provide coin change at a lane with coins available, or round the order up to support charity efforts.

Utah’s liquor stores have also been impacted by the coin shortage, according to Terry Wood, director of communication for the Department of Alcoholic Beverage Control.

He said all of the state liquor stores plan to post a sign on each cash register asking customers to “pay with exact change, debit, or credit” if they can due to the coin shortage.

Not all businesses report being impacted.

Stephanie Miller, a representative for Harmons, said the company’s stores see a small amount of cash transactions, so the coin shortage hasn’t been an issue.