Penny Minting and Cash Rounding

Summary#

The bill would stop the U.S. Treasury from minting new one-cent coins (pennies) and require cash payments to be rounded to the nearest five cents. The penny would remain legal tender, and the Mint may still produce pennies only to sell to coin collectors, if those sales cover production costs. The rounding rule would apply only to cash transactions and starts one year after the law takes effect.

• Main change: The Mint must cease regular production of pennies within one year of enactment.
• Main change: Cash totals would be rounded to the nearest 5 cents when the payer is using cash.
• Rounding details: Totals ending in 1, 2, 6, or 7 cents are rounded down; totals ending in 3, 4, 8, or 9 cents are rounded up. Transactions of $0.01 or $0.02 would be rounded up to $0.05.
• Exceptions: Rounding does not apply to non-cash payments (cards, checks, electronic transfers, gift cards, etc.).
• Collectors: The Mint may still produce pennies for collectors but must sell them at a price that at least covers production costs.
• Timing: Rounding takes effect one year after enactment; the Mint must stop ordinary penny minting within one year.

What it means for you#

• Cash consumers (people who pay with physical money):

  • Small cash payments could be rounded up or down to the nearest 5 cents at the time you pay.
  • Your receipt could show the exact price but the cash you hand over or receive as change would reflect the rounded total.

• People who pay by card, check, or electronically:

  • No change. Exact cents still apply for non-cash payments.

• Businesses that accept cash (stores, restaurants, service providers):

  • Must round cash transaction totals according to the bill’s rules.
  • Need to update cash-handling procedures and train staff on rounding.
  • Price labels and accounting records can still show exact cents, but the cash settled will be rounded.

• Employers who pay wages in cash:

  • Cash wage payments must follow the same rounding rules. Employers paying wages by check or electronically are not affected.

• The U.S. Mint / Treasury:

  • Will stop routine production of pennies and may produce collector pennies sold at prices covering production costs.

• Coin collectors:

  • Pennies could still be produced for collectors, but only under the sales/price conditions in the bill.

Expenses#

No publicly available information.

• The bill requires that any pennies produced for collectors be sold at prices that at least cover production costs, so those specific sales are not intended to create a net loss.
• This could reduce Mint production costs because routine penny minting would stop, but the bill does not provide any estimate of savings.
• Businesses may face small costs to update cash-handling procedures, training, and point-of-sale systems.
• There could be costs for public education to explain rounding rules. The bill does not provide estimates of these costs or of any change in government revenue.

Proponents' View#

• The bill appears intended to eliminate the routine production of a low-value coin and simplify cash handling.
• Supporters may argue that stopping penny minting would save the government money by ending production of a coin that costs more to make than its face value.
• The rounding rule could reduce the time workers spend handling pennies and speed up cash transactions.
• Allowing collector pennies only if sold at or above cost could avoid ongoing losses from collector sales.

Opponents' View#

• One concern is that rounding could shift small amounts from consumers to sellers over many transactions, and the net effect is not specified in the bill.
• The bill does not provide estimates of savings or costs, so it is unclear whether ending penny production will produce significant net government savings after other costs.
• It is unclear how enforcement or oversight of the rounding rule would work, and whether merchants must disclose rounding to customers.
• Businesses that rely heavily on cash may face administrative and system-change costs.
• The effect on low-income people who use cash most often is not detailed; this group could be more affected by rounding patterns.