The End of the Penny: What Businesses Need to Know and Do Now

The U.S. Treasury has officially ceased production of the penny, and the effects are already being felt across the country—especially in the Midwest. While the final minting of pennies occurred in August 2025, the Federal Reserve has begun phasing out distribution through its regional cash services, including locations under the Kansas City Fed. This means businesses in the MidWestOne footprint may experience shortages sooner than expected¹.

What's Happening?

In February 2025, President Trump ordered the U.S. Mint to stop producing pennies due to their high production cost—3.69 cents per coin. The Treasury followed through by placing its final order for penny blanks in May, and the last coins were minted by August². Although pennies remain legal tender, the Federal Reserve is no longer fulfilling orders for them at many distribution points, including some in the Midwest³.

Why Businesses Should Act Now

The transition is happening faster than anticipated. Some banks and retailers are already unable to obtain penny rolls, and cash endpoints connected to depleted Fed distribution centers are being turned off without much advance notice⁴. This unpredictability makes it critical for businesses to prepare immediately.

Recommended Actions:

• Audit your coin inventory and assess how long your current penny supply will last.
• Update POS systems to accommodate rounding for cash transactions.
• Train staff on new rounding policies and customer communication.
• Post signage to inform customers about the change and encourage electronic payments.

How to Handle Transactions Without Pennies

Once pennies are no longer available, businesses will need to round cash transactions to the nearest nickel. The most widely accepted rounding method is:

• Round down if the total ends in 1, 2, 6, or 7 cents.
• Round up if the total ends in 3, 4, 8, or 9 cents.
• No rounding is needed for totals ending in 0 or 5⁵.

Important: This rounding applies only to cash transactions. Digital payments (credit/debit cards, mobile apps) will still be processed to the exact cent.

When to Make the Adjustment

Businesses should not wait until pennies are completely unavailable. Given the uneven and unpredictable depletion of penny inventories, it’s best to implement rounding policies as soon as local supply becomes unreliable. In some areas, this is already the case.

Communication Strategies

Clear and proactive communication is essential to maintain customer trust. Businesses should:

• Display notices at registers and self-checkouts explaining the change.
• Update websites and receipts with rounding policy information.
• Empower employees to explain the rationale and reassure customers.
• Coordinate with local banks to stay informed about coin availability.

Final Thoughts

The end of the penny marks a significant shift in U.S. currency policy, but with thoughtful preparation, businesses can navigate the transition smoothly. Acting early—especially in regions already seeing shortages—will help avoid operational disruptions and customer confusion.