Banks and other businesses still dealing with coin shortage issue

Hear BFLO Store owner and Lake Shore Savings President/CEO weigh in on coin shortage
A sign warning customers about the coin shortage
A sign warning customers about the coin shortage. Photo credit WBEN

BUFFALO, N.Y. (WBEN) – You may have noticed signs about a coin shortage posted on the front doors of grocery, convenience, and retail stores over the last several weeks and months.

The signs all have the same theme: There’s a coin shortage and these companies are stressing you provide exact change if you are using cash as a payment.

According to the U.S. Coin Task Force, there are $48.5 billion in coin already in circulation, though much of it is dormant inside the country’s 128 million households.

While the issue does not have a major impact on the operation of businesses, it’s a nuisance.

“It wasn’t until about fairly recently – about six months ago- we’d go to the bank and ask for coins and they’d say ‘You can’t have the 20 rolls of quarters you want but we can give you 5’,” Nate Mroz, owner and founder of BFLO Store, said. “We would have to go to a different bank or possibly wait until next week.”

Mroz said they’ve been able to avoid the issue in their stores because the majority of customers buy their product using credit cards or pay using other non-cash methods. Still, they’re losing out on some business due to the small percentage taken by credit card companies on each transaction.

Some businesses have had to modify their business model, though. Kroger, a popular grocery chain, last year rounded transactions up to the nearest dollar and donated the money to a local food bank.

While Mroz told us about the difficulty getting coins from local banks, the actual issue lies further up the chain.

“When you look at the shortage that’s out there right now, we’re looking at the federal reserve,” Daniel Reininga, President and CEO of Lake Shore Savings Bank, which has 11 branches throughout the region, said. “Part of their concern over supplying coins is their ability to mint the coins. If you look at nickels for example, the raw materials are hard to get right now. There’s a supply shortage in nickels. The other coins they’re rationing them out. The pennies, dimes, and quarters seem to be in a reasonably good supply.”

The Federal Reserve writes there is an adequate overall amount of coins in the economy but pinned the shortage on the disrupted circulation caused by the COVID-19 pandemic. A temporary cap on coins for banks was imposed in June 2020 to ensure supply was fairly distributed. The cap was later removed and reinstated this May.

“As the economy recovers and businesses reopen, more coins will flow back into retail and banking channels and eventually into the Federal Reserve, which should allow for the further rebuilding of coin inventories available for recirculation.”

But how long will that be? No one knows for sure.

Featured Image Photo Credit: WBEN