What will it mean to our everyday lives when there are no more pennies in circulation? Let’s say that you stop at a restaurant for lunch, and your bill, with tax, comes to $23.76. I suppose that, if you put it on a credit card, you could let the credit-card company or the bank worry about the amount. But what if you had to pay cash, without any pennies.
You could leave tip of $4.04, making the total $28.80. So you hand the cashier a twenty, a five, three ones, three quarters, and a nickel. Of course, that requires doing some math, and most Americans haven’t had to do that in quite some time. Besides, who carries actual money anymore? No. The credit card is the way to go. But many people don’t qualify for credit cards. And some people just don’t want them. Well, Congress has come up with a solution.
Rounding rules
In Time magazine, Chad Guzman writes, “Since the final batch of American pennies for circulation was minted in November last year, consumers and businesses across the country have resorted to various ways of managing transactions penniless. A bi-partisan proposal, however, offers to standardize the process in support of the smallest-value coin’s phaseout.”
According to The Flyover, “The House passed what it called the ‘Common Cents Act’ by voice vote, setting national rules for rounding cash transactions to the nearest nickel and legally ending penny production in the U.S.” The legislation (H.R. 3074), introduced by Rep. Lisa McClain (R-Michigan) and Rep. Robert Garcia (D-California) was passed on July 14, 2026, and it provides a federal framework to be used by businesses in rounding amounts to the nearest nickel.
According to GOVTRACK.US, the bill now goes to the Senate for consideration. In order to become law, the bill must pass the Senate in identical form and then be signed by the President. In the Time article, de Guzman writes, “Under the bill, the penny would remain legal tender and would keep its one-cent value, but the bill outlines how persons and businesses may — but are not required to — round cash transactions if exact change cannot be provided.”
Here’s the formula: If the amount has a 1, 2, 6, or 7 as the last digit, it can be rounded down to the nearest nickel. If the amount ends with a 3, 4, 8, or 9 as the last digit, it can be rounded up. But, for very small transactions of $0.01 or $0.02, the amount may be rounded up to $0.05. For people in 2026, that last bit of information is probably meaningless. But when I was a kid, neighborhood candy stores still sold penny candy, like Mike and Ike (jelly beans) and other specialty treats for young kids. Those days have been over for a long time, and when my generation dies out, so will the memory of penny candy.
People who have some sort of emotional attachment to the penny ought not fear. The Treasury Department assures us that the Federal Reserve will continue to circulate the 114 billion pennies that are still in circulation for as long as possible. When money “wears out,” the Fed removes it from circulation. However, I was unable to find out approximately how long it takes for a penny to wear out.
Opposing opinion
What would federal legislation be if there were no opposition? I suppose unemployed professional lobbyists would simply create an opposing opinion, just to keep in practice. But, as it turns out, the National Restaurant Association (NRA) has asserted that many restaurateurs are simply rounding all amounts DOWN in order to avoid the possibility of litigation. According to de Guzman, the NRA estimates that a prolonged period of always rounding down could cost restaurants up to $168 million annually.
On the other hand, the Federal Reserve Bank of Richmond “projected in a July brief that rounding to the nearest nickel could cost U.S. consumers about $6 million annually,” according to the Time article. Obviously, it’s almost never the case that everyone is satisfied by any decision. Quoting Evan Armstrong, senior vice president of government affairs of the Retail Industry Leaders Association, de Guzman writes, “The House recognized the need for certainty to protect cash transactions, support consistency across the country, and resolve an issue that has been negatively impacting millions of businesses nationwide.”
Nickel for your thoughts
Incidentally, H.R. 3074 contains wording that also authorizes the Treasury Department “to test a redesigned, lower-cost nickel made with zinc instead of the current copper-heavy alloy,” according to The Flyover. According to The Hill, an expert in monetary matters argues “it would have been easier for the U.S. to ditch its nickel than the penny.” While the cost of making a penny was about 3.7 cents, it takes 13.51 cents to produce a nickel. And, of course, with the penny eliminated, that increases the demand for the nickel, a coin that costs much more to manufacture.
In another Time article, it is opined that without pennies there would likely also be changes in pricing strategies, as well as a need for an adjustment period during which retailers, banks, and consumers adapt to the new system. But fear not. Other countries have eliminated coins and are still around to tell about it. In 1990, New Zealand got rid of the one-cent and two-cent coins. Sixteen years later, the country eliminated the five-cent coin as well. Australia took the same action with one- and two-cent coins in 1992 and reducing the five-cent coin in 2016. Finland, which is on the Euro system with most of the rest of the E.U., stopped issuing one-cent and two-cent coins in 2002 and reduced the use of five-cent coins in 2015.
The Bullion Exchanges website informs, “As discussions surrounding the penny’s elimination continue, the nickel is now coming under greater scrutiny.” Although the nickel’s expense is obvious, the website assures us, “While the U.S. government has not officially announced any plans to phase out the nickel, history suggests that small-value coins tend to be removed one step at a time.” Like most other aspects of existence, currency is evolving.
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Jim Glynn is Professor Emeritus of Sociology. He may be contacted at j_glynn@att.net.