Preparing Your Business for the End of the Penny

Why the U.S. penny is going away and what it means for you

For more than two centuries, the U.S. penny has quietly done its job: sitting in cash drawers, jingling in pockets, and collecting in jars on kitchen counters. But that era is coming to an end.

In November 2025, the U.S. Mint officially ended production of the one-cent coin. While pennies remain legal tender and will continue to circulate for years, no new pennies will be created. This shift may feel symbolic, but it carries real operational implications for businesses, consumers, and banks alike.

Here’s what’s happening, why it’s happening, and what businesses should be thinking about as the penny gradually fades from everyday use.

What’s happening to the U.S. penny?

After 232 years in circulation, the penny is no longer being minted. Existing pennies will remain valid currency, but supplies will steadily shrink as coins are lost, saved, or removed from circulation.

At the same time, the Federal Reserve has begun limiting penny distribution, and many retailers are already experiencing penny shortages. As a result, cash rounding is increasingly common, even before any formal nationwide standard has been implemented.

Why is the penny going away?

The decision to stop producing pennies comes down to economics, efficiency, and changing payment habits.

1. It costs more to make than it’s worth: Today, it costs the U.S. Mint approximately 3.7 cents to produce a single penny. That inefficiency has persisted for nearly two decades, costing taxpayers millions each year. Ending production is expected to save the federal government roughly $56 million annually.
2. Cash use is declining: Digital payments (e.g. debit cards, credit cards, ACH, and mobile wallets) now dominate everyday transactions. Roughly 41% of U.S. adults report they don’t use cash in a typical week, making low-denomination coins less relevant to modern commerce.
3. Other countries have done this successfully: Canada, Australia, and New Zealand eliminated their smallest coins years ago with minimal disruption. In those countries, cash transactions are simply rounded to the nearest five cents, while digital payments remain exact

Can I still use pennies to make a purchase?

Yes. Pennies are still legal tender, and you can continue to spend them. Businesses may still accept them, and you can also deposit pennies at BankCherokee. That said, as supplies diminish, maintaining exact change will become more difficult, particularly for cash-heavy businesses. Over time, cash transactions will naturally evolve as pennies become less available.

How does this affect your business?

For business owners, especially those that accept cash, the penny’s exit introduces a few practical considerations.

1. Expect operational changes: As penny availability declines, businesses will need to adopt cash rounding, typically rounding the final cash total to the nearest nickel. Common guidance includes:
   
   • Round DOWN if the last digit is 1, 2, 6, or 7
   • Round UP if the last digit is 3, 4, 8, or 9
   • No change if the last digit is 0 or 5
   • Digital payments are unaffected and will continue to process exact amounts.
     
2. Prepare your systems and staff: Point-of-sale systems may require updates to support rounding rules. Staff should be trained to explain changes clearly and confidently to customers.
3. Watch compliance and communication: Some states have laws related to cash acceptance and rounding practices. Clear signage and transparent communication help maintain customer trust and avoid misunderstandings.

There is no one-size-fits-all approach, and the right solution will depend on your business model, transaction volume, and customer base.

How can businesses prepare now?

Rather than focusing on a single procedure, this transition is best approached as a planning conversation. Businesses that accept cash may want to:

• Review how frequently pennies are used in daily transactions
• Consider how future cash-handling changes could impact operations and customer experience
• Evaluate payment mix and opportunities to expand digital options
• Plan for clear, proactive communication with staff and customers

Thoughtful preparation today can help avoid friction tomorrow.

What should you do with the pennies you have?

Your pennies still have value. You can:

• Spend them while merchants continue to accept them
• Deposit them at any BankCherokee branch
• Set aside a few as keepsakes from a small but historic moment in U.S. currency

Planning your next steps

While the penny may be retiring, everyday transactions don’t have to become complicated. At BankCherokee, we will begin rounding once our penny supply is exhausted, following this common rounding reference:

Look at the last digit of the cents in the final cash total, then:

• Round down if the last digit is 1, 2, 6, or 7
• Round up if the last digit is 3, 4, 8, or 9
• No change if the last digit is 0 or 5

If your business utilizes pennies in daily operations, reach out to your Community Banker at BankCherokee to discuss next steps and develop an action plan tailored to your business. We’re here to help you adapt, plan, and move forward, with practical guidance, local expertise, and a commitment to long-term relationships.