Dive Brief:
- The penny shortage is making it difficult for retailers to give exact change to cash-paying customers — posing a particularly thorny compliance problem, said eight industry groups, including FMI — The Food Industry Association and the National Grocers Association.
- In a joint letter to Agriculture Secretary Brooke Rollins, the groups said the shortage is “beginning to cause a cascade of negative events in stores across the country and has a serious implication for SNAP retailers’ compliance with the SNAP equal treatment provisions.”
- The groups are urging the USDA to provide guidance on the compliance issue and on how retailers can round cash transactions without violating federal law.
Dive Insight:
In the Monday letter, the industry groups told the USDA that the penny shortage is forcing retailers to round to the nearest nickel for cash-paying customers, which results in those shoppers paying a different price than consumers using electronic payments. Under SNAP equal treatment provisions, though, SNAP-authorized stores must treat consumers the same, regardless of whether they use food assistance benefits.
“Without clear guidance from USDA, retailers face uncertainty about how to remain compliant with SNAP rules while managing a very real coin shortage,” Max Wengroff, senior government relations manager at the NGA, said in a statement.
The groups noted in the letter that they have also requested immediate guidance from the Treasury “on a myriad of other legal and operational issues that have arisen or have been compounded by ceasing the minting of the penny.”
The penny shortage stems from the U.S. Mint stopping production of the 1-cent coin earlier this year. As of mid-October, more than one-third of Federal Reserve vaults have suspended penny orders and deposits, according to the NGA.
“Grocers of all sizes are navigating the operational fallout of this change,” Wengroff said. “Providing temporary flexibility would prevent confusion and ensure a level playing field while maintaining the integrity of the SNAP program.”
A few weeks ago, Kwik Trip became the first major convenience store retailer to unveil a new policy for rounding cash transactions as a result of the penny shortage. The company said that as its convenience stores run out of pennies, they will round cash transactions down to the nearest 5 cents but continue to charge the same amount when customers pay with debit or credit cards.
