- The National Grocers Association (NGA) along with five other retail industry groups have called on the federal government to take "rapid action" to address a national coin shortage, according to a press release.
- At issue is the Federal Reserve’s plan to ration the distribution of coins, which was announced earlier this month. NGA and the other groups said in a letter to the U.S. Treasury and the Federal Reserve that some of their member businesses can’t get coins at all. This is a huge problem for grocery and other retail businesses that see a heavy volume of cash transactions, the letter stated.
- The groups have asked the government to distribute more coins from existing inventory, increase coin production at the U.S. mint or prioritize coin distribution to businesses that need them most in order to process cash transactions.
The coin shortage has hit the U.S. due to the economic shutdown during COVID-19, which slowed purchasing activity and reduced the flow of coins in the economy. According to The New York Times, the U.S. Mint also slowed production intentionally as a result of protective measures put in place for its employees.
NGA, which represents independent grocers, said roughly one out of every five transactions at grocery stores is a cash transaction.
"Independent grocery serves many communities throughout the U.S. that are underbanked or unbanked, and without availability of coinage, these customers are going to be hardest hit," NGA’s president and CEO Greg Ferrara said in a statement.
The NGA said cash is used more frequently among low-income earners who may not have access to a full range of banking services. About 43% of payments are made in cash by people with incomes under $25,000, and these consumers are the ones most at risk of having their purchases disrupted because of the coin shortage.
A bank manager told NPR that convenience stores and grocery stores that still operate with cash will have to make changes to their operations.
Though the rationing of coin distribution is expected to be temporary, NGA and the other organizations said this is already an emergency situation for member businesses. In addition to circulating more coins as soon as possible, the letter asks the U.S. Mint to double down on its efforts and replenish reserves so a shortage like this doesn’t happen again.