Cash is no longer king at some businesses in the Monadnock Region, which are asking customers to use card or contactless payments due to a national coin shortage and safety concerns around exchanges of physical money.
At Hannaford Supermarket in Keene, laminated signs at every cash register and self-checkout station request that shoppers using cash “pay with exact change” because of the coin shortage.
Hannaford is one of several supermarket chains struggling to keep its registers full while coin circulation in the U.S. economy is down during the pandemic.
Price Chopper in Keene also posted signs encouraging customers to use contactless payment methods for the same reason.
Hannaford’s corporate management provided its supermarkets with guidance on handling the coin shortage, but each location can respond to its own situation as necessary, according to Ericka Dodge, a spokesperson for the company.
Dodge added that Hannaford stores still provide change for cash payments but are not currently accepting customers’ cash in exchange for rolls of coins.
The issue of a national coin shortage gained prominence in June when Jerome Powell, chairman of the Federal Reserve, told the House Financial Services Committee that “the flow of coins through the economy has … kind of stopped.”
In response, the Fed, which determines U.S. monetary policy, began rationing its distribution of coins and convened a task force comprised of officials from the U.S. Mint, national banking associations and armored carrier companies. The task force expects to publish in the coming days its recommendations for remedying the coin shortage.
The limited distribution and circulation caused concern at some local banks in the spring.
In late June, Mascoma Bank in Keene began ordering coins earlier than it had been after receiving fewer than it requested in previous shipments, according to Andrea Alliy, the bank’s operations manager.
Mascoma never ran out of coins for its customers, although the bank has stopped exchanging rolls of coins for cash with members of the general public in order to reserve a sufficient supply for customers, Alliy said.
Some regional money lenders, such as Cheshire County Federal Credit Union, noticed similarly minor reductions in their coin flows, according to their employees. Others, like Savings Bank of Walpole in Keene, have been unaffected.
“It really hasn’t impacted us that much,” Mark Bodin, the bank’s president, said. “Coin-intensive businesses are bringing coins to us all the time, and we haven’t seen the trickle-down effects.”
The Fed attributed the decline in coin circulation to the pandemic-related closings of banks and other coin-intensive industries in many states, as well as limited production by the U.S. Mint while much of its staff was furloughed this spring.
The Mint has since ramped up its efforts, however. The federal coin-making agency produced nearly 1.6 million coins in June and expects to increase production to 1.65 billion each month for the rest of the year after minting an average of 1 billion coins per month in 2019.
But the increased output has not yet found its way to some businesses.
Clothes Line Laundromat in Jaffrey has been dealing with a shortage of quarters, Lisa Young, a laundry attendant, said her boss told her. As a result, the laundromat decided to make its cash-for-coins machine available only to customers, rather than the general public.
Other coin-operated laundromats in the Monadnock Region are aware of the circulation issues but have not been affected by it, according to their employees.
Nonetheless, the Federal Reserve is not the only policymaker in search of a solution.
In June, U.S. Sen. Maggie Hassan, D-N.H., co-authored a bill that would allow the U.S. Mint to adjust the metal content of the coins it produces. The legislation, which aims to make the minting process less expensive, would also help the country address its coin shortage, Hassan’s office said in a press release.
Putting more coins in circulation, however, does not address the evidence that fewer customers are paying with cash due to concerns around COVID-19.
This trend has accelerated with many businesses encouraging customers to use touchless payments, which the Centers for Disease Control and Prevention recommends in order to reduce the virus’s transmission.
Terra Nova Coffee Roasters in Keene is asking customers to avoid paying with cash in an effort to limit contact with workers, according to its owner, Jeff Murphy. In rare cases when customers insisted on using cash, Murphy said workers at the espresso bar set aside the money for several days in case it was contaminated.
While they are inclined to do so for safety reasons, small business owners are concerned about the shift toward a cashless economy — whether due to a coin shortage or global health crisis.
“We don’t want to do it forever,” Murphy said. “It’s better for the businesses to take cash because of credit card fees.”