It would have to be cheaper on an ongoing basis than constantly minting coins.
Wrapping coins and exchanging them at a bank is just too tedious and time consuming.
See here for more info: https://www.mybanktracker.com/news/coin-counting-machines-ba...
It seems way less common in CA, at least according to my experience.
Insanely boring activity.
That’s not true. Here’s the truth: https://www.federalreserve.gov/aboutthefed.htm
Nobody keeps change as an investment, but compared to interest rates the bank was offering on savings accounts, this was an incredible return. I'm curious if anybody with accounts at other banks tried withdrawing change to deposit in this bank?
There's just not enough money in that to be worth it.
In this specific case, she had all the coins that accumulated over a year or so, and just took the big jar in on her errands. Probably added 10 minutes or so.
$9 isn't a big deal for her, but for someone who is unemployed with low earning potential, $9 (or milking the incentive structure) would mean a lot more.
No coins means more businesses forcing credit/debit use. More credit/debit use means it's harder to hide cash transactions and therefore means more tax revenue for the govt. As an added benefit, it creates permanent paper trails that can be utilized when convenient.
I go out of my way to pay cash, now just need to make sure I bring enough change.
It's unclear to me from the page how the supply of coins is disrupted by the pandemic. Perhaps it's because the mint is shut down, but they don't say that.
If coinage isn't an 'essential' business, that seems odd.
"The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain. As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed. With establishments like retail shops, bank branches, transit authorities and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin. The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint’s behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue."
https://frbservices.org/news/communications/063020-federal-r...
Same thing happens if coin operated machines with bill accepters don't have coins to make change. It might not be obvious, but the coins inserted into most machines aren't directly dispensable as change, so if it runs out of change, it won't be able to make change until the operator comes to service it, which might be longer intervals these days.
It sounds like the coin requests from banks to the federal reserve can't all be filled, and the federal reserve is rationing coins until that changes. I suspect some of the usually net coin receiving businesses aren't open, or aren't receiving the same number of coins, making it harder for the net coin giving businesses to get the supplies they need.
I work in a niche industry that enables stores to order coin from banks. The issue is that stores can't get coins from banks because the banks don't have them either. Banks order coins (and notes) from the Federal Reserve. The Federal Reserve is shorting the shipment of coins to all major banks.
So, when a store like Target orders coin from its bank, they may order $500 in pennies. The bank then may ship them no pennies or a fraction of the order, depending on the bank vault the coin is coming from, what inventory they have, and formulas in place.
Look for this issue to go on through at least Christmas.
I've never understood why the cost of that isn't included in the rent, landlords can't be taking that much of a cut from it.
[1] Pay someone to do your laundry by the pound.
Usually, on a per week basis, we do one change order of at least over $100. Over $100 vs $17.50... The difference adds up rather quick, even if you do a run every other day (not quite sure how frequent change orders can be before they limit that too, though).
If you pay cash and don’t have the exact amount the total will be rounded up and the excess donated to a charity.
Saw one sign offering coin redemption (I guess in one of those machines) for no fee.
In the US, it's not uncommon to see places only take credit for purchases over $20, especially restaurants.
This must be semi-regional because it's definitely not the case in the Minneapolis area (or the Midwest in general as far as I've seen). Even mom and pop restaurants will gladly take your credit card. If it exists at all, the minimum I've seen is $5, I've never seen a $20 minimum (not saying it doesn't exist, but it's definitely not "common"). Of course, the US is a huge place, so it definitely could be a regional thing.
But the article talks about closing businesses, and those coins leaving circulation until those processes work through.
The numbers are kind of all over the place depending on the source, and I'd imagine the ~40 million people on unemployment would be holding on to hard currency pretty tightly too.
On the one hand, it's a pattern that's played out over and over again this year. Toilet Paper. Paper Towels. Meat. Canned goods. Flour. Even yeast.
On the other hand, the Fed is the sole agency in charge of US currency. It swears up and down that there is plenty of physical currency to satisfy all needs. And it can't deliver on the simple promise of supplying coins.
Trouble ahead.
Thankfully Loomis dropped a bunch off at my condo’s property management office. Most places told me they were only accepting new coins from the cash delivery companies due to COVID.
Everyone uses cash for some transactions, mostly because it affords privacy.
Probably heavily skewed right now compared to normal. As of a week ago, my grocery store does not accept cash (at least at the self-serve lanes, which seem to take about 1/3 of customers) because they don't have the coins to make change.
[1] https://www.nytimes.com/roomfordebate/2012/04/04/bringing-do...
Tha article states that closure of bank premises is driving the shortage. You can get new coins at banks. You can't get coins from ATMs or grocery store cash-back.
2 weeks if you are really worried.
For most supply chains, adding a week of inventory would mean bringing on additional warehousing space and filling everything they have to the gills. I'm familiar with a factory who has a few hours of inventory on-site, and no more than ~3 days in the accompanying warehouse. They'd need about 2 more equal size warehouses to add a week of inventory.
You'd need a way to get money on the card, but that could be ATM deposits, presumably.
But in a regional coin shortage, someone with spare time might just choose to loot the coin machine, and gum up the internal coin economy. Banks are apparently offering an extra 5 percent on coins: https://www.kctv5.com/a-bank-is-paying-people-to-bring-in-th...
This does remind me of the stories a few years back about credit card churners buying coins from the us mint in bulk for the cash back, then depositing at the bank before the bills came due.
The other solution could be to get rid of cents all together.
This is what Vietnam has done and it is fantastic not having to deal with small metal change. Although, this created a new problem, they need to lose a few 0's. Being a dong millionaire (largest bill is 500k) means you've got about $45 in your pocket. Heh.
Though I think I would still prefer physical cash over digital cash even if it was just as ubiquitous.
“While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.”
Literally the second clause contradicts the claim of the first.
Some areas face a shortage because there is an oversupply in others, with a total supply that is adequate. Were they circulating more, the concentrations would presumably level out (or so the argument reads to me).
