Another one of the many consequences of the COVID-19 pandemic was the partial closure of the economy. Due to this partial closure, a nationwide coin shortage has developed because consumers are unable to spend their coins at local businesses that were temporarily closed or cut back on their operations. In addition, the U.S. Mint’s coin production also decreased at the beginning of the COVID-19 pandemic to keep employees safe. Additionally, we’ve seen an increase in online purchasing which yet again, leave coins out of the mix. All of these factors mean there are less coins now in circulation.
In response to the shortage, the Federal Reserve Chair, Jerome Powell, began limiting how much coin a financial institution could order. However, a fundamental service provided by financial institutions to their customers and members is to be able to help small business owners procure the correct amount of cash and coin to run their businesses and serve their own customers appropriately. In an effort to meet local coin needs, many community banks have taken matters into their own hands. There are reports from Loomis, Forbes and CNN sharing that community banks and credit unions have asked for help from their customers, members and anyone else in the community.
One community bank in Wisconsin offered a $5 bonus for every $100 of coins someone brought in, and it’s been reported that some people are bringing in hundreds and even thousands of dollars in coins to these financial institutions to help ease fallout of the coin shortage. Many financial institutions have said they’ve seen great success in being able to supply their businesses with the coins they need despite the shortage, thanks to their community members.
“The national coin shortage has caused a notable disruption in banks and credit union’s cash supply chains, and financial institutions have come up with creative ways to keep their supply chain moving so they can continue to serve their communities and small businesses,” said Kelly MacConnell, Vice President of Logicpath. “Financial institutions remain a strong pillar in their communities in times of need and it’s encouraging to see both financial institutions and community members come together to make a positive impact.”
What’s next? It has been reported that the U.S. Mint has resumed normal coin production and as the economy continues to regain stability, we will see less coin shortages and circulation disruptions.
To learn more about cash supply chain efficiency during times of volatility, make sure to check out our latest webinar in partnership with Loomis, “Crisis Management & Cash: COVID-19 and Future Pandemic Planning.”