Pennies Are Ending! 

 

In early 2026, the U.S. Mint will stop producing pennies, ending more than two centuries of 1-cent coinage. For most Americans, this won’t come as a surprise — inflation and the dominance of digital payments have already made pennies nearly irrelevant. But for businesses that still handle cash, it means adopting a clear rounding policy. 

 

Consider a simple approach: cash transactions will always be rounded to the nearest five cents. Credit, debit, and digital payments will continue to be charged to the exact cent. 

 

Why the Change Is Necessary 

It now costs over 3½ cents to produce a single penny, according to the U.S. Mint — more than triple its face value. Continuing to mint pennies costs taxpayers tens of millions each year, while banks and retailers already face shortages as circulation slows ahead of the phaseout. (U.S. Mint Annual Report, 2024) 

 

The idea isn’t new: Congress first considered ending the penny in the late 1980s, when Rep. Jim Kolbe (R-AZ) introduced a bill to phase it out and round cash sales to the nearest nickel. The debate has resurfaced regularly ever since. 

 

Real-World Business Implementation 

Major businesses are already moving ahead: 

• McDonald’s and Wendy’s have begun rounding cash transactions to the nearest five cents—Wendy’s recommending rounding down in favor of the customer. Business Insider 

• Convenience chain Kwik Trip has announced that all cash purchases will be rounded down to the nearest five cents due to penny shortages. The Sun+1 

• Chain Love’s Travel Stops is rounding cash transactions to the nearest five cents and posting notices of penny supply shortages. Reuters+1 

 

These practical moves by large retail and food chains underscore the need for businesses to prepare now rather than waiting for official government guidance. 

 

The Business Benefits 

1. Faster, Cleaner Cash Handling -Removing pennies speeds up every cash transaction, reduces counting errors, and shortens end-of-day reconciliations.      

2. Lower Operational Costs - No more ordering or storing low-value coins. Fewer coin rolls and simpler deposits translate into small but consistent savings. 

3. Simpler Bookkeeping - Using a “Cash Rounding Expense” account keeps adjustments transparent and makes audits and reconciliations straightforward. 

4.  A Customer-First Message - Because rounding speeds checkout times, everyone benefits. 

 

The Consumer Upside 

• Card and digital payments stay exact, with no rounding. 

• Shorter lines, no pennies, and fewer change delays at checkout. 

 

How Businesses Should Implement 

• Round only cash totals (after tax) to the nearest five cents. 

• Show the rounding on receipts as a separate line item. 

• Train employees to explain it simply: 

“Because the U.S. Mint is ending penny production, cash totals are rounded to the nearest five cents.” 

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The information contained in this newsletter is provided for educational purposes and reflects our understanding of current federal developments as of the date of publication. It does not constitute legal, accounting, or tax advice. Application of this information may vary depending on individual facts and circumstances. Consult your CPA or legal advisor before acting on any matter discussed herein.