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 down 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.

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 to 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 is always down, cash customers never pay more than their total — a goodwill gesture that keeps transactions fair and easy to explain.

The Consumer Upside

• Every cash sale costs a bit less — up to four cents of savings each time.

• 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) down 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 down to the nearest five cents — saving you a few cents on each purchase.”

The Bottom Line

The end of the penny marks a practical shift in how America handles cash. For businesses, rounding down simplifies operations and builds trust. For consumers, it guarantees fairness, and even a little savings on every cash transaction.

It’s a small change that makes cents — and saves them, too.

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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.