Preparing for the End of the Penny: How Merchants Can Manage the Transition
Written By
Arbi John
The U.S. Mint penny discontinuation marks a significant change for businesses that handle cash every day. Rising minting costs and the ongoing shift toward modern transaction systems have prompted the decision, marking the first time in more than two centuries that the penny will not be minted.
Pennies will remain legal tender, yet circulation will gradually decline as coins wear out and the Federal Reserve distributes existing supplies until they’re depleted.
This transition affects businesses that handle cash every day. Reduced availability may change the flow of cash transactions, influencing how totals appear at checkout and how employees support customers during the transition. Preparing now helps prevent disruptions later, while continuing to give customers a smooth and consistent checkout experience.
What’s Changing and When
The Mint produced its final batch of pennies on Nov. 12, 2025. Circulation will now decrease slowly as older coins leave the system and aren’t replaced. The phaseout will unfold over several years rather than in a single moment, which gives businesses time to adjust their cash-handling routines.
Pennies will remain legal tender throughout this period, yet access to the one-cent coin will depend on how quickly the remaining stock moves through the system.
This type of transition isn’t unprecedented. Countries such as Canada and Australia ended low-denomination coin production in previous years, adopting cash rounding practices that became standard across retail and service industries. Businesses in those markets found that early preparation helped simplify the shift and gave customers clarity during the adjustment period.
How the End of Penny Production Affects Businesses
As circulation tightens, the most visible change for merchants will be a steady reduction in the number of pennies arriving in standard coin orders. Shipments may begin to include fewer coins than expected, and over time, some orders may not contain pennies at all. This shift doesn’t happen overnight, yet it does mean businesses will need to adjust how they manage the register as availability declines.
A lower supply also creates the need for rounding when customers pay with cash. Cash rounding rules apply only to the final transaction amount and only when pennies aren’t available. Card payments, digital wallets and other electronic transactions continue to process exact totals without interruption, so the impact is limited to physical cash handling.
These changes can influence several areas of day-to-day merchant cash management. Many merchants may need to activate rounding features in their point-of-sale systems or confirm that their software already supports this type of adjustment. Staff may also need clarity on how to explain rounding at checkout, especially during the early stages when customers are still becoming familiar with the new approach. Even though the shift is gradual, taking time to understand how it affects cash flow helps businesses maintain consistency at the register and keep customer experiences smooth.
What Businesses Should Do to Prepare for the Penny Shortage in 2026
Planning early allows merchants to operate smoothly through the phaseout. Consider the following steps:
- Review your coin inventory: Understand how long your current supply of pennies typically lasts. Monitoring usage now will help you anticipate when rounding may become necessary.
- Plan for rounding: Rounding applies only to the final transaction amount and only when pennies aren’t available. Totals ending in 1, 2, 6 or 7 cents round down to the nearest nickel, while totals ending in 3, 4, 8 or 9 cents round up. Amounts ending in 0 or 5 cents don’t change. These adjustments apply only to cash payments. Most POS providers already support cash-rounding features, so reviewing your system ahead of time helps you activate the right settings when the change becomes necessary.
- Train your team: Employees should know why pennies are no longer available, how rounding works and how to communicate the change to customers. Clear, consistent language can prevent confusion at checkout.
- Communicate with customers: Signage at registers, updates on receipts and FAQs on your website help set expectations. Customers will adapt quickly when the policy is explained in simple terms.
- Stay in contact with your bank: Keep your relationship manager updated on your coin needs. Your branch team can help you monitor supply changes, forecast demand and prepare for the phaseout as circulation tightens.
How Banc of California Is Supporting Clients
Banc of California will continue fulfilling standard change orders while penny supplies remain available, and clients can maintain their usual ordering routines during this period. To support fair distribution across all businesses, bulk or stockpiling requests can’t be accommodated, though requests for additional pennies may be reviewed individually based on availability.
Relationship managers and branch teams are ready to guide merchants through the transition and answer questions as circulation levels shift. Our teams coordinate closely with Federal Reserve and Treasury guidance, giving clients up-to-date information on cash availability and coin-order planning. If you need support, your relationship manager can walk you through the next steps and help you prepare for any adjustments ahead.
Preparing for a Cashless Future: How to Handle Transactions Without Pennies
The end of penny production aligns with broader trends in payment behavior. Customers increasingly prefer digital and contactless transactions, and many merchants have already expanded their electronic payment options to reduce their reliance on physical currency. As this shift continues, strengthening your digital payment capabilities can help minimize disruptions tied to cash availability.
Businesses looking to modernize their payment systems can explore BancEdge, our end-to-end payment processing solution. BancEdge supports card acceptance, online payments and integrated reporting, giving merchants a straightforward way to handle transactions as more customers choose digital options. Strengthening these capabilities now helps businesses stay adaptable and keeps payments running smoothly as preferences continue to shift.
Start Preparing for the Penny Phaseout
The coming phaseout marks a meaningful shift for merchants that rely on cash transactions, and preparing early helps your business stay ahead of changes in circulation. Banc of California will continue to monitor guidance from the U.S. Mint and Federal Reserve and keep clients informed as the transition moves forward.
If you have questions or would like support as you plan for the phaseout, reach out to your Relationship Manager or your local branch team.
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