The Penny Retires After 232 Years: How Businesses and Consumers Should Prepare | Coulee Bank
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The Penny Retires After 232 Years: How Businesses and Consumers Should Prepare

Although the U.S. Mint stopped producing the penny in November 2025, it remains legal tender. As pennies become less common in circulation, both businesses and consumers may have questions about cash rounding and everyday transactions. We talked with Carly Pederson, Coulee Bank Compliance Officer, to clear up a few questions and offer an easy step-by-step guide to phasing out the penny.


How Businesses Can Prepare for the Penny Phase-Out


Businesses will need to adjust cash transactions as the penny becomes less common in circulation.


Step 1: Plan for Cash Rounding

  • Continue accepting pennies and giving penny change while coins are still available.
  • Once pennies are scarce, implement rounding procedures for cash transactions. Electronic payments should always be processed to the exact cent.
  • Educate your team and post signs so customers are aware of the change.
  • Monitor your penny supply and discuss options with your bank to prepare for the transition.


Step 2: Choose a Fair Rounding Method

  • Be consistent. Select one rounding method and apply it uniformly across all transactions.
  • Symmetrical rounding: Round to the nearest nickel.

  • Round down: Always round in the customer’s favor.

  • Currently, there are no federal or state laws requiring a specific method, though some states are considering legislation. For now, businesses can choose the method that works best.


Step 3: Update Your POS System

  • While updating your point-of-sale (POS) system is optional, it helps ensure consistent rounding.
  • Many POS providers are working with the U.S. Treasury to support rounding.
  • Contact your vendor to understand options for automatic rounding of cash transactions.


Step 4: Handle Refunds and Split Payments Correctly

  • For cash refunds, refund the amount originally charged. If the transaction was rounded, refund the rounded amount; if exact, refund the exact amount. If pennies aren’t available, round to the nearest nickel.
  • Split transactions: Apply rounding only to the cash portion.
  • Example: For a $100.04 purchase split evenly between cash and credit:
  • Credit portion = $50.02 (exact)
  • Cash portion = $50.00 (rounded to nearest nickel)


How Consumers Can Navigate the Penny Phase-Out


Step 1: Continue Using Pennies

  • Currently, pennies will remain legal tender indefinitely. They can be used for purchases or deposited at your bank.


Step 2: Understand Rounding for Cash Transactions

  • Cash transactions may be rounded to the nearest nickel as pennies become scarce.
  • Non-cash payments (credit/debit, digital wallets) are always processed to the exact cent.


Step 3: Deposit Pennies at Your Bank

  • Your bank will continue accepting pennies for deposit because they are legal tender.
  • No need to rush to deposit them; pennies will likely circulate for years.


According to Pederson, the billions of pennies already in circulation won’t disappear anytime soon. In fact, it may take up to ten years for them to phase out. She encourages businesses and consumers alike to reach out to Coulee Bank with any questions or concerns.