Following over two centuries of circulation, the American penny is slated for discontinuation, concluding a 238-year period in the country’s financial narrative. The last coin is scheduled for production today at the US Mint in Philadelphia, signifying the conclusion of an epoch.
The final minting and reasons for retirement
The final penny will be manufactured under the guidance of Treasury Secretary Scott Bessent and Treasurer Brandon Beach, in accordance with President Donald Trump’s earlier directive this year to cease its creation. This choice is driven by the escalating production cost of the coin—approaching four cents per unit—rendering its creation more costly than its intrinsic worth. Once a ubiquitous element of daily transactions, utilized for minor acquisitions such as gumballs, parking meters, or road tolls, the penny has progressively diminished in importance, frequently ending up in coin jars, desk drawers, or “leave a penny/take a penny” dishes.
The one-cent coin outlasted the half-penny by more than a century and a half, leaving only larger denominations such as the nickel, dime, quarter, and the seldom-used half-dollar and dollar coins in active circulation. Despite the cessation of its production, the penny will remain legal tender, allowing it to retain a place in commerce if people still wish to use it.
Obstacles after the penny’s removal
Despite its expected discontinuation, this change has already presented difficulties for both vendors and shoppers. Numerous businesses are now compelled to adjust cash payments to the closest five-cent increment, frequently increasing the total by one or two cents. Other establishments are prompting patrons to provide one-cent coins to facilitate transactions. Nevertheless, in some jurisdictions, adjusting prices in this manner could lead to legal complications, rendering the transition more intricate than initially foreseen.
Ironically, although eliminating the penny might lead to financial savings, the potential necessity of manufacturing a greater quantity of nickels—which are more expensive to produce than pennies—could negate these benefits. Both businesses and governmental bodies are currently navigating a period of instability. Mark Weller, who serves as the executive director of Americans for Common Cents, states, “By the time we reach Christmas, the problems will be more pronounced with retailers not having pennies.” Weller highlights that nations such as Canada, Australia, and Switzerland implemented well-defined strategies when removing low-value coinage, whereas the United States has merely issued a concise declaration, leaving much of the practical adjustments to be handled by enterprises themselves.
Rounding practices and their implications
Different companies are exploring various rounding methods. Kwik Trip, a chain of convenience stores located in the Midwest, has opted to round down cash transactions when pennies are not available, to prevent customers from being overcharged. This method, however, incurs a financial burden. Given millions of cash transactions annually, the chain projects that this rounding policy could result in losses of several million dollars per year.
On a larger scale, the Federal Reserve Bank of Richmond projects that rounding financial exchanges to the nearest five cents could impose an annual burden of approximately $6 million on American consumers—equating to roughly five cents per household. Although this amount is relatively small, universal implementation of rounding across the nation is not feasible due to varied state laws. Jurisdictions including Delaware, Connecticut, Michigan, and Oregon, alongside municipalities like New York, Philadelphia, and Washington, D.C., mandate exact change for specific types of transactions. Furthermore, federal initiatives such as SNAP necessitate precise pricing to guarantee equitable treatment for recipients utilizing debit cards. Businesses that round down cash transactions in these situations might encounter legal repercussions or fines.
Industry groups, including the National Association of Convenience Stores (NACS), have urged Congress to enact legislation that clarifies and facilitates rounding practices. Jeff Lenard, a NACS spokesperson, emphasized, “We desperately need legislation that allows rounding so retailers can make change for these customers.” Until such policies are implemented, the retirement of the penny introduces operational and legal uncertainty for many businesses.
A coin with a rich past
The penny boasts a storied past, initially produced in 1787, predating the United States Mint’s creation by six years. Benjamin Franklin is largely recognized for conceptualizing the Fugio cent, the country’s inaugural penny. Its present appearance, showcasing Abraham Lincoln, was introduced in 1909 to mark the hundredth anniversary of Lincoln’s birth, making it the first American coin to feature a president.
Over time, however, the one-cent coin has experienced a consistent decrease in its practical application and cultural importance. The Treasury Department calculates that around 114 billion pennies are still in circulation, but a significant number are not actively used, often stored in containers or kept as souvenirs instead of being spent in purchases. The public’s response to the coin’s removal from circulation has been subdued, indicating its reduced function in daily financial exchanges.
Despite its diminishing practical use, the one-cent coin holds a special place in the hearts of many Americans. Joe Ditler, a 74-year-old author residing in Colorado, reminisces about his childhood, when he would use pennies for arcade games or flatten them on train tracks. Currently, he mostly uses them infrequently for cash purchases or contributes them to tip jars. He muses, “They evoke memories that have remained with me throughout my entire life. The penny has enjoyed a remarkable existence. However, it’s likely time for its discontinuation.”
Legacy and cultural impact
The retirement of the penny marks more than just the end of a physical coin—it represents a shift in how Americans interact with money. What was once a practical tool for small purchases has become largely symbolic, embedded in family traditions, historical memory, and American culture. Collectors and enthusiasts are likely to preserve the final minted coins, ensuring that the penny’s legacy endures in some form, even as it exits everyday circulation.
While businesses and consumers still face hurdles in adjusting to its disappearance, this phase-out also mirrors wider economic conditions. Increased manufacturing expenses, evolving consumer behaviors, and the widespread adoption of digital payment methods have collectively reduced the need for the one-cent coin. As our society moves towards a more digitized and streamlined approach to monetary exchanges, the symbolic significance of the penny might endure beyond its functional purpose.
The discontinuation of the American penny marks the end of a significant era in the country’s financial narrative. Its 238-year existence, spanning from Benjamin Franklin’s Fugio cent to the well-known Lincoln penny, underscores the progression of U.S. currency and the evolving relationship Americans have with their money. Although its functional utility may cease, the penny’s legacy—its cultural and historical importance—will endure as a permanent reminder of a past age.
