After more than two centuries, the American penny will be retired, closing a 238-year chapter in the nation’s monetary history. The final coin is set to be minted today at the US Mint in Philadelphia, marking the end of an era.
The last minting and the rationale behind its discontinuation
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 methods and their consequences
Different businesses are experimenting with rounding strategies. Kwik Trip, a Midwest-based convenience store chain, has chosen to round down cash purchases where pennies are unavailable, aiming to avoid overcharging customers. This approach, however, carries a financial cost. With millions of cash transactions each year, the chain estimates that rounding could cost them several million dollars annually.
On a broader scale, the Federal Reserve Bank of Richmond estimates that rounding transactions to the nearest nickel could collectively cost American consumers about $6 million per year—roughly five cents per household. While this figure is relatively modest, rounding cannot be implemented uniformly nationwide due to differing state regulations. States like Delaware, Connecticut, Michigan, and Oregon, along with cities such as New York, Philadelphia, and Washington, D.C., require exact change in certain transactions. In addition, federal programs such as SNAP mandate precise pricing to ensure fairness for beneficiaries using debit cards. Retailers rounding down cash transactions in these contexts could face legal challenges or penalties.
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 storied history
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 penny has seen a steady decline in practical use and cultural significance. The Treasury Department estimates that approximately 114 billion pennies remain in circulation, yet many are underutilized, tucked away in jars or collected as keepsakes rather than used in transactions. Public reaction to the coin’s discontinuation has been muted, reflecting its diminished role in everyday commerce.
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.”
Heritage and societal influence
The discontinuation of the penny signifies more than merely the cessation of a tangible coin; it indicates a transformation in the way Americans engage with currency. What was formerly a functional instrument for minor transactions has largely evolved into a symbolic item, woven into familial customs, historical recollections, and the broader American ethos. It is anticipated that collectors and aficionados will safeguard the last produced coins, thereby guaranteeing that the penny’s heritage persists in some capacity, even as it departs from routine use.
While challenges remain for businesses and consumers adapting to its absence, the phase-out is also a reflection of broader economic realities. Rising production costs, changing consumer habits, and the prevalence of digital payments have collectively diminished the necessity of the one-cent coin. As society transitions toward a more digital and rounded approach to cash transactions, the penny’s symbolic role may outlive its practical utility.
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.
