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 last minting and the rationale behind its discontinuation
The last penny will be produced under the supervision of Treasury Secretary Scott Bessent and Treasurer Brandon Beach, following a directive from President Donald Trump earlier this year to halt production. The decision stems from the rising cost of manufacturing the coin—nearly four cents per penny—making it more expensive to produce than its actual value. Once an essential part of everyday life, used for small purchases like gumballs, parking meters, or tolls, the penny has gradually become less relevant, often accumulating in coin jars, drawers, or “leave a penny/take a penny” trays.
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.
Challenges following the penny’s exit
Although its removal was anticipated, the transition has already introduced complications for retailers and consumers. Many merchants are forced to round cash transactions to the nearest nickel, often adding a cent or two to the total. Others are encouraging customers to supply pennies to maintain transactions. In certain states, however, rounding prices can create legal issues, making the shift more complicated than expected.
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 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 associations, such as the National Association of Convenience Stores (NACS), have pressed Congress to pass laws that simplify and enable rounding procedures. Jeff Lenard, a representative for NACS, stressed, “We urgently require legislation that permits rounding, enabling retailers to provide change to these patrons.” Until these regulations are put into effect, the elimination of the penny creates both operational and legal ambiguities for numerous enterprises.
A coin with a storied history
The penny has a rich legacy, first minted in 1787, six years before the establishment of the United States Mint. Benjamin Franklin is widely credited with designing the Fugio cent, the nation’s first penny. Its current design, featuring Abraham Lincoln, debuted in 1909 to commemorate the centennial of Lincoln’s birth, becoming the first U.S. coin to depict 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.”
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 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 American penny’s departure closes a remarkable chapter in the nation’s monetary history. Its 238-year journey, from Benjamin Franklin’s Fugio cent to the familiar Lincoln penny, highlights both the evolution of U.S. currency and the changing ways Americans interact with money. While its practical use may end, the memory of the penny—its cultural and historical significance—will remain a lasting testament to a bygone era.
