2025 Penny

I saw a commercial last night that was for the 2025 Penny.
There is a company, (I don't think it is government or mint affiliate) selling rolls of 2025 Denver and Philadelphia mint rolls of 100 pennies for $9.99
If the penny is obsolete now (that's what I heard) how will consumers that buy with cash, how will they get their loose change back exact? Will every store and every cash transaction be rounded up now?
If it is rounded up, will this effect cards also?

 

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The prices will be rounded up or down. If something is normally $4.69 then the price will be rounded up to $4.70. If it were normally 4.42 it would be rounded down to $4.40.

Bruce

 

No, card transactions, any non-cash transaction will continue to be denominated in cents.

 

I disagree. There have been trillions of Lincoln Cents minted since 1909. There are plenty in circulation to be continuously used for decades to come. Some people act like life will be disrupted because they aren't going to be minted any longer.

I don't mean you if course

 

There's still an estimated 300 billion cents out in circulation; they are not being recalled, and are still legal tender. It will be a while before an actual shortage will force rounding, which will only need to be done for cash transactions (credit cards, debit cards, and checks can still pay in cents). Eventually when retailers can't, or no longer feel like bothering to, acquire sufficient pennies to make exact change, they'll just have to round to the nearest nickel when giving out change. Some retailers are already doing so.

Some people are making a big deal out of it, probably just because: a. a general resistance to change, b. want to hoard/sell pennies under some belief that the fact they're not minted anymore suddenly made something near worthless valuable, or c. want any excuse to criticize the person who made the decision to stop minting them. But the change has been made, looks like it will stick, and people will adapt eventually; life will go on without that much of a disruption.

 

A coin shop in Weir NH is paying .02 for each pre 1982 penny for copper melt value
Search and roll them up save with the Wheaties

 

On the rounding thing, I'll point out that due to a lack of clear guidance from the government, some retailers like Quik Trip have implemented a policy of rounding the total down to the nearest nickel in all cases. I read elsewhere that one factor is to avoid customer complaints, and in some jurisdictions the law requires the same price for credit card or cash transactions, so they're rounding down to avoid that hassle from customers.

https://www.mprnews.org/story/2025/10/06/kwik-trip-ditches-pennies-rounds-down-cash-transactions

 

Well it would avoid legal trouble and customer complaints, and it would at worst cost them 4 cents per cash transaction (assuming all ending digits have equal chance of coming up, it would cost on average about *2 cents per cash transaction), so seems like a good idea in the long run.

It might not hurt for the federal government to issue some guidance, maybe even get Congress to pass something at a national level, to avoid the legal hassles a lot of state/city/local laws have about such things. But so far it seems retailers are adapting just fine even absent such assistance and/or guidance.

*P.S. I've not done the math, but here's a story problem for you: assuming all digits from 0 to 9 have equal chance of coming up, and a retail always chooses to round in the customer's favor to the nearest nickel to give change, what's the average cost of doing so per cash transaction? I'll assist in the set up here:
If the change they need to give ends in...
0 or 5: costs 0.00
1 or 6: costs 0.04
2 or 7: costs 0.03
3 or 8: costs 0.02
4 or 9: costs 0.01
Good luck and show your work lol. It's been a long time since I've done statistics, but I came up with an average of $0.02 per cash transaction, assuming every digit has an equal chance of showing up. That's less per transaction than it costs most retailers to process credit or debit cards; I think they'll be OK.

 

And you can use the Fed's consumer survey data to figure out how many cash transactions there are...

 

Some stores are already rounding up or down. Canada did the same thing years ago. At 20 times the face value of 2025 cents is insane, especially when you see the mintage figures.

 

Thanks for sharing this.

 

I think you've got your 'givens' backwards. Not that it'll effect the outcome of your problem.

If the change the shop needs to return to the customer is 1 or 6 cents it'll only cost them $0.01 when rounding down. Not $0.04.

The same pattern follows through with 2 or 7 cents, costing the shop $0.02, not $0.03

3 or 8 cents change will cost the shop $0.03

And finally, 4 or 9 cents change will cost the shop $0.04

So, in summary:
0 or 5: costs 0.00
1 or 6: costs 0.01
2 or 7: costs 0.02
3 or 8: costs 0.03
4 or 9: costs 0.04

And in answer to your problem, the ultimate answer doesn't change from your original answer. It's still going to cost $0.02 per transaction on average.

Assume 10 transactions. That would mean one transaction with the change evenly distributed as:

$0.00 x 2 = $0.00
$0.01 x 2 = $0.02
$0.02 x 2 = $0.04
$0.03 x 2 = $0.06
$0.04 x 2 = $0.08
--------------------------
Total cost = $0.20
Divided by # transaction 10
$0.20/10 = $0.02 per transaction

 

The terminal digit distribution of cash transactions is not likely to be uniform. Some people still use cash for one or two items vs. card for more.

A $1.29 candy bar with / without a $2.79 bottle of soda. With sales tax... $1.40, $3.03, or $4.44 (and there is already rounding going on there!!!!).

Vigorish of $0.00, $0.02, or $0.01 all unfavorable.

But, if you are a store, you have years of data and modeling this is trivial.

 

It works out the same either way. I was making the assumption that they'll round in favor of the customer, not necessarily to the nearest nickel if the nearest nickel is in favor of the store, so if the change they need to give the customer is 1 cent, they'll give out 5 cents, thus costing them 4 cents. If they round down to 0, they cost the customer 1 cent... and that might lead to customer complaints or legal hassles (I don't know who's getting the law involved for 1 cent lol but you know, some bored lawyer with time on his hands might try a class action lawsuit or something).

You're looking at it from the other end of the transaction: if the customer owes the store $1.01, the store will ask for $1.00, thus costing the store 1 cent. I was looking at it from the perspective of how much change is due to the customer, not the total the customer needs to pay to the store.

But it's a distinction that makes no difference, because the math works out the same either way. Both ways are correct, and arrive at the same answer. The average cost of rounding to the nearest nickel, if always done in the customer's favor, and assuming all 10 digits have equal chances of coming up, is 2 cents per cash transaction.

But... if they round to the nearest nickel always, even when it's in favor of the store... then the average cost per transaction (again assuming all digits have equal chances of showing up)...

Change due if it ends in _ will cost them:
0 or 5: 0
1 or 6: -1 cent
2 or 7: -2 cents
3 or 8: 2 cents
4 or 9: 1 cent

An average cost of... nothing. In theory that makes this method mutually beneficial. But I'm sure a store is willing to lose an average of 2 cents per cash transaction for the sake of customer goodwill, avoiding complaints, and avoiding legal hassle. That's less than it costs them to accept credit and debit cards.

TLDR: Average cost of rounding to the nearest nickel (assuming all 10 terminal digits are equally likely) if always done in the customer's favor: 2 cents per cash transaction. Average cost of rounding to the nearest nickel, regardless of whether that favors the store or the customer (again assuming all 10 digits are equally likely): 0.

 

Possibly not, but in the long run, over many cash transactions in many places, it would likely be pretty close. But assuming worst case scenario, the most a single cash transaction can possibly cost the store, if they round in the customer's favor, is 4 cents. 2 cents per transaction is the average cost if all digits are equally likely; but at maximum, if they're not, is 4 cents per cash transaction. Still not that bad, and in all likelihood it would be better than that.

 

I’m thinking business with smart management will change their prices to match the sales tax that will be charged to make it end in a 5 or a 0.

 

As I've posted several times already, rounding in favor of the customer does add up for a large convenience store chain like Kwik Trip. In a different article they said their policy will cost them $2 million a year. That seems crazy until you do the math based on their customer volume. They only need 1 out of 7 customers paying cash and being out that 2 cents average for it to add up to $2M.

Edit: sorry I spelled Kwik Trip wrong.

 

If they're doing enough business that 2 cents per cash transaction adds up to $2 million in a year (therefore, 200 million cash transactions), then $2 million is clearly a small percentage of their total sales and not that much to them proportionately. I doubt they're particularly concerned.

 

Google says there are 1,180 QT locations. At $2mm per year that would be an average of $1,695 per store or $4.64 per day. If they add 1¢ to their top 3 or 4 sellers, they could make up the difference.

 

They were concerned enough to mention it in a news article. These corporations know how to count their pennies. That's $2M straight out of their pockets. FYI they have 600 million customers a year so that's where my 1 out of 7 cash customers comes from, which technically was rounded up from $1.7M. I should have used 1 out of 6 customers, which is exactly $2M.

Edit: source for Kwik Trip annual customers https://finance.yahoo.com/news/kwik-trip-serves-11-5-110400927.html