COVID-19 has altered almost every facet of our lives. And it doesn’t seem to be done yet. The latest trick from up COVID-19’s sleeve? A national coin shortage.
How did it come to this? How did the nation get to a point where businesses across the country are begging patrons to pay in exact change?
How Coins Go from Here to There and Everywhere In Between
Let’s take a break from 2020. In normal times, businesses withdraw coins from banks in order to stock cash registers. When change is needed for a transaction, the cashier simply hands off the correct amount to the customer.
Now, this costumer has a few choices to make. She can spend the coins, save them in a jar, or exchange them at a bank or coin service (i.e. Coinstar). However, let's simplify things a bit and ignore saving them in a jar for now. In the long run, those mason jars of coins end up spent or exchanged. So for the moment, it’s of little consequence.
If the coins are spent, then they end up in the cash register of a business and they will eventually be sent back out into the world as change or deposited at a bank. If the coins are exchanged for bills, then the bank will hold them until a business comes calling for more coins.
As for how coins enter this circle of life, we need to turn to the
The story does have a few more paths interwoven within this. But for our purposes, this is enough to understand what has happened here.
Stopping the Flow
So let’s return to 2020. First up, shops closed across the board to combat the spread of COVID-19. Then, the
Remember how I said jars of coins are inconsequential in the long run? Well, we are not so lucky in the short run. The risk of contaminated money has turned jars of loose change into nuclear waste—no one wants to touch it and no one knows what do with it. So it never gets spent or deposited.
And it doesn’t end there.
To top it off, the
In short, the flow of coins from government to banks, banks to businesses, businesses to customers, and customers to banks has all but stopped. Almost every link in the chain has been interrupted.
Now, all is not lost. While it is still an inconvenience, Wawa has decided to let customers use cash on the condition that purchases are rounded up to the nearest dollar and then the difference is donated to charities. This move puts a positive spin on the perceived loss for those unfamiliar with Swedish rounding.
And this may be a more long-term solution. As many other countries have done prior, it may be time to abandon the penny. The
But human ingenuity does not end there!
All in all, I don’t think COVID-19 is done with us yet. Hindsight might be 2020, but the rest if 2020 is still unclear. This year has been riddled with surprises and I imagine there are more to come. Whether the solution is abandoning the penny, let banks pay premiums for coins to reallocate the supply, or let private businesses issue their own currencies,