Why do U.S. coins seem to be in short supply?
federalreserve.gov
federalreserve.gov
It would have to be cheaper on an ongoing basis than constantly minting coins.
Wrapping coins and exchanging them at a bank is just too tedious and time consuming.
That’s not true. Here’s the truth: https://www.federalreserve.gov/aboutthefed.htm
The Congress has directed the Fed to conduct the nation's monetary policy to support three specific goals:
* maximum sustainable employment,
* stable prices, and
* moderate long-term interest rates.
These goals are sometimes referred to as the Fed's "mandate." [hn formatting added]> conducts the nation’s monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy;
(Emphasis mine)
Every single bullet that follows either restates the first bullet or is tertiary.
It seems way less common in CA, at least according to my experience.
https://www.cnbc.com/2017/12/19/more-than-75-percent-of-us-o...
See here for more info: https://www.mybanktracker.com/news/coin-counting-machines-ba...
Another major problem was people taking shavings from the edge of coins and trying to pass them off as unaltered; it's the reason many coins have some kind of pattern imprinted around the edge.
Now when I'm dealing with a lot of cash transactions & the coins are piling up, I just keep them with me, and make sure to spend them when I can. Or I donate them to a charity box.
But yes, the lawsuits raised the risk profile of in-branch machines so away they went in most cases. And so did dealing with massive, heavy bags of coins, which are much harder to move than they appear from bank heist movies.
TD Bank was esp. loved by kids... but also lawyers, as it was a great story to tell: kids losing their hard won pennies through a miscounting machines, and since the machines only undercounted, "gasp, must be malicious evil banks again after our money". After multiple suits, bye bye to the machines, and bye bye to yet another way to teach folks that saving can be fun, even if it's less fun than spending.
Insanely boring activity.
Nobody keeps change as an investment, but compared to interest rates the bank was offering on savings accounts, this was an incredible return. I'm curious if anybody with accounts at other banks tried withdrawing change to deposit in this bank?
There's just not enough money in that to be worth it.
In this specific case, she had all the coins that accumulated over a year or so, and just took the big jar in on her errands. Probably added 10 minutes or so.
$9 isn't a big deal for her, but for someone who is unemployed with low earning potential, $9 (or milking the incentive structure) would mean a lot more.
No coins means more businesses forcing credit/debit use. More credit/debit use means it's harder to hide cash transactions and therefore means more tax revenue for the govt. As an added benefit, it creates permanent paper trails that can be utilized when convenient.
I go out of my way to pay cash, now just need to make sure I bring enough change.
“Personally Identifiable Information (PII) The term “PII,” as defined in OMB Memorandum M-07-1616 refers to information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other personal or identifying information that is linked or linkable to a specific individual. The definition of PII is not anchored to any single category of information or technology. Rather, it requires a case-by-case assessment of the specific risk that an individual can be identified. In performing this assessment, it is important for an agency to recognize that non-PII can become PII whenever additional information is made publicly available - in any medium and from any source - that, when combined with other available information, could be used to identify an individual.“ https://www.gsa.gov/reference/gsa-privacy-program/rules-and-...
It's unclear to me from the page how the supply of coins is disrupted by the pandemic. Perhaps it's because the mint is shut down, but they don't say that.
If coinage isn't an 'essential' business, that seems odd.
"The primary issue with coin is a dramatic deceleration of coin circulation through the supply chain. As of April 2020, the U.S. Treasury estimates that the total value of coin in circulation is $47.8 billion, up from $47.4 billion as of April 2019. While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed. With establishments like retail shops, bank branches, transit authorities and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin. The coin supply chain includes many participants, from the U.S. Mint who produces new coin, to the Federal Reserve who distributes coin on the U.S. Mint’s behalf, to armored carriers, banks, retailers and consumers, all of whom have a role to play in helping to resolve this issue."
https://frbservices.org/news/communications/063020-federal-r...
I've never understood why the cost of that isn't included in the rent, landlords can't be taking that much of a cut from it.
The machines are commercial grade, depending on the amount of tenants they will have high wear and will cost to purchase $3000 each. Minimum of a set is 2 so $6000.
If you use a management company that deals in laundromat and repair, the capex is not there but you'll ave a monthly opex of about $50-100 that should include a guarantee and onsite tech. Per set.
It scales up pretty quickly because you can, maybe, push a one set onto 4 units.
--
But it's also a sign of cheaper locations and landlords to not have your own washer/dryer inside.
I used to do facilities maintenance for a hotel. We weren't space constrained in terms of laundry so we ran a fleet of cheapo consumer machines. One was down at any given time but it was still cheaper than introducing fewer high grade commercial machines. We had some commercial stuff that was ancient and still worked. Didn't break much less but it was easier to work on (primarily because age) when it did.
Obviously if you want to minimize downtime because you're an absentee landlord who has to pay a PM company to do a visit every time a lid sensor fucks off then having commercial machines makes sense. In terms of dollars per load the cheap consumer stuff is in fact cheaper, assuming you don't live in a regulatory capture hellscape where you are supposed to have a plumber connect your drains and gas lines (or are willing to ignore those rules).
Some buildings have switched (decades ago) to reloadable laundry cards to avoid having to deal with change.
I'm glad the cost of laundry isn't included in my rent, because I'd just be paying extra.
I think in CA, such charges are limited by the same laws as rent control, so at least they tend to be under-priced. At one I lived at (if SF's Tenderloin), it charged well below what nearby laundromats did per load ($1.25 vs much more for similar size).
https://www.wash.com/360-laundry-room-solution/
https://www.coinomatic.com/multi-housing-coin-laundry-soluti...
https://www.payrange.com/wp-content/uploads/2018/05/PR_Broch...
Only downside is the prices went up a quarter. It is convenient though.
Because they're a massive cash cow that people don't think about when comparing price of rent vs what you get.
[1] Pay someone to do your laundry by the pound.
It's a last resort, for sure, but we've already discussed it. As of right now, we're limited to one roll of each denomination ($17.50) by our bank, so the need may very well eventually arise, and that means that some of my collection might just end up as someone else's change.
Remember, the concept of supply and demand is still valid even for currency marked with an official denomination. You could think of that marking as the _minimum_ value of the currency, as guaranteed by the state.
I think everywhere else I've travelled, someone (or a machine) giving change will optimize it to the fewest coins. £3.85 would be £2, £1, 50p, 20p, 10p, 5p.
The only exception is something like a food stall that's set all their prices to multiples of €1 (I've seen this several times in Germany), they might keep plenty of €1 and €2 coins for change. If someone pays with smaller coins, they have no use for them and will give them as change.
Having lived in Japan, I was a big fan of larger denomination coins. In Japan, the smallest bill is worth about $10 USD, and they have coins worth about $1 and $5. Having a pocket full of change could actually get you something nice! I actually treated two of my friends to a night out at our local izakaya for ~$100 with 20 coins.
In an effort to promote the use of different coins and bills in the US, I would take all of the one dollar bills I accumulated over X amount of time, and I would buy $1 coins (Sacajaweas and Susan Bs) and $2 bills so that I could circulate them and try to get people accustomed to them.
I ran into three issueus:
1. Cashiers would give me the wrong change for the $2 bill. They usually treated it like a $1 bill, but at times I got change for a $20.
2. Cashiers would be mildly annoyed that there was not a slot in their register for $2 bills or $1 coins.
3. I actually had one subway worker (at the T in Cambridge) actually throw the coins back at me and yell at me and my friends that she wouldn’t take our “circus money” while pounding the plexiglass. We were all in business causal and (I hope) didn’t look like circus performers, so it was an odd reaction to say the least.
Anyway, I do all of my banking remotely now, so it’s harder to make exchanges like that, but I still do it sometimes.
I really wish my fellow Americans would embrace the use of larger coins and maybe even ditch the penny and maybe even the nickel.
They could make a $2 coin. It would fit in with other Western countries' highest-value circulating coins:
2 GBP = $2.53
2 AUD = $1.40
2 CAD = $1.47
20 DKK = $3.10
20 SEK = $2.20
20 NOK = $2.20
2 EUR = $2.29
50 CZK = $2.54
10 HKD = $1.29
2 NZD = $1.31
500JPY = $4.67
I would expect 50¢ and $1 coins to be especially popular with people running vending machines or other machines giving change. 50¢ coins means refilling it less frequently, and encouraging $1 coins means less trouble recognizing paper money.
I wondered how the coin mechanisms on pool tables work in the USA, since nowadays it's probably not unusual for the price to be more than $1 or $1.50 (depending whether the mechanism has 4 or 6 slots). In Europe they just take whatever mixture of coins is appropriate, an image search suggests in the USA one must buy metal tokens to feed the machine.
I remember trying to feed about $6 in quarters into a payphone in the USA, when there was some issue with travel insurance and we had to make a call to Britain. We couldn't put them in fast enough. Eventually, the cheap motel let us use their normal phone.
(The first two are still in widespread use in the UK, although I haven't seen them much in Denmark or Sweden. Here, they're more likely to have replaced the coin slot with a contactless card reader.)
If you pay cash and don’t have the exact amount the total will be rounded up and the excess donated to a charity.
Same thing happens if coin operated machines with bill accepters don't have coins to make change. It might not be obvious, but the coins inserted into most machines aren't directly dispensable as change, so if it runs out of change, it won't be able to make change until the operator comes to service it, which might be longer intervals these days.
It sounds like the coin requests from banks to the federal reserve can't all be filled, and the federal reserve is rationing coins until that changes. I suspect some of the usually net coin receiving businesses aren't open, or aren't receiving the same number of coins, making it harder for the net coin giving businesses to get the supplies they need.
Usually, on a per week basis, we do one change order of at least over $100. Over $100 vs $17.50... The difference adds up rather quick, even if you do a run every other day (not quite sure how frequent change orders can be before they limit that too, though).
I work in a niche industry that enables stores to order coin from banks. The issue is that stores can't get coins from banks because the banks don't have them either. Banks order coins (and notes) from the Federal Reserve. The Federal Reserve is shorting the shipment of coins to all major banks.
So, when a store like Target orders coin from its bank, they may order $500 in pennies. The bank then may ship them no pennies or a fraction of the order, depending on the bank vault the coin is coming from, what inventory they have, and formulas in place.
Look for this issue to go on through at least Christmas.
Saw one sign offering coin redemption (I guess in one of those machines) for no fee.
In the US, it's not uncommon to see places only take credit for purchases over $20, especially restaurants.
And yes I used credit as a shorthand for debit/credit.
Plenty of places in Europe don't accept AmEx, it still has high fees.
It's true that Germans prefer cash, but that's not necessarily because of the cost of processing cards. Most supermarkets accept cards, but the average German uses a card slightly more than once a week.
https://www.euro-area-statistics.org/classic/payment-statist...
This must be semi-regional because it's definitely not the case in the Minneapolis area (or the Midwest in general as far as I've seen). Even mom and pop restaurants will gladly take your credit card. If it exists at all, the minimum I've seen is $5, I've never seen a $20 minimum (not saying it doesn't exist, but it's definitely not "common"). Of course, the US is a huge place, so it definitely could be a regional thing.
But the article talks about closing businesses, and those coins leaving circulation until those processes work through.
The numbers are kind of all over the place depending on the source, and I'd imagine the ~40 million people on unemployment would be holding on to hard currency pretty tightly too.
On the one hand, it's a pattern that's played out over and over again this year. Toilet Paper. Paper Towels. Meat. Canned goods. Flour. Even yeast.
On the other hand, the Fed is the sole agency in charge of US currency. It swears up and down that there is plenty of physical currency to satisfy all needs. And it can't deliver on the simple promise of supplying coins.
Trouble ahead.
Thankfully Loomis dropped a bunch off at my condo’s property management office. Most places told me they were only accepting new coins from the cash delivery companies due to COVID.
Everyone uses cash for some transactions, mostly because it affords privacy.
Cash is also essential for grease/bribes.
Am I not bribing enough people? I've never had to.
The complication was that it was 1am, new year’s day (NYE night, an hour after midnight), on Union Square in NYC, and it was raining.
Not ideal conditions in the pre-Uber world.
Had I not had $400 in cash to flag down a limo(!) and dissuade him from his scheduled appointment, she would have spent the next 3 hours bleeding either on the subway or on foot as we walked back to Brooklyn.
Another time, I got stopped on the highway to the Cancun airport driving back from Tulum. The cop kept saying something about how he would have to write me a ticket, over and over again. Eventually it clicked, and I asked “is it okay if I just pay the fine here?”
Sometimes, cash saves the fuckin’ day.
Sure, cards are convenient, but you are in effect tipping 15% less for your own convenience.
Additionally, most of the big food delivery apps have a history of skimming or outright stealing in-app tips, so it’s best to always tip delivery drivers in cash, too.
Always tip in cash. It’s the only way to make sure they get all of it, without a portion being skimmed off to pay for bombs to mass murder Afghan kids.
It's not convenience, it's preventing fraud.
The actual risk of selling weed is far lower than the perceived risk of selling it.
Probably heavily skewed right now compared to normal. As of a week ago, my grocery store does not accept cash (at least at the self-serve lanes, which seem to take about 1/3 of customers) because they don't have the coins to make change.
[1] https://www.nytimes.com/roomfordebate/2012/04/04/bringing-do...
Tha article states that closure of bank premises is driving the shortage. You can get new coins at banks. You can't get coins from ATMs or grocery store cash-back.
2 weeks if you are really worried.
For most supply chains, adding a week of inventory would mean bringing on additional warehousing space and filling everything they have to the gills. I'm familiar with a factory who has a few hours of inventory on-site, and no more than ~3 days in the accompanying warehouse. They'd need about 2 more equal size warehouses to add a week of inventory.
You can't leave it for the next guy, because it's not a parking spot that's paid for. Instead, you pay to park a certain car in any spot in a larger parking zone.
You'd need a way to get money on the card, but that could be ATM deposits, presumably.
But in a regional coin shortage, someone with spare time might just choose to loot the coin machine, and gum up the internal coin economy. Banks are apparently offering an extra 5 percent on coins: https://www.kctv5.com/a-bank-is-paying-people-to-bring-in-th...
This does remind me of the stories a few years back about credit card churners buying coins from the us mint in bulk for the cash back, then depositing at the bank before the bills came due.
The other solution could be to get rid of cents all together.
This is what Vietnam has done and it is fantastic not having to deal with small metal change. Although, this created a new problem, they need to lose a few 0's. Being a dong millionaire (largest bill is 500k) means you've got about $45 in your pocket. Heh.
Though I think I would still prefer physical cash over digital cash even if it was just as ubiquitous.
“While there is an adequate overall amount of coins in the economy, the slowed pace of circulation has reduced available inventories in some areas of the country.”
Literally the second clause contradicts the claim of the first.
Some areas face a shortage because there is an oversupply in others, with a total supply that is adequate. Were they circulating more, the concentrations would presumably level out (or so the argument reads to me).