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 piece persisted for over 150 years longer than the half-penny, leaving only higher value coins like the nickel, dime, quarter, and the infrequently utilized half-dollar and dollar coins in active circulation. Even though its manufacturing has ceased, the penny will continue to be recognized as legal currency, thus maintaining its role in transactions should individuals choose to employ it.
Challenges following the penny’s exit
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 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 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 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 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 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.
