The gradual phase-out of penny production in the United States is prompting fast-food chains to adjust pricing strategies. As the government prepares to halt minting new one-cent coins, companies like McDonald’s and Wendy’s are rounding cash payments to the nearest five cents, effectively changing how customers experience transactions.
The transition away from pennies comes as a response to a growing shortage of the coins. A representative from McDonald’s stated that certain locations are already experiencing difficulties acquiring sufficient pennies. In this context, the company is implementing a policy to round cash payments either up or down, depending on whether customers have exact change. “This is an issue affecting all retailers across the country, and we will continue to work with the federal government to obtain guidance on this matter going forward,” the representative added.
Wendy’s has also adopted a similar approach, advising franchisees to round cash transactions down to the nearest nickel until the government sets a clear industry standard. The company noted that franchisees retain control over their pricing, resulting in potential variations across different restaurants.
Go To Foods, the parent company of popular brands such as Auntie Anne’s and Cinnabon, echoed this recommendation. In a statement, the company emphasized the importance of rounding cash transactions in favor of the customer, stating, “This ensures trust and consistency while minimizing disruption.” Importantly, both McDonald’s and Wendy’s affirmed that cashless transactions would remain unaffected by these changes.
The decision to phase out pennies stems from financial considerations. President Donald Trump announced in February 2023 that the US Treasury would cease production of new pennies by 2026. Each penny costs approximately $0.03 to produce, according to a report by the US Mint. The report indicated a more than 20% rise in production costs during the previous year. The elimination of the penny is projected to save the US Mint approximately $56 million annually in materials costs.
Concerns regarding the lack of pennies have prompted calls for clearer guidance from the federal government. Dylan Jeon, a senior director of government relations at the National Retail Federation, stated in an October 29, 2023, release that retailers require direction to mitigate legal risks associated with implementing necessary changes. “Without preemptive federal guidance, retailers and other cash-accepting businesses are exposed to legal risks simply for implementing necessary practices in response to the nationwide penny shortage,” Jeon remarked.
The movement away from the penny is not unique to the United States. Countries like Canada and Sweden have already eliminated their one-cent coins, and there has been bipartisan support among American politicians for a similar transition in the US.
As fast-food chains adapt to these changes, their strategies reflect a broader economic shift, highlighting the practical implications of currency production and usage. With these adjustments, companies aim to maintain customer satisfaction while navigating the complexities of a cash-based economy increasingly moving beyond the penny.
