Helping Navigate the Penny Phase-Out

January 21, 2026

As of early 2026, the United States is no longer producing new pennies. This change follows a 2025 decision by the U.S. Department of Treasury to stop minting the one-cent coin after concluding that it is more expensive to make a penny than its face value. Cape Cod 5 is dedicated to helping both consumer and business clients understand what this shift means and how to prepare. Below is a straightforward guide to the key facts, practical steps you can take now, and resources to help you through the transition.
 

What You Need to Know

Why the Penny Phase-out is Happening

• The penny now costs about 3.7 cents to produce, meaning the U.S. Mint loses money on every penny it makes.
• Production of new pennies will cease once the current stock of blanks is used (expected early 2026).
• The decision reflects broader efforts to improve fiscal efficiency and adapt to a payments landscape increasingly dominated by digital methods.

What's Changing - and What Isn't

• Pennies remain legal tender: You can continue to use them in cash transactions and deposit them at banks.
• Banks and businesses may run low on pennies: Inventory is declining, and some coin distribution centers are already limiting supplies.
  • Cape Cod 5 will fulfill penny orders as supply allows, although we are no longer able to order from our own supplier.
• Electronic payments are unaffected: Card, mobile, or check transactions will continue to settle to the exact cent.

How this Affects You - Practical Guidance

For Businesses 

Prepare for cash rounding changes

• As pennies become scarce, many businesses will round cash totals to the nearest five cents.
  • Example: $10.02 - $10.00 | $10.03 - $10.05.
• The recommended rounding approach is:
  • Round down when totals end in 1,2,6, or 7 cents
  • Round up when totals end in 3,4,8 or 9 cents
• Encourage clear signage and communication with customers about how cash rounding works.

Check state and local rules

Some jurisdictions have specific requirements around rounding, pricing and cash acceptance. Businesses should confirm compliance with applicable laws.

Review POS and cash-handling systems

• Consider programming point-of-sale systems to automatically round cash amounts fairly and consistently.

Encourage customers toward electronic payments

• Promote contactless, debit/credit and mobile payment options to reduce reliance on cash change and speed up checkout.

Tip: Cape Cod 5 offers Merchant Services to help you get set up to accept digital payments. For consumers, many banks (including Cape Cod 5) offer instant debit card issuance at account opening to help support electronic payments.

For Consumers

Use electronic payments when you can

• Payments made by debit card, credit card, mobile wallet or check are not rounded and will remain exact.

Set up direct deposit

• Direct deposit helps avoid any cash rounding issues when receiving paychecks or other electronic credits. You can find out how to set up direct deposit at Cape Cod 5 here.

Spend or deposit pennies sooner rather than later

• While pennies remain legal tender, their availability is decreasing. Depositing them now ensures they stay in circulation where they're needed.