States weigh in on cash purchases without pennies

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Pennies effectively disappeared from the day-to-day cash ecosystem after the U.S. ended penny production, and a new policy fight is now shifting to state legislatures over how businesses should handle cash totals that do not end in clean, nickel-friendly amounts. Several states are pursuing “symmetrical rounding” guidance—rules that apply after taxes so that prices are rounded to the nearest nickel rather than requiring exact change.

The pressure for those rules traces to a timeline that began with President Donald Trump announcing early last year an end to penny production. The U.S. Mint has said it cost 3.7 cents to make each 1-cent coin in 2024, a step that the administration described as wasteful and that was followed by a shortage of pennies in cash registers last summer, according to the Associated Press.

The Treasury Department has said it will continue circulating the roughly 114 billion pennies that exist for “as long as possible,” and it has said pennies must still be accepted as payment. That combination—continued penny circulation without new production—has left merchants and shoppers to contend with situations in which exact change is harder to assemble, especially during periods when pennies run low.

One approach lawmakers and regulators are discussing is symmetrical rounding, which rounds cash payments after taxes to the nearest nickel in a consistent up-or-down pattern. Under the method described by the AP, if the final price ends in one, two, six or seven cents, cash rounds down—for example, $1.91 or $1.92 becomes $1.90. If the price ends in three, four, eight or nine cents, cash rounds up; the example in the report is that $1.98 or $1.99 becomes $2.

A federal bill would apply symmetrical rounding across the country. The AP reports that the bill, which was introduced last year and passed out of the House financial services committee, would set a uniform standard and that Rep. Lisa McClain, R-Mich., said in an email the federal law is important to prevent a “confusing patchwork of state policies.” The AP also said the bill has not yet been voted on by the full House and would still need approval in the Senate before it could reach Trump’s desk.

In the meantime, states are moving at different speeds and in different directions. Bills have passed both chambers and await governor action in Arizona, Florida, Oregon, Tennessee, Virginia and Washington, the AP reported, with some proposals allowing businesses to round and others considering making rounding required. In Indiana, the AP said a bill signed this month by Republican Gov. Mike Braun requires businesses to round cash purchases for transactions that do not end in a zero or five, and lawmakers then revised that requirement in a second bill that would make rounding optional if Braun signs it; the second bill would take effect Sunday if it becomes law.

The AP said the Indiana revisions would still allow businesses to choose their rounding approach within the new framework, including always rounding cash purchases up to the nearest nickel, always rounding down, or rounding up or down depending on the amount. In Tennessee, another bill would not require symmetrical rounding, but it would exempt the practice from legal claims under a state consumer protection law, providing a “safe harbor” for private businesses, according to the AP. Rep. Charlie Baum, the bill sponsor, told lawmakers during floor debate, “It is to provide safe harbor for private businesses,” as reported by the AP.

Beyond legislative text, some state agencies have issued guidelines aimed at standardizing how rounding should work, including that rounding should occur after tax and that businesses must ensure the full taxed amount still goes to the state. The AP also reported that rounding bills have been introduced in about two dozen states since late last year, based on an AP analysis using the bill-tracking service Plural.

Whether rounding changes what consumers pay is also part of the debate. The report noted that cash is less common than it once was, but it cited a 2024 Federal Reserve survey finding that about 8 in 10 U.S. adults said they recently used cash, with higher use among older adults and in lower-income households. The Treasury wrote online that prices would be “rounded down just as often as they will be rounded up, so there should be no overall effect on consumer prices,” the AP reported, while researchers at the Federal Reserve Bank of Richmond used a 2023 survey to argue that prices not ending in zero or five were especially likely to end in eight or nine, which they said could shift totals so that businesses gain more than consumers collectively, amounting to “a few pennies” lost per person.

Consumers’ perceptions of fairness are also feeding the momentum behind and around these bills. The AP reported that some people posted online saying they felt “scammed,” even when the difference involved only a penny or two. Nikki Capozzo-Hennessy, 50, of Trumbull, Connecticut, posted a grocery receipt showing a rounding adjustment on an $8.73 purchase with tax; the store rounded down and she said she gained three cents, according to the AP. Capozzo-Hennessy told the AP she pays in cash because it makes her more conscious of spending, and she said, “At the end of the day it’s three cents, but I can imagine with all the purchases that you make, it can add up.”

In Washington, the AP said state Rep. April Berg—who introduced a rounding bill there—said she understands frustration over losing a penny but also argued that with pennies no longer produced, there are few practical alternatives. Berg said of her legislation, “We did make sure that everyone is allowed to pay exactly what they owe,” as reported by the AP.

Finally, the policy questions extend beyond rounding mechanics to the costs of the coins that will be relied on more heavily. The AP reported that the Treasury says ending penny production will save $56 million annually, but that rounding could increase demand for nickels, which it said cost nearly 14 cents each to make in 2024, citing the Mint. The federal legislation under discussion, the AP said, includes a potential cost-saving option that would allow the Treasury to adjust the coin’s composition to use cheaper zinc and nickel instead of copper and nickel.