Months after the U.S. Mint pressed the last of the country’s 1-cent coins, some states have started moving to set rules for how cash purchases should be handled when exact change is no longer practical.
The problem stems in part from the end of penny production that President Donald Trump announced early last year, which he described as wasteful. The U.S. Mint said it cost 3.7 cents to make each 1-cent coin in 2024, and the shift contributed to a shortage of pennies in cash registers last summer, forcing consumers and businesses to navigate a cash system without reliable exact change.
The Treasury Department has said it will continue circulating the roughly 114 billion pennies that exist “for as long as possible,” and that pennies must still be accepted as payment. One solution described by state lawmakers and other officials is symmetrical rounding to the nearest nickel after taxes, a method intended to ensure that cash transactions land on amounts that end in 0 or 5 cents.
Under symmetrical rounding, if the final price after taxes ends in 1, 2, 6 or 7 cents, payment rounds down; for example, $1.91 or $1.92 becomes $1.90. If the price ends in 3, 4, 8 or 9 cents, payment rounds up; for example, $1.98 or $1.99 becomes $2.
At the federal level, a bill introduced last year in Congress and passed out of the House financial services committee would apply symmetrical rounding across the country. U.S. Rep. Lisa McClain, R-Mich., said in an email that the federal law is important to prevent a “confusing patchwork of state policies,” but the proposal has not yet been voted on in the House and would still need to move through the U.S. Senate before reaching Trump’s desk.
Meanwhile, bills dealing with penniless cash transactions have passed both chambers in several states and await governor signatures in Arizona, Florida, Oregon, Tennessee, Virginia and Washington. Some states are proposing to allow businesses to round cash purchases, while others are considering requiring it, according to the AP analysis.
Indiana is already dealing with that split. A bill signed into law this month by Republican Gov. Mike Braun requires businesses to round cash purchases for transactions that do not end in a zero or five, AP reported. Lawmakers later revised that provision in a second bill that would make rounding optional, and it would take effect Sunday if Braun signs it into law. In both versions, Indiana businesses can choose to always round up to the nearest nickel, always round down, or round up or down depending on the amount.
In Tennessee, legislation takes a different approach: symmetrical rounding is exempt from legal claims under the state consumer protection law but it does not require rounding. “It is to provide safe harbor for private businesses,” Republican Rep. Charlie Baum, the bill sponsor, said during floor debate.
AP reported that rounding bills have been introduced in about two dozen states since late last year, based on an analysis using the bill-tracking service Plural. Outside the legislative process, some state agencies have published guidance advising that rounding should happen after tax and that businesses must make sure the full taxed amount still goes to the state.
Whether rounding raises or lowers costs for consumers is also part of the debate. The Federal Reserve’s 2024 survey found that about 8 in 10 U.S. adults said they recently used cash, with cash use more common among older adults and lower-income households. The Treasury Department has written 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.” But researchers at the Federal Reserve Bank of Richmond used a 2023 survey to find that prices that don’t end in zero or five are especially likely to end in eight or nine, and said rounding could therefore shift money in a way that adds up across many transactions.
The AP story also points to how the rules feel to individual shoppers. Nikki Capozzo-Hennessy, 50, of Trumbull, Connecticut, posted her grocery store receipt online after noticing a rounding adjustment on a purchase of $8.73 with tax. She said the store chose to round down and that she gained three cents, adding that it might feel taxing if customers had to hand over extra pennies each time but that sticking with one rule is practical. “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,” Capozzo-Hennessy said, and she said her food truck business would likely use symmetrical rounding to stay consistent.
Washington state Rep. April Berg, who introduced a rounding bill there, said she understands people who feel frustrated losing a penny but that eliminating the hard currency leaves few alternatives. “We did make sure that everyone is allowed to pay exactly what they owe,” Berg said about her legislation.
A related issue is whether rounding increases demand for nickels. The Treasury says stopping penny production will save $56 million annually, but it also said rounding could increase demand for nickels. The 5-cent coins are costly to make, reaching nearly 14 cents each in 2024, according to the Mint. The proposed federal legislation includes a potential cost-saving solution that would allow the Treasury to adjust the coin’s composition to use cheaper zinc and nickel instead of copper and nickel.