Coin Toss

When was the last time you used pennies to buy something? If you have a hard time remembering, you aren’t alone. Americans are more likely to stash the coins away than spend them, experts say.

Yet every year, the government shells out tens of millions of dollars to put billions of new pennies into circulation—until now. Starting in early 2026, the United States will stop penny production, eventually phasing out the coin entirely.

Why? It costs money to make money, and in the case of the penny, that price is higher than the coin’s value. Each 1-cent coin costs 3.7 cents to produce. That amount includes the cost of the metals (zinc coated with copper) and the labor for manufacturing and distributing the coins.

The U.S. Treasury says ending penny production will save the government at least $56 million a year. But will the change affect how we shop—and what we pay?

Still, most prices, such as $4.99 or $13.56, require cash purchasers to hand over pennies or get them as change. Will ending penny production force all prices to be rounded to the nearest 5 or 10?

Probably not for a long time, says Robert Whaples. He is an economist at Wake Forest University in North Carolina. In cashless transactions, people will still be able to pay exact amounts. As for cash payments, Whaples says, nothing will change until the number of pennies in circulation drops significantly.

“If people keep them in their jars at home and don’t bring them back to stores, eventually the stores will run out and start rounding prices to the nearest nickel,” he explains. “For example, a cash register total of $1.99 will be rounded up to $2, and a total of $2.01 will be rounded [down] to $2.”

Some people worry that this might cost shoppers more in the long run. Whaples, who has studied some 200,000 sales from a chain of convenience stores, disagrees. Based on his research, he says, the changes generally even out. “No one will see much of a difference. I found that rounding to the nearest nickel goes slightly in favor of buyers—but the amount is very small.”

Other nations, including Australia and Mexico, have gotten rid of their low denomination coins in recent decades without negative effects on consumers, some experts say.

Canada, for one, stopped minting its pennies in 2012. The change was relatively uneventful for shoppers, says Sarah Halpern-Meekin. She is a sociologist at the University of Wisconsin-Madison who studies how government policies affect low-income families. “There didn’t seem to be major problems or challenges.”

Not everyone supports ending penny production. Some people say that in the U.S., low-income families will be negatively affected. “Those households rely on coins and small denominations more than anyone else,” says Mark Weller. He is the executive director of Americans for Common Cents, a pro-penny organization.

Plus, penny advocates argue that the reason for eliminating the coin in the first place—to save the government money—may not pan out in the long run. If stores end up rounding prices to the nearest nickel, those coins could become more in demand, Weller says, requiring the government to make more of them.

And nickels cost even more to make than pennies. Every 5-cent coin costs 13.8 cents to produce, according to the Mint. Will the nickel be the next coin to go?