After more than two centuries, the American penny will be retired, closing a 238-year chapter in the nation’s monetary history. The final coin is set to be minted today at the US Mint in Philadelphia, marking the end of an era.
The final minting and reasons for retirement
The last penny will be produced under the supervision of Treasury Secretary Scott Bessent and Treasurer Brandon Beach, following a directive from President Donald Trump earlier this year to halt production. The decision stems from the rising cost of manufacturing the coin—nearly four cents per penny—making it more expensive to produce than its actual value. Once an essential part of everyday life, used for small purchases like gumballs, parking meters, or tolls, the penny has gradually become less relevant, often accumulating in coin jars, drawers, or “leave a penny/take a penny” trays.
The one-cent piece persisted for over 150 years longer than the half-penny, leaving only higher value coins like the nickel, dime, quarter, and the infrequently utilized half-dollar and dollar coins in active circulation. Even though its manufacturing has ceased, the penny will continue to be recognized as legal currency, thus maintaining its role in transactions should individuals choose to employ it.
Obstacles after the penny’s removal
Despite its expected discontinuation, this change has already presented difficulties for both vendors and shoppers. Numerous businesses are now compelled to adjust cash payments to the closest five-cent increment, frequently increasing the total by one or two cents. Other establishments are prompting patrons to provide one-cent coins to facilitate transactions. Nevertheless, in some jurisdictions, adjusting prices in this manner could lead to legal complications, rendering the transition more intricate than initially foreseen.
Ironically, while discontinuing the penny could save money, the potential need to produce more nickels—which cost more to mint than pennies—may offset these savings. Retailers and government agencies alike are navigating a period of uncertainty. According to Mark Weller, executive director of Americans for Common Cents, “By the time we reach Christmas, the problems will be more pronounced with retailers not having pennies.” Weller points out that countries like Canada, Australia, and Switzerland had structured plans when phasing out low-denomination coins, whereas the United States has issued only a brief announcement, leaving much of the practical adaptation to businesses themselves.
Rounding practices and their implications
Different businesses are experimenting with rounding strategies. Kwik Trip, a Midwest-based convenience store chain, has chosen to round down cash purchases where pennies are unavailable, aiming to avoid overcharging customers. This approach, however, carries a financial cost. With millions of cash transactions each year, the chain estimates that rounding could cost them several million dollars annually.
On a larger scale, the Federal Reserve Bank of Richmond projects that rounding financial exchanges to the nearest five cents could impose an annual burden of approximately $6 million on American consumers—equating to roughly five cents per household. Although this amount is relatively small, universal implementation of rounding across the nation is not feasible due to varied state laws. Jurisdictions including Delaware, Connecticut, Michigan, and Oregon, alongside municipalities like New York, Philadelphia, and Washington, D.C., mandate exact change for specific types of transactions. Furthermore, federal initiatives such as SNAP necessitate precise pricing to guarantee equitable treatment for recipients utilizing debit cards. Businesses that round down cash transactions in these situations might encounter legal repercussions or fines.
Industry groups, including the National Association of Convenience Stores (NACS), have urged Congress to enact legislation that clarifies and facilitates rounding practices. Jeff Lenard, a NACS spokesperson, emphasized, “We desperately need legislation that allows rounding so retailers can make change for these customers.” Until such policies are implemented, the retirement of the penny introduces operational and legal uncertainty for many businesses.
A coin with a rich past
The penny has a rich legacy, first minted in 1787, six years before the establishment of the United States Mint. Benjamin Franklin is widely credited with designing the Fugio cent, the nation’s first penny. Its current design, featuring Abraham Lincoln, debuted in 1909 to commemorate the centennial of Lincoln’s birth, becoming the first U.S. coin to depict a president.
Over time, however, the penny has seen a steady decline in practical use and cultural significance. The Treasury Department estimates that approximately 114 billion pennies remain in circulation, yet many are underutilized, tucked away in jars or collected as keepsakes rather than used in transactions. Public reaction to the coin’s discontinuation has been muted, reflecting its diminished role in everyday commerce.
Despite its fading relevance, the penny carries sentimental value for many Americans. Joe Ditler, a 74-year-old writer from Colorado, recalls using pennies for amusement park machines or flattening them on railroad tracks as a child. Now, he primarily uses them sparingly for cash transactions or adds them to tip jars. He reflects, “They bring back memories that have stayed with me all my life. The penny has had a wonderful life. But it’s probably time for it to go away.”
Heritage and societal influence
The retirement of the penny marks more than just the end of a physical coin—it represents a shift in how Americans interact with money. What was once a practical tool for small purchases has become largely symbolic, embedded in family traditions, historical memory, and American culture. Collectors and enthusiasts are likely to preserve the final minted coins, ensuring that the penny’s legacy endures in some form, even as it exits everyday circulation.
While challenges remain for businesses and consumers adapting to its absence, the phase-out is also a reflection of broader economic realities. Rising production costs, changing consumer habits, and the prevalence of digital payments have collectively diminished the necessity of the one-cent coin. As society transitions toward a more digital and rounded approach to cash transactions, the penny’s symbolic role may outlive its practical utility.
The discontinuation of the American penny marks the end of a significant era in the country’s financial narrative. Its 238-year existence, spanning from Benjamin Franklin’s Fugio cent to the well-known Lincoln penny, underscores the progression of U.S. currency and the evolving relationship Americans have with their money. Although its functional utility may cease, the penny’s legacy—its cultural and historical importance—will endure as a permanent reminder of a past age.
