The penny is under attack, and its chances of survival are uncertain. In February 2025, President Trump ordered the U.S. Treasury to stop minting the little zinc and copper coins to save on costs. Congress has yet to approve his decision.
Though tiny in value, pennies are expensive to make. According to the 2024 United States Mint report, the 1-cent coin costs approximately 3.69 cents to produce, an increase of 20.2% from the previous year.
Though it may have been quite some time since you dug around in your wallet to pay for an item with pennies, you may worry about what taking them out of circulation can do on a macro and micro level. Here, experts weigh in.
The Impact Removing the Penny Can Have On the Economy
If the 1-cent coin is no longer used as legal tender, prices will likely adjust to accommodate the nearest 5-cent denomination, the nickel. Therefore, if an item is $3.99, odds are it will become $4; if it’s $3.01, it may be $3, and if it’s $3.04, it could be $3.05.
So what kind of effect might this have on the economy at large?
“There will be essentially no impact at all,” says Mark Schweitzer, associate professor of economics at Case Western Reserve University and former senior vice president at the Federal Reserve Bank of Cleveland. “That rounding process will result in no real change.”
But won’t it save money because the face value of this coin is far less than it costs to produce?
“From the government efficiency standpoint, there will be a small gain,” Schweitzer says.
“Pennies get caged up, so they have to be minted. They tend to get lost at high rates; people put them in a jar at home to get them out of their purses or pockets. We don’t really want them, but when they’re not in circulation, we have to produce more,” he adds.
However, halting penny manufacturing will result in more nickels needing to be produced, coins that are even more expensive to make. According to the United States Mint, one currently costs 13.78 cents to make.
Therefore, Schweitzer says, “Part of what the government would gain with losing the penny will be offset with losses in the increased number of nickels we would need.”
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Merchants May Benefit From the Penny Phaseout
Brick-and-mortar store owners and workers may celebrate the shift away from the penny, but Albert Williams, chair and associate professor in the finance and economics department of H. Wayne Huizenga College of Business & Entrepreneurship at Nova Southeastern University, warns of a potentially rough adjustment period in the beginning.
“After that, not having to deal with pennies will help merchants,” Williams says. “It will make everything more efficient.”
When people aren’t counting out single-cent coins, which can back up lines and frustrate other customers, and cashiers aren’t tasked with giving pennies as change, the checkout process will likely be faster.
The change can also hit the cash register itself. When the space previously set aside for pennies is empty, a different currency can take its place.
“Dollar coins may be more accessible,” Schweitzer says. “They cost more than a dollar bill to produce and are about the same size as a quarter, but they last much longer than a paper bill. There would be a cost savings to shift to the coin.”
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Consumer Reactions to Perceived Higher Prices
Because consumers will have a learning curve, it will be important for stores to communicate how they will round down or up prices.
“There has to be a protocol in place first for no quibbling,” Williams says. “There will be problems if we don’t have state-to-state, store-to-store guidelines. People are very sensitive about money, even with a few pennies. They want it to be exact.”
If people feel like they’re being cheated, it can cause strife at the register or anger against the store. Merchants must be prepared for emotional reactions, especially among customers who live paycheck to paycheck.
Another issue, Schweitzer says, is that small price hikes, even when they’re only a few cents, can spark inflation concerns. “This means people can get worried about what’s next.”
Realistically, though, a penny or two added to the cost of an item won’t make a difference in a consumer’s overall financial health. “Any change will be extremely marginal,” Schweitzer says. “This is not something to worry about.”
Douglas Mudd, curator and museum director at the American Numismatic Association, a nonprofit dedicated to studying and collecting coins, projects that Americans will adjust just fine after a short while without the penny.
“Canada gave up their 1-cent coin about a decade ago,” Mudd says. “It was an easy transition. With older currencies, the value starts to be overtaken by inflation. What was once a useful coin is reduced. Then the denomination doesn’t make any sense anymore.”
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Will the Penny Become a Collector’s Item?
Nothing is rare about the common penny, so the vast majority won’t rise in value soon.
“3.5 billion cent coins were made just last year,” says Mudd, who is responsible for the ANA’s Money Museum exhibition program. “Almost everyone has a bowlful of them at home. For collectors, there will be some nostalgia in having them, but that’s about it.”
Still, if production of the 2025 penny does stop this year, there will be far fewer of them with that date stamped on them. This can elevate their price on the secondary market.
For example, 2025 pennies are currently reselling for between 50 cents to a dollar on eBay. You may be able to get 2025 pennies from a bank or order them from the United States Mint at face value, though.
This is not to say that some pennies aren’t highly collectible. When they have special qualities, like mistakes in minting, they can be wildly expensive.
For example, in 2012, a 1943 penny produced at the San Francisco Mint sold for $1 million because it was erroneously made from bronze instead of zinc-coated steel.
Just don’t expect an ordinary penny from the 1990s in your pocket to have any more buying power than a single cent many years from now, Mudd says. With billions just like it floating around, it will be worth what it is today.
What to Do With All Those Pennies
If you want to unload your pennies and have them turned into other coins or paper money, the best place to take them is a bank since there will be no extra charge to convert them.
“You usually have about six months to a year to cash out of circulation coins at the bank,” Mudd says. “After that, who knows? A lot of random things go into these decisions.”
Although many supermarkets have kiosks where you can trade in your coins, the processing fees can be steep. Coinstar, for instance, charges a service fee of up to 12.9% + 99 cents per transaction, depending on the location.
A side benefit of bringing your coins in rather than having them build up is that it saves the government money. Schweitzer says that if they do go back into circulation, it eliminates the need to mint more.
What if you want to keep your pennies and do something creative with them? Go for it.
Federal law 18 U.S. Code § 331, makes it illegal to fraudulently alter, deface or mutilate U.S. coins, but they can be transformed into something else. There is no sanction against reforming coins, though. After all, penny-squishing machines that turn the coins into souvenir tokens are widely available in tourist spots nationwide.
“You can also make things out of pennies,” Williams says. “A bracelet, ornaments, artwork. You can convert the coins into something beautiful.”
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How the Disappearance of the Penny Could Impact Consumers’ Wallets originally appeared on usnews.com
