As the second half of this unprecedented year began, retailers were finally finding their footing. They were back in stock with items that had been in demand at the beginning of the pandemic. Employees were set up with personal protective equipment, plexiglass barriers and disinfectants. Things were settling down a bit. Many retailers felt they could finally move out of crisis mode.

And then they realized they were running out of coins.

Many retailers asked customers to round up and donate what would have been coins in their pocket to a charity.

More than any other industry, convenience stores have felt the effects of the national coin shortage. C-store purchases often are smaller rings, which in turn leads to many cash payments—about 40% of in-store purchases, according to NACS State of the Industry data. But when a customer buys a candy bar for $1.49 and the employee at the register doesn’t have 51 cents to hand back to her, then what?

The coin shortage is yet another consequence of the pandemic that no one saw coming, and it has been fed by many factors. Many banks closed or limited services at the height of the crisis, and the U.S. Mint cut staffing and slowed production of coins. People severely curtailed their driving, so they weren’t throwing change into toll booth bins or feeding parking meters. An increase in online orders for food and countless other items meant people were using credit cards more often. Some operators stopped accepting cash altogether.

Because many banks simply didn’t have enough coins on hand, they limited the amount retailers could pick up. And so, many retailers found themselves earlier this summer with a severe lack of quarters, dimes, nickels and pennies.

A June 30 release from the Federal Reserve laid out the situation: “While there is adequate coin in the economy, the slowed pace of circulation has meant that sufficient quantities of coin are not readily available where needed.” In response, NACS organized two joint association letters to the Federal Reserve and the Department of Treasury urging them to work swiftly to resolve the crisis and to launch a public awareness campaign to encourage Americans to use and redeem their coins.

In the meantime, the convenience industry isn't waiting for others to fix the problem. By asking customers to help replenish their stores’ change, calling for donations and even working with other operators to find coins, retailers have risen to yet another challenge during these turbulent times.

Buddy, Can You Spare …

Across the industry, as coins began staying on people’s dressers or in unused wallets, retailers began asking customers to pay with exact change, a credit or debit card or mobile app. Many retailers asked customers to round up and donate what would have been coins in their pocket to a charity.

Tulsa, Oklahoma-based QuikTrip, which has 820 stores in 11 states, offered customers multiple options. It put up signs informing customers about the coin shortage. It asked customers to pay with exact change or use a debit or credit card. If they paid with cash and had change coming back, they could put the remaining balance on a gift card or have a barcode printed on their receipt that applied the change to a future purchase. Or they could round up their transaction and donate the balance to Folds of Honor. QuikTrip also asked customers to bring in extra change in exchange for bills.

Mike Thornbrugh, manager of public and government affairs for QuikTrip, said customers have “really reacted and have been helpful.

Nobody foresaw the possibility of [the coin shortage], but this is one of those things that if everybody works together, we can solve it.

“Nobody foresaw the possibility of [the coin shortage],” Thornbrugh said. “But this is one of those things that if everybody works together, we can solve it. I’m amazed by the amount of people coming in with coins that are helping out.”

Some chains went to their employees first in asking for coins. Diane McCarty, president of Douglass Distributing Retail Co., Sherman, Texas, sent an email with this request: “If you’re ready to break your piggy bank, Lone Star would be happy to turn your pennies, nickels, dimes and quarters into cold, hard cash.”

McCarty, whose company runs 23 Lone Star Food Stores, said employees also asked customers to exchange their coins, whether loose or rolled, for bills. “Everybody knows about [the coin shortage] and has heard about it,” McCarty said, so her customers weren’t surprised when they were asked to pay with exact change or a credit card. And anecdotally, she said, people in her stores’ area seem to keep a lot of coins in their homes or on hand, so it wasn’t as severe of a problem for Lone Star.

“We’re faring fine so far,” McCarty said.

Rolling Along

Convenience stores being deemed an essential business at the onset of the pandemic has been a boon for some operators. Kent Couch, owner of the Stop and Go Mini Mart in Bend, Oregon, which also has a Growler Guys beer concept, said his sales have “skyrocketed.” They’re up more than 34%, he said. That’s great—though it would help to have enough cash on hand to give customers change.

As many other retailers have done, Couch encouraged customers to pay with a credit or debit card. “Never in my history did I ever want a customer to use a credit card,” he said. For small businesses especially, credit card swipe fees are a formidable expense. NACS CSX data indicate that credit card fees rose more than 6% in 2019 to $9,383 per store per month. And year to date, industry credit card fees are about even with profits, according to NACS. Convenience retailers paid an estimated $11.8 billion in card fees in 2019, according to NACS State of the Industry data. Card fees are the second largest direct store operating expense for a retailer following employee wages.

So Couch made a bold move, posting this on Facebook: “We will pay you $1.05 for every $1 of ROLLED coins you bring us. We need everything you got! Make money with money!” He posted signs in the store, too. Some customers did take advantage of the offer. The largest amount of coins brought in was $460, he said.

Couch also began asking customers to round up their purchases to the nearest dollar and donate the balance to Habitat for Humanity. About one-third of customers did it. “We don’t like asking people to round up,” he said.

But that didn’t solve the problem. He asked for help from his vending partners and even the guy who handled the air machine for tires on his lot, although he declined to sell Couch any quarters. And Couch’s bank couldn’t supply him with the coins he needed. “I get $81 a week from [the bank] if I go every day,” he said. It wasn’t enough.

Help came from an unexpected source: a competitor. He’s able to buy coins through a neighboring convenience store that uses an armored-car service.

Although retailers have had to get creative in finding them, the coins are out there.

“It’s like a circulatory problem,” said Jeff Lenard, vice president of strategic industry initiatives, NACS. “You have enough blood—it’s just in the wrong spots.”