ennies are so 2025. Penny production, that is. The US Mint struck its last batch of pennies on November 12, 2025, ending a 233-year tradition. The reason: over the past ten years, the price of producing a 1-cent coin had risen from 1.3 cents per penny to about 3.69 cents, the US Mint says. The mint expects to save around $56 million per year in reduced material expenses from stopping production.
“Given the increasing number of non-cash transactions and the very low purchasing power of a single penny, the Department of the Treasury does not believe continued production is fiscally responsible or necessary to meet the needs of commerce in the United States,” the US Department of the Treasury wrote in a frequently asked questions page about penny production cessation.
Although new pennies are no longer rolling out of presses, the 1-cent piece is still legal tender and still in circulation. It may be a little more difficult for businesses to purchase them to fill coin trays, but several Alaska business owners aren’t spending much time fretting over the availability of the nation’s smallest legal tender.
“When the announcement went out that pennies would no longer be minted, there was a flurry of member demand for pennies,” says Mickel. “We placed a one-time order for $600 in pennies last fall, which brought our total penny inventory across the credit union to just over $1,100. Since then, sentiment seems to have shifted. Members are now bringing pennies back in, and today we actually have more pennies than we did at this same time last year.”
Last year, she says, the credit union had about $602 worth of pennies across all its vaults. The credit union has never had to place penny orders, she notes, because the supply and demand remained about even—pennies were simply circulated among members and branches. Now, if anything, the credit union is penny wealthy.
“Today, even after that one-time purchase, we’re holding more than $1,600 in pennies across the credit union,” Mickel says.
Buffy Meyer, who owns Fish On! Camp Grill food truck, says many locations where she operates use vouchers, which don’t require any money to change hands, unless people not attending the event stop by for a bite—which Meyer always welcomes.
Meyer and her crew do run their grill at the Alaska State Fair, however, and there, money changes hands many ways. There are a lot more cash transactions and, in part due to the City of Palmer’s 4 percent sales tax, pennies are much more in use during the fair.
Meyer says she prepares all year for the event by tossing any change she accumulates into a jar.
“We keep a change jar so when we pay cash for anything through the year… we throw our change in the car or a jar at the side of the bed, then we bring it out at fair time, and we use it all up. By the end of the fair, we don’t have any more, but we round up, so [customers] end up getting more change back,” Meyer says.
Mickel says she’s seen a couple businesses in Southeast move to cashless payment. That means paying a percentage to credit card companies, but it avoids having to deal with coins altogether.
Troy McGlashan operates Aethereal Coffee, a Palmer-based organic fair-trade coffee roaster that often has a table at community events. He says Aethereal’s pricing structure, with half-dollar and full-dollar amounts, makes it easier to avoid the penny problem, but prices are primarily set that way so he doesn’t have to lug around change, which can be annoying.
His last name is fortuitous only; he bears no known relation to the global chain’s founding brothers, Richard and Maurice McDonald, but he has worked in McDonald’s restaurants for years, starting in Fairbanks as a crew member at the Airport Way McDonald’s and transitioning to the corporate side of the company from there.
McDonald says his bank let him know several months ago he would no longer be able to purchase pennies.
“We’ve been out about two months [on the Kenai Peninsula] and, in Southeast, about thirty days,” McDonald said in May.
He clarifies that his restaurants still accept pennies as payment, but cashiers don’t return them as change, instead rounding to the nearest nickel, as recommended by the US Department of the Treasury. Those guidelines, which come from a November 2025 report from the National Council of State Legislators, are as follows: “If the final digit of the total transaction amount (including taxes) is 1, 2, 6, or 7 cents, the amount is rounded down to the nearest multiple of five. If the final digit is 3, 4, 8, or 9 cents, the amount is rounded up. Transactions totaling exactly $0.01 or $0.02 might be rounded up to $0.05.”
Robert Machado | Adobe Stock
McDonald says the company uses coin changers to give change at its kiosk ordering stations. The coin dispensers stop working if they run out of, say, quarters or nickels, and they won’t work until that denomination is refilled. His crew had to reprogram the dispensers to think they’re full of pennies even if they’re not, he says. Likewise, the point-of-sale machines at the counter had to be reprogrammed with the round-up and round-down rules.
He says the rounding tends to even out—one customer might get a penny or two more than they’re owed, but the next customer might get a penny or two less.
“The Treasury projects that it’s a net zero of what the business and the consumer experience,” he says.
More importantly, he says, he’s not getting pushback from customers. “I think people are just accepting the fact that pennies are going away and that is just how it’s going to be,” McDonald says.
“Because it’s by the pound, it doesn’t matter. We’ll still owe cents,” she says.
Smith says her bank has limited the amount of pennies she can buy to $5 worth per week, which is more than enough for the store; she goes through perhaps five to seven dollars’ worth of pennies every two weeks. For now, that means she can keep doing business as usual. She adds that most customers use credit cards, so it doesn’t matter what number comes after the decimal point.
“We’re a small enough operation where it’s not really affecting us yet,” Smith says. “The pennies—when we’re forced to do it, we’ll do it.”
Tongass Federal Credit Union’s Mickel notes that Alaska tends to lag other states when it comes to economic trends. However, the influx of summer tourists might drive adjustments to the mechanics of providing change.
“When I talk to my management team about how the branches are feeling or the input they’ve gotten, no one’s worried about it at this point,” Mickel says. “Once [pennies] start becoming more scarce, it’s going to happen really fast. Right now, we’re just seeing business as usual.”
There are about 25,000 Coinstar machines around the globe, and more than 19,000 of those are in the United States, often co-located at supermarkets. There’s at least one kiosk in all fifty states; more than thirty kiosks are operating in Alaska. Coinstar machines across eight countries collect about $3 billion a year in coins, says company CEO Kevin McColly. In a year’s time, Coinstar machines count about 13.5 billion pennies.
Fewer banks want to take in coins today than thirty years ago, so Coinstar fills a gap by exchanging coins for cash. Here’s how it works: a customer dumps a jar of coins into a machine, where it’s automatically sorted and counted. The customer can choose from several conversion options: give the counted change as a donation to charities, such as American Red Cross or Make-A-Wish Foundation of America (the charities offered vary by location); get cash for the change, minus a processing fee; exchange the coins for eGift cards with no processing fee; add it to a prepaid debit card; or use the cash to buy one of several cryptocurrencies.
It’s only been a few months since penny production ceased, so it’s difficult to point to a clear trend, McColly says, but the company’s machines are taking in slightly fewer pennies than they had by this time last year.
The average jar of coins adds up to about $60, McColly says. His numbers show Coinstar is seeing about forty fewer pennies in the average jar than a year ago.
“It’s not like, ‘blow you away,’ but there is a little bit of a change, for sure,” he says.
Asked how he expects that to change in the future, McColly says it’s hard to say. Coinstar has operated machines in other countries where small-denomination coins have been phased out: Canada, where penny production ceased in 2012, and Ireland, which ceased production of the one-cent Euro coin in 2015.
“It was a well-thought-out plan of how they’re going to do it and what’s the timeline,” McColly says. “That didn’t happen here.”
Why does it matter? Coinstar’s coins don’t go into a vault; they are separated, re-counted, and returned to circulation, mostly in the same communities where they were collected. Banks buy those coins, and so does the Federal Reserve—between 40 and 50 percent of the coins deposited by Coinstar go back to the Federal Reserve, which then recirculates them.
The decision to stop taking deposits of pennies has since been lifted in some markets, McColly says, but it’s an example of the hiccups that happened because there was so little discussion or guidance around ceasing penny production. Legislation had been introduced in the US Congress as recently as 2017 to phase out pennies, but ultimately it was done in February 2025 by President Donald Trump directing the Department of the Treasury to set the amount of new pennies to zero.
Some people seem confused about whether pennies are still legal tender—they are—and some businesses have stopped accepting them, even though not accepting them might be illegal in some areas. A larger issue is, without federal guidelines, there is confusion about how to fairly give change. If guidelines vary from state to state, it becomes problematic for companies that work in numerous states.
The Common Cents Act, US House Resolution 3074, was introduced in April 2025 to address some of those concerns, including setting out guidelines for when to round up or down (they mirror the National Council of State Legislators guidelines). Although it was discussed at two House Financial Services committee meetings, the bill hasn’t moved since September 2025.
McColly says he wishes the bill was more comprehensive, but it would solve a few issues. It also attempts to address another looming coin-cost problem: although the president cited the cost of production outweighing the value of the penny, the nickel poses an even greater seigniorage gap. A penny cost nearly four cents to produce, but a five-cent piece—currently made of 75 percent copper and 25 percent nickel—costs 13.78 cents to produce. The Common Cents legislation authorizes the US Mint to test and produce nickels made with nickel-plated zinc instead of nickel-plated copper. A reconstituted nickel would also provide an outlet for zinc that had made up 97.5 percent of post-1982 pennies.
Discontinuing those pennies has increased reliance on nickels, which contained more copper than the traditional red cent.
“I find it ironic that we’re saving money on the penny only to produce more nickels that are way more expensive,” McColly says.
One might call that penny wise and nickel foolish.