Is the Penny No Longer Lucky؟ America Says Goodbye to the Penny
Many retailers are rounding cash purchases to the nearest five cents.
Shanti
8/28/20263 min read
Is the Penny No Longer Lucky؟ America Says Goodbye to the Penny
Production of the one-cent coin, commonly known as the penny, has ended in the United States after more than two centuries. This change may not seem very important at first, but it is gradually changing how payments are handled in stores.
Many retailers are rounding cash purchases to the nearest five cents. At the same time, some businesses charge an additional fee for credit card payments. As a result, the final amount you pay may depend on your payment method.
Why Did Penny Production End?
The last penny intended for general circulation was produced at the Philadelphia Mint in November 2025. One of the main reasons for ending production was the high cost of making the coin.
According to the U.S. Mint, the cost of producing each penny increased from approximately 1.42 cents a decade ago to about 3.69 cents. In other words, producing one penny cost nearly four times its face value.
However, pennies have not disappeared. Hundreds of billions of one-cent coins remain in circulation and are still considered legal tender. Consumers may continue using existing pennies, and businesses may continue accepting them.
How Does Cash Rounding Work?
When a business does not have enough pennies to provide exact change, it may round the final cash total to the nearest five cents.
The recommended method works as follows:
• Amounts ending in 1, 2, 6, or 7 cents are rounded down.
• Amounts ending in 3, 4, 8, or 9 cents are rounded up.
• Amounts ending in 0 or 5 cents remain unchanged.
For example:
• $12.01 becomes $12.00.
• $12.04 becomes $12.05.
• $12.06 becomes $12.05.
• $12.09 becomes $12.10.
Rounding should apply only to the final total after taxes, discounts, and other charges have been calculated. Individual item prices should not be rounded.
Are Card Payments Also Rounded?
No. Payments made by credit card, debit card, check, gift card, or digital wallet will continue to be processed to the exact cent.
However, card payments may come with a different issue: credit card surcharges.
The Growing Use of Credit Card Surcharges
Since 2013, Visa and Mastercard have allowed businesses to charge customers an additional fee for credit card payments under certain conditions.
Businesses use these fees to offset the processing charges they pay to card networks and banks. The average processing fee was approximately 2.35 percent of a purchase in 2024, compared with about 2.02 percent in 2010.
Customers may therefore face an additional charge of approximately 2 to 3 percent when paying by credit card. Rules governing these fees vary by state, and businesses are generally required to notify customers about the surcharge before payment.
It is also important to know that, under card network rules, surcharges generally should not be applied to debit card transactions, even if the customer selects the Credit option at checkout.
Is It Cheaper to Pay With Cash or a Card?
The answer depends on the store’s payment policy.
If a business charges a 3 percent credit card surcharge, paying a cash total that is rounded by only a few cents will usually be less expensive. For example, a 3 percent surcharge on a $100 purchase adds $3, while cash rounding changes the total by no more than a few cents.
If the business does not charge a credit card surcharge, paying by card may be more beneficial, especially if the card offers cash back, travel rewards, or protection against unauthorized transactions.
Before paying, consider the following questions:
• Does the business charge an additional fee for credit card payments?
• Does it offer a discount for paying with cash?
• Is the surcharge greater than the value of the card’s points or cash back?
• Will the cash total be rounded up or down?
Will Rounding Increase Prices?
A customer may pay two cents more or two cents less on an individual purchase.
In a fair system, however, totals should be rounded down about as often as they are rounded up. For this reason, the overall effect on consumer costs is expected to be very limited.
Nevertheless, people who rely heavily on cash, including those who do not have bank accounts or payment cards, are likely to notice the change more than other consumers.
The New Rules Are Still Taking Shape
States are developing different laws and policies for cash rounding. At the federal level, lawmakers have also introduced a bipartisan proposal called the Common Cents Act. It would allow businesses to round cash totals to the nearest five cents when exact change is unavailable. Until a consistent nationwide policy takes effect, rounding practices and legal requirements may continue to vary among businesses and from one state to another.
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