Cash is no longer king at some Magic Valley businesses.
A national coin shortage stemming from the COVID-19 pandemic has led some stores to advise customers to have exact change or pay electronically.
“There is a national shortage of coin,” said John V. Evans Jr., president and chief executive officer at D.L. Evans Bank.
Amy Chiesa, owner of PC’s Wash & Go Laundromat in Burley, said the shortage has caused people to come into the business and put $40 to $60 in bills into the coin change machine, and leave without putting any of the coins back into the laundry machines.
“I had to put a sign on the machine but I’ve still had seven or eight people who did it anyway and you can’t really say anything because you don’t know if they are going to use the change for laundry,” she said. “You don’t know what they’re doing until they walk out.”
Quarters are essential for her business, and so far, she’s been able to keep the machines humming.
During the COVID-19 pandemic she has also noticed more people coming in to cash out their dimes, nickels and pennies, Chiesa said.
“They are breaking into their cash stashes to do laundry, which means people are hurting,” she said. “Because of COVID people need to stay clean, and they have to have money to wash their clothes.”
Chris Mahler, co-owner of Western Music based in Twin Falls said their business, which supplies dart boards, jukeboxes and pool tables to other Magic Valley businesses has not been affected by the shortage.
“The only thing we noticed was we weren’t getting the dollar coins that we used to but we had enough in reserve that it didn’t really affect us,” Mahler said.
Evans said the Federal Reserve has been limiting the coins the company could order every week, but the limitations are supposed to start to lift soon.
“It should be a temporary issue,” he said. In the meantime, people should use a debit or credit card for purchases and consider cashing in any coin stashes, and not hoard their change, which could help get the supply moving again.
Coins, he said, are also very dirty so part of the problem may be that people are not willing to touch them as much, keeping them out of circulation.
Evans said the Mint has beefed up production and coins are in the pipeline but will take some time to get fully circulating.
In early July, the Federal Reserve convened a group of industry leaders to form the U.S. Coin Taskforce to work together to identify, implement and promote actions to reduce the consequences and duration of COVID-19 related coin circulation disruptions, according to the Federal Reserve Bank Services website.
The FRBS says the primary issue with coins is the dramatic deceleration of circulation through the supply chain, and there appears to be an adequate amount of coins in the economy.
The circulation issue is nationwide.
The slowed pace means sufficient quantity of coins are not always readily available when needed. With retail shops, banks, transit authorities and laundromats closed, the typical places where coins enter society slowed or even stopped.
The supply chain includes many participants from the U.S. Mint to armored carriers, banks, retailers and consumers, which all have a role to play to help resolve the issue.
The Federal Reserve is working on many fronts, including the U.S. Mint to minimize supply constraints and maximize coin production capacity. The Reserve asks depository institutions to order only the coin they need to meet near-term customer demand and remove barriers to customer coin deposits.
The task force will complete its first set of recommendations by the end of July and the group will share its progress and evaluate the benefits of continuing the task force.
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