CORPUS CHRISTI, Texas — The U.S. Mint is already slowing down the issuance of pennies, according to Dr. Patrick Crowley, a professor of economics at Texas A&M University-Corpus Christi. This gradual discontinuation is creating what economists are calling a "round-up tax" that could impact shoppers' wallets.
"Already economists are calling this the 'round-up tax,'" Dr. Crowley said.
The phase-out comes down to simple economics. According to the U.S. Mint's annual report from FY2024, it costs 3.69 cents to make and distribute one penny.
"This has caused the U.S. Treasury to not make money. In fact, to lose money," Dr. Crowley said.
That loss amounted to $85.3 million in FY24, making the penny an expensive coin to maintain.
To test the current state of penny availability, KRIS6 News visited three McDonald's locations in Corpus Christi, purchasing apple pies that cost $1.94 each. While KRIS6 did receive pennies back at all locations, employees seemed uncertain about the policy.
In a statement, McDonald's told KRIS6 News that following the discontinuation of pennies nationwide, some McDonald's locations may not be able to provide exact change, calling it "an issue affecting all retailers."
McDonald's full statement:
"Following the discontinuation of pennies nationwide, some McDonald’s locations may not be able to provide exact change. We have a team actively working on long-term solutions to keep things simple and fair for customers. This is an issue affecting all retailers across the country, and we will continue to work with the federal government to obtain guidance on this matter going forward.”
- McDonald's locations in certain pockets of the country are experiencing penny shortages and may round up or down to the nearest 5 cents if a customer does not have exact change.
- To be clear, this would not impact card payments or other cashless options, which represent the majority of transactions here in the U.S.
- Restaurants may ask customers to use exact change or cashless payment options like credit/debit or the App, where they can unlock a variety of national and local deals.
- In countries where similar currency changes have taken place, local businesses have followed similar rounding practices.
Dr. Crowley explains that many other countries have already abolished coins like the penny, and the effect will be felt at checkout.
"The trouble is there's a lot of prices in the U.S. that are in the 8's and 9's. 9 is the most popular price in fact. Something beginning with 11.99 or 3.99. So there's going to be much more rounding up then there is rounding down," Crowley said.
While pennies were still available at the McDonald's locations KRIS6 News visited, questions remain about when this phase-out will become the norm and how soon other companies will follow suit.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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