MONTGOMERY, Ala. (WSFA) - Coin circulation is something consumers rarely thought about prior to COVID-19.
Now, signs at retailers requesting customers pay with exact change or debit cards due to a coin shortage are becoming a cause for concern.
Scott Latham, president and CEO of the Alabama Banker’s Association, says there’s no reason to panic.
“It isn’t a coin shortage, it’s a coin re-circulation issue that we’re dealing with,” Latham stated.
According to the Federal Reserve, coin circulation dropped by half when comparing numbers from January and April. Latham says consumers are still using fewer coins.
“We believe as people get out and start using coins a little bit more, even in vending machines, laundromats and parking meters, and as people tend to turn loose of those coins, we’ll see that supply ease back up,” he explained.
The circulation issue is largely based on notable changes in consumer behavior. As customers used fewer coins, businesses requested less change from banks and in turn banks ordered a smaller supply from the Fed. As this pattern took shape, banks reported an increase in online banking. In some instances, banks in various regions of the state had trouble meeting the demand for coins at various times.
“Banks are getting the message out saying hey, if you’ve got extra coins, we can sure use them, if not here somewhere else,” he said. “I do think people are sitting on them. I don’t know that it’s intentional.”
As for the growing number of signs requesting correct change or cards, Latham says in some instances the signs may be a corporate mandate.
“A lot of our larger box companies and certainly chain companies have experienced problems in other parts of the country,” he explained. “I also think that it might be a little bit of ‘hey, we just don’t want to touch the coins right now.’”
If you’re a business owner and can’t locate the coins you need, Latham says your local bank can help or advise you how to move forward. Latham said while these are unexpected times, the systems the association put in place years ago are working.
“Our industry is like many others, we have conducted pandemic planning exercises for years through this association with banks all across the state. I never dreamed once that we would would be in a pandemic and actually see some of the things come to fruition,” Latham said.