It’s common today to hear people talking about change, but they aren’t discussing COVID-19 or political unrest. They are talking about actual change like nickels, dimes and quarters, why they are in such short supply and how this is impacting their shopping experiences. It’s also common to see more people acquiring and using debit cards to pay for retail purchases.
To understand both developments it helps to understand how coins make their way through the economy. If you put change in a vending machine, the owner empties the machine and takes that change to the bank. If you regularly empty your pockets at night and put those coins in a jar, you eventually take that jar to the bank to receive paper money or put it in your account. In turn, banks provide those coins to businesses who need them to make change.
“After the pandemic hit, most people stayed away from facilities with vending machines and other coin-based businesses and those folks with jars of coins at home chose not to take them the bank so these sources of coins dried up,” says Amy Good University Park Branch President of Legacy Bank.
It’s logical to ask why more coins were not produced. The answer is that the U.S. Mint’s ability to ramp up coin production was slowed down as the Mint began protecting its employees from the coronavirus infection. Because of the resulting shortage, the Mint made changes in the amount of coins allocated among banks so many banks did not receive their normal supplies.
Retailers and consumers have adapted quickly. All purchases at self-service checkout lines at many large retailers require payment to be made with credit or debit cards. Other stores or cash lines at large stores ask customers to donate the change they have coming to a charitable organization with which the retailer has made arrangements. Some stores may also apply the change to a customer’s rewards or loyalty card if they have one and the amount will be credited to their next purchase.
Shoppers responded as well. Many who have historically used credit cards or cash to buy things, are recognizing that a third method, a debit card, is a convenient answer to the shopping issues caused by coin shortages.
“If you have a bank checking account issuing a debit card is simple and just requires a request from the customer,” notes Good. “Rather than cashing a check or going to an ATM to have spending money, you can use the debit card for those purchases. It helps the local economy and makes shopping easy for both the consumer and the retailer.”
When you make a purchase with the debit card, the bank withdraws that exact amount from your checking account and provides it to the retailer. You can visit your account balance on the bank’s website to confirm the transaction. In some cases the purchase will be noted as “pending” while the transaction is being cleared but the amount has been deducted from your available funds.
For those without debit cards, your bank is a great source of help. “Getting a debit card in most cases is a quick and easy process,” comments Good. “A few steps and most banks can have a card to you in a few days; don’t forget to bring your change to deposit when you come in. Every step helps,” Good says with a smile.
As more businesses open and consumers again start using vending machines and visit the laundromat or coin-operated car wash the amount of coins in circulation will increase. Consumers who have jars of coins in their cupboards are encouraged to take them to their bank as often as possible. Many bank lobbies are now open to handle this transaction but if not, they will make an appointment to come to the bank and turn in coins.
Amy Good is the University Park branch president for Legacy Bank. Good has extensive experience ranging from government to the public sector. An avid Pueblo County volunteer, she has spent 15 years of her career in finance advocating for local businesses and residents.
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