$168M hit from Trump penny policy could soon impact restaurant prices nationwide

U.S. penny production enters a new phase

President Donald Trump directed the Treasury Department in February 2025 to stop making new pennies, and the U.S. Mint struck its final circulating 1-cent coin in November 2025. That ended regular circulating penny production after 232 years, even though existing pennies remain legal tender.

The change was driven in part by cost. The Treasury and Mint say producing a penny costs 3.69 cents in fiscal 2024, far above its 1-cent face value.

As penny supplies tighten over time, some cash-heavy businesses are preparing for more rounding and checkout adjustments. Restaurants have warned that the transition is especially difficult for operators handling many small cash transactions.

Restaurants warn of major rounding costs

The National Restaurant Association estimates that prolonged rounding down due to penny shortages could cost restaurants $156M to $168M a year, or roughly $13M to $14M a month. That figure is an industry estimate, not a government calculation.

The concern is that small cash-rounding losses can add up across a large volume of transactions. For an industry that often operates on about a 5% pre-tax margin, even minor repeated losses can matter.

Cash payments drive the financial impact

Restaurants remain more exposed than many industries because more than 1 in 4 restaurant purchases are still paid in cash, according to the National Restaurant Association.

When exact penny change is unavailable, the final cash total may need to be rounded to the nearest 5 cents. Electronic payments still go through to the exact cent, so the effect falls mainly on cash transactions.

Because restaurants handle a high volume of relatively small purchases, repeated rounding can add up over time.

No standard leads to inconsistent pricing

Businesses are using different rounding approaches because the U.S. still has no binding national rounding law covering all cash transactions after the end of new penny production. Treasury has issued nonbinding guidance, and states are beginning to adopt their own rules.

That can create different customer experiences across jurisdictions. Depending on the rounding method a business uses an

Government saves $56M annually

Ending penny production is expected to save about $56M annually in minting costs. The savings come from eliminating a coin that costs significantly more to produce than its face value.

The penny had become one of the least efficient parts of the U.S. currency system. Rising material and production costs widened the gap over time.

While the government benefits from reduced expenses, businesses now face indirect costs tied to rounding and operational adjustments, shifting the financial burden.

Most pennies are not moving through daily commerce

Pennies have not disappeared from the economy, but official figures differ on how many are actively circulating.

The U.S. Mint said in November 2025 that about 300 billion pennies remained in circulation, while the Treasury later said the Federal Reserve would continue recirculating roughly 114 billion pennies currently in existence for as long as possible.

What is clear is that many pennies are not moving efficiently through daily commerce. Even with large numbers still out there, businesses in cash-heavy sectors can face shortages at the register when consumers keep pennies at home instead of spending or depositing them.

Consumers may pay slightly more

Rounding can increase costs for customers, especially when totals are adjusted upward to the nearest 5 cents. These increases are small but frequent.

Across millions of transactions, the total additional cost to consumers is estimated at about $6M annually. The impact is spread across everyday purchases, such as meals and snacks.

Cash users are most affected. Individuals who rely on physical currency for budgeting may notice gradual increases in their daily spending patterns.

Small restaurants may feel the strain more

Restaurants already operate on tight margins, so even small repeated rounding losses can matter. That pressure can be especially hard on smaller operators that have less room to absorb added costs.

The exact impact will vary by cash volume, pricing, and rounding policy. What is clear is that penny-related rounding adds one more operational challenge to an industry already dealing with narrow margins and elevated costs.

Digital payments avoid rounding but add fees

Card payments allow transactions to be processed to the exact cent, eliminating rounding entirely. This provides pricing accuracy for both businesses and customers.

However, each card transaction includes processing fees charged by payment networks. These fees typically range from 1% to 3% per transaction.

Restaurants must balance these competing costs. Cash payments lead to rounding losses, while digital payments introduce ongoing transaction expenses.

Policy gaps create operational challenges

There is no nationwide rule for handling transactions without pennies. Regulations vary across states, and some regions offer no guidance at all.

This fragmented system complicates operations for businesses, especially those with multiple locations. Staff must follow different practices depending on local rules.

The lack of clarity also increases disputes at checkout. Customers may question totals when rounding differs between locations.

Industry calls for uniform rounding rules

Restaurant and retail groups are actively pushing for federal legislation to standardize rounding practices across all cash transactions. The lack of a unified system has led to uneven financial outcomes and operational confusion for businesses nationwide.

Proposals focus on rounding totals to the nearest 5 cents using balanced methods. Under these systems, totals ending in 1, 2, 6, or 7 cents would be rounded down, while others would be rounded up to maintain fairness across transactions.

A national standard would create consistency across all states and industries. Businesses would gain predictable cost structures, reduce checkout disputes, and improve transparency for customers who currently face inconsistent pricing.

Other countries show smoother transitions

Countries such as Canada, Australia, and New Zealand have already eliminated low-value coins and adopted national rounding practices for cash transactions. Their transitions were supported by clearer rules than the U.S. currently has.

Canada ended penny production in 2012 and uses symmetrical rounding for cash totals. Australia and New Zealand also phased out low-denomination coins years ago, showing that economies can adapt when governments provide consistent rules.

In a broader nod to the city’s culinary growth, Visit Detroit launches the first-ever Michelin Green Guide for the city.

Transition continues with uncertain outcomes

The U.S. is still adjusting to the end of new penny production, and cash-heavy sectors such as restaurants say the change is creating real checkout and compliance challenges.

Industry groups warn that rounding losses could be meaningful for low-margin businesses, while consumers and regulators are still adapting to a system in which states may apply different rules. The long-term outcome will depend in part on whether clearer national standards are adopted.

Also, if you want to order takeout in NYC, you’ll now be asked for a tip before you even check out.

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This slideshow was made with AI assistance and human editing.

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