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On December 23, the U.S. Department of the Treasury released public guidance addressing how businesses should handle cash transactions as pennies become increasingly scarce. This long-awaited guidance follows months of advocacy by national business groups, including direct engagement with Treasury officials and a formal letter from industry leadership urging action.

The guidance explains that as pennies fall out of circulation, businesses may round cash transactions up or down to the nearest five cents, provided the practice is applied fairly, consistently, and transparently. Importantly, rounding should occur only after all taxes, fees, and duties are calculated, and it should apply only to cash payments. Non-cash transactions, such as credit cards, debit cards, checks, and gift cards, should continue to be processed to the exact cent.

Treasury emphasizes that the penny remains legal tender and that existing pennies will continue circulating through the Federal Reserve for as long as possible. However, with production costs now exceeding 3.5 cents per penny, the federal government has halted manufacturing new coins, citing fiscal responsibility and the declining role of cash transactions.

While this guidance offers a helpful reference point, especially in the absence of a national standard, it does not override state or local laws or provide legal protections where rounding is not currently permitted. That is why continued advocacy is essential.

This guidance is a step forward, but it is not the finish line. Resuming distribution of existing pennies and establishing a clear federal rounding standard remain critical priorities to ensure consistency, fairness, and certainty for businesses and consumers alike. We will continue to keep members informed and welcome feedback on how this transition is unfolding on the ground.

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