HUNTSVILLE, Ala. – If you’ve frequented local drive thru’s lately, you might be accustomed to hearing “we’re not taking cash,” or “Cards only” through the loud speaker.
Some of your favorite restaurants and grocery chains have also posted signs acknowledging a coin shortage, but the Alabama Bankers Association said that’s not actually accurate.
“When COVID-19 restrictions went into place we have changed our day to day behavior that resulted in far fewer coins, being used either when we’re spending money or in making change,” explained Scott Latham, CEO and President of the ABA.
The executive said the pandemic is causing many people to keep their coins in their pockets, which causes a slow down in the coin’s lifespan.
Coins are created by the U.S. Mint. They are then distributed by the Federal Reserve to banks.
The banks then provide the coins to merchants or businesses.
But many consumers have opted for contactless payment options like cards and mobile apps. Meaning banks aren’t seeing nearly as many withdrawals or deposits by merchants.
So there’s really no ‘shortage’ per se. The coins still exist, they’re just not seeing much movement at the moment.
“We certainly call it a circulation issue,” Latham explained. “It’s almost a supply and demand, sort of thing.”
He said many of the signs you see may be mandated by a chain’s corporate office. Latham believes as more people venture outside again and resume normal activities, coin circulation will improve and many of those signs will come down.
The ABA said because there’s an uptick in consumers using credit and debit cards, the organization encourages closely monitoring bank activity. The threats of identity theft and fraud have seemingly increased during the pandemic.