CNN
–

Despite changes on the horizon, the American penny is not disappearing anytime soon.

The United States Department of the Treasury announced Thursday its intentions to curtail production of the penny,a currency that has been around for over 230 years. The penny will remain legal tender and continue to circulate in businesses across the nation for the foreseeable future.

Retail Impact and Consumer Behaviour

According to Jeff lenard, spokesman for the National Association of Convenience Stores, “If we observe the experience in Canada, during the first year after stopping making coins of a penny, there were no changes in transactions.” He noted that convenience stores handle approximately 32 million cash transactions daily, representing about 20% of their total sales.

“The main objective of retailers is to serve customers and make this transition as fluid as possible,” said Dylan Jeon, senior director of NRF government relations.

The National Federation of Retailers, representing major store chains and small retailers, anticipates that its members will continue to accept pennies even after production ceases, which is expected early next year.Though, they foresee many retailers rounding cash transactions to the nearest nickel once the supply of pennies from banks diminishes.

Penny Overabundance and Practicality

There are an estimated 114 billion pennies currently in circulation. The Treasury Department considers them “severely underutilized,” with many sitting forgotten in jars and drawers.

The sheer volume of pennies could fill a 13-story building. Many people discard them or leave them in store collection jars.

Lenard stated that the vast number of pennies in circulation means retailers will have an ample supply for some time. Eventually, stores will be unable to acquire new pennies from banks and will begin rounding transactions to the nearest nickel. This decision will be at the discretion of each retailer, not dictated by government policy.

Electronic transactions, such as credit and debit card purchases, will still be calculated to the exact penny. Onyl cash transactions will be subject to rounding, according to Lenard.

Even in Canada, where penny production ended in 2012, the coin remains legal tender. The Canada Ministry of Finance has stated that pennies retain their value for transactions “indefinitely.” Most stores will likely accept pennies if a customer wishes to use them, Lenard said.

“there is a saying in the retail trade: ‘Never lose a client for a penny,'” he said. “I had never thought so, but apply even more here. I think that if someone wants to pay with cents, most shops will be inclined to make those customers happy.”