The Penny Shortage
Without federal legislation, rounding cash transactions could put retailers out of compliance with certain laws and threaten legal action.
The Issue
In February 2025, President Trump directed the U.S. Mint to stop producing pennies. By summer 2025, the last penny blanks had been minted and the Federal Reserve had delivered the shipments to its vaults. While the Department of Treasury initially predicted that circulation issues would not arise until 2026, these issues emerged much sooner as the Fed began shuttering its coin terminals when supply was depleted. Stores experienced penny shortages in late summer 2025, and many retailers are now unable to fulfill penny orders from their banks.
The most common-sense solution for these stores would be to round the change due to the customer to the nearest nickel. This is how other countries have been able to successfully phase out their one cent coinage. The United States, however, needs to adjust its laws to allow for rounding. There are some state and local laws that effectively require exact change. Additionally, there are rounding issues for SNAP retailers because SNAP regulations prohibit charging a SNAP customer a lower or higher price than a cash customer, which would happen in a rounding scenario. For these reasons, federal legislation is needed to allow U.S. retailers to round.
Retail Impact
Retailers who are out of pennies have no choice but to round cash transactions. However, short of federal legislation, rounding could put retailers out of compliance with certain laws and brings the threat of potential class action lawsuits from plaintiffs’ attorneys looking to take advantage of the situation. Some retailers are rounding only in the customer’s favor but that comes at a significant and unplanned cost to the business—and still violates some laws. Retailers need the ability to round up or down to the nearest nickel.
NACS Position: Advocating for Federal Legislation
NACS is working with the House Financial Services Committee and Rep. Lisa McClain on the Common Cents Act, which would allow rounding. Specifically, the legislation would allow retailers to round up or down to the closest nickel, and would provide a safe harbor for retailers who round so they can do so without violating any federal, state and local laws.
Treasury Department Guidance
In December 2025, the Treasury published a list of Penny Production Cessation FAQs. These FAQs describe rounding at a general level, but they defer to states and don’t address potential conflicts with federal regulations that could be triggered by rounding. Federal legislation is ultimately needed.
Doug Kantor
General Counsel
NACS
(703) 518-4228
Doug Kantor joined NACS as its General Counsel in May 2021.
Prior to that, Kantor most recently served as a partner at Steptoe & Johnson LLP. In this role, he worked with a range of clients, including NACS, to address public policy issues ranging from fuels to financial services. Kantor also established and administered coalitions of companies and trade associations that share common legislative and regulatory objectives. During his tenure at Steptoe, Doug also served as counsel to the Merchant Advisory Group, Society of Independent Gasoline Marketers of America, National Grocers Association, National Retail Federation, Merchants Payments Coalition, and Main Street Privacy Coalition, among other groups.
Kantor’s legal experience includes appellate litigation, campaign finance law counseling, privacy law counseling, defending state attorney general investigations, litigating securities enforcement actions, and class litigation.
Prior to Steptoe & Johnson, Kantor practiced at Collier Shannon & Scott PLLC. He also served as Special Counsel & Deputy Chief of Staff at the U.S. Department of Housing and Urban Development. Prior to attending law school, Kantor served as a public school teacher.
Kantor received a B.A. from the University of Virginia and a J.D. from Yale Law School.
