Are Pennies Getting Discontinued? Here’s Why
Delve into the persistent discussion surrounding the penny's relevance. Understand the forces driving calls for its removal and its continued circulation.
The penny, the lowest denomination coin, has been part of American commerce since 1793. Despite its long history, its relevance and potential discontinuation are frequently discussed. This debate reflects varied perspectives on its economic impact and utility.
Current Status of the Penny
The U.S. Treasury Department has announced plans to halt the production of new pennies, with manufacturing expected to cease by early 2026. This decision follows the placement of the final order for penny blanks. Existing pennies will remain legal tender and continue to circulate. Only the U.S. Congress has the authority to formally eliminate a form of currency from circulation.
Key Arguments for Eliminating the Penny
A primary argument for discontinuing the penny centers on its production cost, which consistently exceeds its face value. In 2024, it cost approximately 3.69 cents to produce and distribute a single penny. This inefficiency resulted in a $179 million loss for the U.S. Mint in 2023. The cost of minting pennies has exceeded their value.
Inflation has significantly eroded the penny’s purchasing power, making it economically inefficient. A penny in 1913 possessed purchasing power equivalent to about 32 cents in 2025. This diminished value limits the penny’s utility; many modern vending machines no longer accept them. Handling low-value coins can also slow down retail transactions, contributing to economic inefficiency.
A significant number of pennies do not actively circulate within the economy. Many individuals collect or hoard pennies in jars, effectively removing them from the transactional flow. Estimates suggest approximately 240 billion pennies are in circulation, with many not regularly spent. This accumulation reduces the coin’s practical use as a medium of exchange.
Reasons for Keeping the Penny
One significant concern among proponents of keeping the penny is the potential for widespread price rounding. If the penny were eliminated, cash transactions would likely be rounded to the nearest five cents, leading to fears that businesses would predominantly round prices up. This could result in a hidden “rounding tax” that disproportionately affects consumers, especially those with lower incomes who rely more on cash transactions. While some economic studies suggest rounding would be neutral over time, the perception of increased costs remains a counter-argument.
Pennies also play a role in charitable giving, with many organizations relying on small change donations. Collection drives, such as “Pennies for Patients” programs, have historically raised millions of dollars for various causes. The perceived low value of pennies often makes individuals more willing to donate them, contributing to fundraising efforts for charities.
The penny holds historical and sentimental value for many Americans. It is the only coin that features Abraham Lincoln, a revered figure in U.S. history. This cultural significance creates resistance to its discontinuation, as some view its elimination as a loss of tradition.
The penny offers retailers flexibility in pricing items, allowing them to use price points ending in .99 cents, which are often perceived as more attractive to consumers. Eliminating the penny could force businesses to adjust their pricing strategies, potentially impacting consumer psychology and sales.