A widely reported national coin shortage is not leading to much change for local small businesses. At least when it comes to policies around transactions.
To the contrary, aside from one outlier, multiple small business managers and owners last week said they had not had any issue with the flow of coins into their cash registers.
The businesses, ranging from coffee shops to jewelry stores, had not experienced a disruption of their typical coin orders at local banks, aside from Hepler’s Big Cheese Pizza.
Christy Podolski, co-owner of the pizzeria, said she had gone to her bank on a Friday about three weeks ago. The teller she went to had no change in her drawer and said there was none in the vault.
“I was shocked,” Podolski said. She had need of quarters specifically.
She returned the following Monday and already more coins were available. Aside from that one time, Podolski said she hasn’t had an issue.
During that weekend though the pizza shop at 499 N. Wilbur Ave. put up signs asking customers to either give exact change, leave tips or pay with a card in order to account for the change shortage.
It was just a small sample of what some businesses across the country have faced after the U.S. Mint and U.S. Federal Reserve alerted banks of a potential coin shortage on June 11.
Since then, the Fed has established a task force to address the shortage, and its leaders have said they are working to get new coins circulating back into the economy.
Some experts are worried the shortage could affect small businesses and lower-income Americans, but that has not appeared to be the case in Walla Walla since the announcement.
It’s possible there will be a “trickle down” effect, just like when the Recession took about a year to hit Walla Walla.
Baker Boyer Bank’s Lynsey Sherry says that could be a good thing. Sherry is an associate vice president and banking operations manager for the Walla Walla-based financial institution.
“… What happens in bigger cities does kind of trickle down to us, which is kind of nice,” Sherry said. She said the lag can help businesses learn from mistakes seen in larger cities and devise solutions around them.
For example, chip readers on credit and debit cards were adopted a little later in the area.
“There was better information by the time (chip readers) became normalized in Walla Walla,” Sherry said.
In light of the coin shortage, on top of an international pandemic, Sherry said the four Baker Boyer branches in the Valley have increased communication — if one branch is beginning to run low on coins, they can compile resources to help each other out.
“We work together to say, ‘OK, who needs what denomination and are we staying within our limit?’” Sherry said.
Sherry said people probably began panicking about coins when national stores and food chains began putting up signs, alerting people of the shortage.
But calling it a shortage is a misnomer.
Economic experts told Forbes recently that it’s more of a change “disruption.”
It makes sense when a simple thought experiment is played out: Some businesses were closed during COVID-19-related shutdowns — including coin-heavy businesses like laundromats, arcades and car washes. Those businesses were not able to bring in large coin deposits, so banks had to rely on buying the change straight from their U.S. Mint supplier.
But the Mint also slowed down production to accommodate for social distancing for its employees, so a sudden cascade of change orders took the Mint off guard, leading its leaders to ask Americans to bring their spare change to banks or spend it by paying in exact change or leaving tips — just like Big Cheese had done.
Still, it will take some time for the change to re-circulate into the economy.
Kelly McPhee, Banner Bank’s vice president of communications and public relations, said it was “a perfect storm” that led to the circulation issue.
“No one ever foresaw so many businesses being closed for this length of time,” McPhee said.
Even entertainment companies, McPhee pointed out, bring in lots of coins to banks. For example, McPhee pointed out how Walla Walla Sweets Baseball didn’t have its season, so the usual ticket sales, beverage and food sales at the ballpark didn’t happen all summer.
As the closures piled up for businesses, the coins stopped rolling in. The coins still exist, obviously, but they aren’t getting moved around.
One solution McPhee has seen is larger businesses inviting patrons to round up their orders to the next dollar to assist charities. Then the charity in question gets a check cut to it, therefore no loose change ever gets exchanged. It cuts down the business’s need for the change, but the bank still doesn’t get it either.
Every change in the economy has an effect on the change in the economy.
McPhee said this isn’t the first coin conundrum the U.S. has seen.
“As a nation, we have been in this situation before” McPhee said. “… we should take some reassurance in that.”
In the meantime, some businesses have encouraged electronic payments.
“I know with overall electronic transactions — online payments, online banking, wire transfers — we have seen a significant increase in all of those,” McPhee said. “At one point our wire transfers were up 80%.”
Sherry said local banks should be aware of the habits of their customers.
“We have people who are pretty knowledgeable of the merchants and their patterns,” Sherry said. “So we can kind of plan ahead based on history.
“So far we’re just kind of taking it week by week as it’s happening.”
Livit Coffee owner Andrew Thonney said a lot of his coins come from tips left behind by customers.
“At that point (running out of change), we would have to recycle coin with tips, to be honest,” Thonney said. “Being a coffee shop, a lot of our coin comes back in tips.”
Both McPhee and Sherry said the circulation issue should not be confused as a move to remove cash from the economy.
“This is simply one more thing that has occurred with the pandemic,” McPhee said. “There is not somebody behind the scenes trying to remove cash from society. As a bank, we can say with great confidence cash and coin will always have a place in our economy.”