Surprising problem is frustrating customers, costing restaurants millions, experts say – MLive.com
The restaurant industry has a penny problem.
That’s the word from the National Restaurant Association, which sent out a notice this week imploring federal officials to address issues related to a nationwide penny shortage.
The U.S. stopped making the penny on Nov. 12, but it remains legal tender across the U.S. That’s created some issues for the $1 trillion restaurant industry in which more than one in four transactions are paid in cash.
In general, when operators can’t provide exact change, it can cause chaos at the point of sale, according to the National Restaurant Association
The organization is seeking two solutions:
- Urging the U.S. Treasury, the Federal Reserve, and the coin supply chain to work together to ensure the nationwide circulation of the penny.
- Federal legislation establishing nationwide rounding rules with a safe harbor for restaurant operators handling transactions when exact change is unavailable.
“When operators can’t provide exact change, it creates friction at checkout, frustrating customers,” said Michelle Korsmo, President & CEO of the National Restaurant Association.
“In a highly competitive industry, like restaurants, any change to the hospitality our customers expect could mean a lost return sale for an operator.”Right now, many restaurant operators are rounding down when they don’t have the right change.
However, prolonged rounding down could cost restaurant operators an estimated $13-$14 million per month, officials said, adding that in an industry with low 3-5% pre-tax profit margins, rounding due to the penny shortage will start to cut into operator profitability.
Korsmo asked leaders at the Fed and Treasury to help alleviate the penny shortage by re-opening the penny order and deposit system.
“This will help to recirculate the penny while the Association works with Congress to pass legislation that provides national rounding guidance for all businesses and a safe harbor for when restaurant and business owners need to round because exact change cannot be provided,” he said.
Officials have asked Treasury Secretary Scott Bessent to issue temporary rounding guidance that would provide some degree of certainty and consistency for restaurant owners and their customers when exact change isn’t available.
“Congress is working on legislation that would provide the long-term solutions, and the Association is coordinating closely with the bill sponsors to ensure it includes the industry’s priorities,” a news release said.
“If passed, this legislation would safeguard small business owners from potential liability, simplify transactions, and reflect the reality of a post-penny economy.”
