The U.S. Congress has approved legislation allowing retailers to round cash transactions to the nearest five cents in an effort to address the ongoing challenges caused by the discontinuation of penny production. The bill, known as the Common Cents Act, was passed by the Senate on September 28 and now awaits the president’s signature.

The Treasury Department halted the minting of pennies in 2025, following directives issued during the administration of former President Donald Trump. The decision was driven by the increasing costs of producing pennies, which reached approximately 3.69 cents per coin in 2024. This resulted in an estimated $18 million loss for the government in that year alone. Despite these costs, the penny remains in circulation, with about 114 billion coins still available.

Retailers have faced difficulties making change since the penny's production ceased, particularly for transactions requiring exact change. The new law aims to reduce confusion and ease the burden on cashiers by permitting rounding of purchase totals to the nearest five-cent increment when exact change is not available.

Under the proposed system, prices ending in 1, 2, 6, or 7 cents would be rounded down to the nearest multiple of five (either 0 or 5), while those ending in 3, 4, 8, or 9 cents would be rounded up. For example, a transaction totaling $9.98 could be rounded up to $10.00 if the customer pays with a $10 bill and pennies are unavailable.

Stakeholders indicate that the change is primarily meant to simplify everyday transactions. Steve Kenneally, senior vice president for payments at the American Bankers Association, noted that the law would help eliminate awkward situations where retailers cannot return pennies due to a shortage. Meanwhile, some consumers have expressed concerns about overpaying, but experts emphasize that, mathematically, the rounding procedure will balance out over time, with an equal number of transactions rounded up and down.

Currently, some states and municipalities have laws prohibiting merchant rounding, which has created inconsistency for businesses. The Common Cents Act would supersede these state and local restrictions, establishing a uniform federal standard that legitimizes rounding practices nationwide. This includes areas where existing laws require equal pricing for cash and non-cash customers, which under the new rules would no longer prevent rounding in cash transactions.

Retailers, in particular convenience stores, have reported penny shortages that complicate the making of change for small cash purchases. With coin trays that once overflowed with pennies now often containing only nickels, dimes, and quarters, many stores have already informally adopted rounding practices to cope with the scarcity. However, the lack of clear federal guidance prior to the legislation has left some merchants uncertain about their legal standing.

The law does not mandate retailers to round prices; customers and merchants can still use and accept pennies where available, and cash transactions can be completed without rounding if exact change is provided.

While the penny is currently the primary focus, experts predict that the federal government will eventually consider eliminating the nickel due to similar cost issues. The nickel cost 13.78 cents to produce in 2024, representing a nearly nine-cent loss per coin. The Common Cents Act includes provisions requiring the Treasury Department to notify Congress before any future discontinuation of other coins and encourages exploring cheaper production methods.

Despite no longer being produced, pennies remain legal tender and are expected to continue circulating for the foreseeable future. Though some rare pennies, such as the 1943 copper penny, hold collector value, most pennies will retain their face value without significant appreciation.

The approval of the Common Cents Act marks a major step in modernizing cash transactions in the United States and addressing longstanding issues with low-value coins in everyday commerce.