The pandemic has brought on a shortage of toilet paper, cleaning supplies and disinfectants. Now there's a new shortfall in the form of currency.
The coin supply has been disrupted, forcing the Federal Reserve to step in.
Like everything else in our lives, COVID-19 got in the way. This time it’s affecting the currency supply by causing fewer coins.
Now, the U.S Mint is trying to keep up with the demand.
Jim Gaherity of Coinstar, which has 22,000 kiosks around the world, says this is a call to action.
“What’s happened during the pandemic is businesses have been shut down without access to buy your daily coffee, afternoon sandwich, which most purchases of small items is done by cash,” Gaherity said. “In the US, the ability of the consumer to recirculate that coin back into the retail, which then goes back into the bank, slowed down significantly.”
The 29-year-old company is mainly featured in grocery stores and banks. People come in with loose change and get a voucher for folding money, or these days, you can load your Starbucks and Amazon account, donate to charity, or buy bitcoin. Gaherity says, believe it or not, most of those coins are now stuck in people's homes.
“The vast majority of coins is (sic) recirculated through typical use of consumer,” Gaherity said. “They’re either taking it and buying things from store, which goes into till, which then goes back into the banking system into inventories, or they’re going to aggregators like Coinstar.”
The way money is funneled through our country is like a big cycle. The mint produces a new coin and it goes through the federal reserve bank, which then takes orders from banks and distributes it.
“What banks do is look historically in terms of retail orders that they’re getting,” Gaherity said. “Retail is getting coin and currency from their local bank and they know historically what that volume typically looks like so they place their orders in advance to fulfill the need from retail.”
Businesses and consumers help move it around, too.
“Coinstar recirculates more coins every year in the US by 3.5 times what the US mint produces,” Gaherity said.
Those Coinstar kiosk bins weigh about 700 pounds when collected. That's a lot of pennies, nickels, dimes and quarters. Trucks pick it up and swap it out.
“That coin goes on the truck and into a processing center,” Gaherity said. “It’s places like Loomis and Brinks where we deliver that coin. They take those bins and fine count every single piece and distribute into denominational bins so all the pennies, nickels, dimes, all get segregated. Once that’s all done and count is complete, it goes back into the local bank.”
Coinstar is doing extra pickups to help recirculate as much as they can. There's just not enough out there because people aren't putting it back into the system.
Asked if coins are, like toilet paper once was, the next thing that people are hoarding, Gaherity said, “That’s the question we’re trying to answer. We work with the Mint and Federal Reserve to try and understand better. Are banks hoarding it right now? Are they keeping it for themselves for their customer calls to start again? If you think about a bank that services Walmart, they want to have enough coin in their inventory to deliver to Walmart for their registers. They don’t want to disappoint Walmart. Nobody wants to disappoint their retailers.”
Banks are the largest recycler of coins. They, like the rest of us, are watching, waiting, to be able to resume normal routines. When we asked what's next, Gaherity said, “That is the question of the day. How do we get the right supply to meet the demand that’s out there? What we’re asking Americans is come out and do your normal transactions, go to a Coinstar, go to a bank and make deposits so we can see recirculated coin fill the pipeline enough for the demand we have.”
The good news, he says, is that the European Coinstar Operations are back online and normal.