Coin shortage? Why making change is hard for Sacramento restaurants these days

No, there’s officially not a coin shortage. But it sure feels that way all over Sacramento.

At downtown’s Taco Bell Cantina, a sign taped to the front door asks customers to pay with exact change, credit or debit cards, Samsung/Google/Apple Pay, gift cards — anything but cash that’ll require them to scrounge up coins.

Next door at Coin-Op Game Room, the situation is more dire. General manager Eric Martinez used to pick up $1,000 to $5,000 in quarters from local banks for customers to purchase before hitting Coin-Op’s arcade games.

Now he only can get about $500 from banks every two weeks. Instead, Martinez drives two to three hours each way every week or two to buy quarters off vending or claw machine owners, who would otherwise pay for them to be rolled.

Coin-Op used to comfortably cruise through the weekends with a full quarter dispenser. Now staff members have to shut it down and spend time checking inventory mid-shift, Martinez said. Many of the restaurant/bar/arcade’s customers still don’t seem to grasp the situation.

“Some people will come in, (buy) $20 worth of quarters, play $5 and walk out with $15,” Martinez said. “We’ve put signs up saying we’ll break down bills for you, we’ll buy back your quarters at the bar.”

The federal government is pushing hard to assure consumers that there are plenty of pennies, nickels, dimes and quarters to go around. The problem isn’t so much supply, it’s consumer behavior. Thanks to the COVID-19 pandemic, that has changed dramatically.

People are not buying in person like they did before COVID sent the economy reeling 18 months ago. That means they’re not using as much cash.

“Shopping habits developed during the pandemic have been slow to change and continue to deviate from pre-pandemic trends, at least until this point,” said a survey of cash practices from regional Federal Reserve Banks released Tuesday.

The trends created a mini-crisis last year. Supplies in some parts of the country were down, and temporary coin limitations were issued by the Federal Reserve in June 2020 and again in May on coin supplies distributed to banks.

U.S. coins in circulation have been growing. Treasury reported it reached $48.6 billion as of April 2021, a 0.5% year over year Increase. The U.S. Mint continues to produce new coins at or near historical production levels.

The Fed continues to insist there are plenty of coins to go around. Since June 2020, the U.S. Mint has been going full blast, and last year produced 14.8 billion coins, up 24% from 2019. But the Tuesday report said the supply is still not enough because of the “reduced use of cash in transactions.”

Before the pandemic, the Federal Reserve got seven to eight coins back in deposits for every 10 it paid out. But in the COVID era, it gets three to four coins back for every 10.

“When consumers do make payments in cash and receive change, that change often ends up in one’s car or residence in jars or piggy banks,” the banks reported. “However, given the limited impact on consumers, there remains little incentive for individuals to use, deposit, or redeem their coins.”

The Fed expects some return to normalcy once the economy recovers and more businesses reopen. But there’s clearly concern in the government.

The U.S. Coin Task Force, formed last year to consider ways to convince people to use their money, last month suggested ways to get the change out again.

It lists several ways businesses can encourage the use of coins, including suggested signs saying “Exchange Your Coins Today.”

In-store orders have slowed since Donuts & Coffey opened in east Sacramento last April, an unfortunate trend with a silver lining of minimizing the coin scarcity’s impact. Still, co-owner Thana Ny said she often rounds prices down or gives back additional change on $1.35 (plus tax) doughnuts to keep from digging into her stash of small coins.

Ny’s bank will only give her two $2 rolls of nickels at a time, she said. With only 20% or so of customers paying in cash but all expecting quick service, undercharging people slightly is normally worth the effort saved not having to track down additional coins. If business picks up, that could change.

“We’d rather just take the loss than hold up the line ... a lot of people don’t have patience in a doughnut shop. They expect to be in and out fast,” Ny said. “Since we don’t have a big volume of sales right now, it’s not too bad. If it’s still a problem in winter with lots of people in line, that would be a big loss for us, to continue rounding down for our customers.”