Retail

How Retailers Are Cashing In On A US Coin Shortage

As the United States experiences a coin shortage due to the pandemic, some brick-and-mortar retailers are forcing consumers to tell cashiers to “keep the change.”

Kroger is the largest chain so far to do so, temporarily refusing to give coins out as change. Customers can either round up their bills to the nearest dollar and give the excess to charity or get their change stored on loyalty cards.

"The Federal Reserve is experiencing a significant coin shortage that is impacting our store operations and ability to provide change,” the company wrote on Twitter. “As a result, the company is implementing a new process for providing change to customers. In all staffed lanes, coin change owed to the customer can be applied to your loyalty card and can be used on your next in-store, Pick-Up or Delivery purchase. Alternately, we can round your transaction up to the nearest dollar and donate it to your local foodbank.”

The Fed had said in a June 11 statement that the pandemic “has significantly disrupted the supply chain and normal circulation patterns for U.S. coin. In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly, and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees.”

Kroger isn’t alone in attempting to make customers do without coins amid the shortage. Some stores in the Giant Food chain are reportedly doing the same. And convenience store chain Wawa is reportedly asking shoppers to pay through exact change, debit cards, credit cards or the Wawa mobile app if they can, although the request isn’t mandatory.

Some cash-paying customers might dislike such moves, but putting change on loyalty cards could be a real boon for merchants. For openers, shoppers who don’t already have loyalty cards for a given chain might sign up just to keep from losing their change. Not only will those customers give the grocers some personal information in doing so, but they’ll presumably revisit the retailer in the future to spend their unused change.

Grocers are already tying loyalty programs to the contactless payment systems that many customers seem to favor in a post-pandemic world.

For instance, Kroger launched its Kroger Pay contactless payment option in April. The system allows consumers to link their payment information to their loyalty account at the supermarket chain through an app, then use a QR code for payment at checkouts or self-checkouts.

Similarly, southeast U.S. grocery chain Publix recently unveiled a new loyalty program called Club Publix. It brings together digital features, including a branded digital wallet, the choice to receive eReceipts and early notifications of promotions.

If the U.S. coin shortage grows, more and more retailers could force shoppers to “keep the change” on their loyalty cards. That might be a real positive for retailers.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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