You’ve probably seen the signs at local gas stations or grocery stores. "Exact change only," they plead, or maybe there's a jar where people dump their unwanted copper-plated zinc because honestly, nobody wants to carry them anymore. It feels like they're gone. If you've been wondering have pennies been discontinued, the short answer is a flat no—but the long answer is way more interesting and involves a lot of government math that doesn't quite add up.
The United States Mint is still cranking these things out by the billions. Literally. Even though it costs significantly more to make a penny than the coin is actually worth, the assembly lines in Philadelphia and Denver haven't stopped. We are currently stuck in a weird financial limbo where the currency exists, it's legal tender, but it’s effectively useless for buying anything on its own.
Why haven't pennies been discontinued yet?
It's a money loser. Since 2006, the cost of the metals used to make the penny—primarily zinc with a thin copper coating—has skyrocketed. According to the U.S. Mint’s 2023 Annual Report, it now costs about 3.07 cents to produce a single one-cent piece.
Think about that for a second. The government is spending three cents to give you one cent.
In any normal business, you'd be fired for that kind of margin. So why do we keep doing it? It’s not just about tradition. There are massive lobbying groups, like Americans for Common Sense, which is actually funded largely by Jarden Zinc Products—the company that sells the blank zinc discs to the Mint. They argue that getting rid of the penny would lead to "rounding up" at the register, essentially a hidden tax on the poor.
Then you have the sentimentalists. People love Abraham Lincoln. There’s a deep-seated psychological attachment to the "lucky penny." But if you look at countries like Canada, Australia, or New Zealand, they all ditched their low-denomination coins years ago. And guess what? Their economies didn't collapse.
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The Canadian Experiment
Canada is the best case study for what happens when the penny goes away. They stopped distributing them in 2013. They didn't "recall" them—you can still take a bag of old Canadian pennies to a bank—but they stopped making new ones.
Cash transactions are rounded to the nearest five cents. If your bill is $1.02, you pay a buck. If it’s $1.03, you pay $1.05. It’s simple. Electronic transactions (debit, credit, Apple Pay) aren't rounded at all; they stay exact to the cent. This removed the "inflation" fear almost instantly because most people pay with cards anyway.
The Logistics of a Penny-Less America
If the U.S. finally decided that have pennies been discontinued should be a "yes," the transition would be messy but manageable. We already do this on military bases overseas. The AAFES (Army and Air Force Exchange Service) has been rounding transactions at overseas military exchanges for decades because shipping heavy boxes of pennies across the ocean is a logistical nightmare and a waste of jet fuel.
The "Coin Shortage" of 2020 and 2021 also gave us a sneak peek. Remember those signs? Banks were desperate for change because the "velocity" of money stopped. Pennies weren't circulating; they were sitting in jars on people's dressers or stuck in couch cushions.
- Total Pennies in Circulation: Estimates suggest there are over 140 billion pennies sitting in the "wild," but a huge chunk of them are stagnant.
- The Zinc Factor: The price of zinc is the real master of the penny's fate. If zinc prices spike again, the "seigniorage" (the loss the Mint takes) becomes unsustainable even for a government known for overspending.
- Vending and Tolls: Most machines haven't accepted pennies in years. When was the last time you saw a vending machine with a penny slot? Exactly.
What about inflation?
Economists like Robert Whaples have studied the "rounding tax" theory extensively. His research suggests that rounding would be a wash for the average consumer. Some things round up, some round down. Over the course of a year, the difference to your bank account would be negligible—likely less than the price of a single cup of coffee.
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The real winners would be the businesses. Think about the time spent by a cashier counting out four cents in change. Multiply that by millions of transactions a day. That's a lot of labor cost spent on a coin that can't even buy a piece of bubblegum anymore.
The Stealth Discontinuation
Even though the law hasn't changed, we are seeing a "stealth" discontinuation. Many small businesses are simply refusing to deal with them. You'll see "Give a penny, take a penny" trays that are overflowing because people want to lighten their pockets, not take more copper home.
The penny is basically a zombie currency. It’s dead, but it’s still walking.
Modern Alternatives and Digital Change
We are moving toward a cashless society faster than the government can update its coinage laws. Apps like Acorns or "Keep the Change" programs from banks like Bank of America do what the penny used to do—they handle the small stuff. They round up your $4.50 latte to $5.00 and put that 50 cents into savings. This is the digital version of the penny jar, and it’s way more efficient.
The Mint actually looked into using cheaper metals. They explored steel, like they did back in 1943 during World War II when copper was needed for shell casings. But even steel pennies would eventually become too expensive to produce and would require every vending machine and coin counter in the country to be recalibrated, which costs even more money.
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Real World Advice for Your Spare Change
So, since we know that pennies haven't been discontinued officially, what should you do with the piles of them you probably have?
- Don't use Coinstar if you can help it. Those machines often take a 11-12% cut. That's a massive hit. Instead, many Coinstars offer a "No Fee" option if you take the payout as a gift card (like Amazon or Starbucks).
- Check for "Wheaties." Before you dump that jar, look for pennies dated 1958 or earlier. These "Wheat Pennies" are 95% copper and are worth at least 3-5 cents just for the metal content, and potentially much more to collectors.
- Roll them yourself. It’s tedious, but most credit unions and some banks (like Chase or Wells Fargo, depending on the branch) will take rolled coins for free if you're an account holder. Some even have self-service coin counters for members.
- Charity boxes. Those little boxes at the pharmacy or fast-food counters aren't just for show. Pennies are a burden to you, but when a charity collects 100,000 of them, that's $1,000.
The Bottom Line
The penny persists because of political inertia, not economic necessity. It's a symbol that has outlived its utility. While the question have pennies been discontinued currently results in a "no," the reality is that the public has already started the process of phased retirement. We've moved on, even if the Department of the Treasury hasn't caught up yet.
Eventually, the math will become so lopsided that the government will have no choice. When it costs five cents to make one cent, even the lobbyists won't be able to save it. Until then, you’ll keep seeing them at the bottom of your bag, reminders of a time when a cent actually bought something.
Stop hoarding and start circulating. If you have a massive stash of pennies, the most "pro-economy" thing you can do is take them to a bank or a Coinstar. Getting that metal back into the system reduces the need for the Mint to strike new ones at a loss. If you're a collector, keep an eye out for the 1943 copper penny (a rare error) or the 1955 doubled die—but for the other 99.9% of the coins in your jar, they're just taking up space. Use them to fund a gift card or clear out your local "exact change" requirement next time you're buying a soda.