In a letter to the U.S. Department of the Treasury and the Federal Reserve, the National Grocers Association (NGA) called on the federal policymakers to take rapid action to address a nationwide shortage of coins caused by a drop in cash transactions for retail purchases during the coronavirus pandemic.
NGA, along with six other retail trade associations, requested Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin address the shortage by releasing more coins from federal inventory or increasing coin production to meet immediate needs.
NGA was joined by FMI – The Food Industry Association, International Franchise Association, National Association of Convenience Stores, National Automatic Merchandising Association, Retail Industry Leaders Association and Society of Independent Gasoline Marketers of America in signing the letter. All the businesses these groups represent have been designated part of the essential critical infrastructure workforce by the Department of Homeland Security during the COVID-19 pandemic.
“These industries need to efficiently process large volumes of consumer transactions every day and many of those transactions are paid in cash. A critical, but largely unseen, part of these businesses’ operations, then, is obtaining sufficient amounts of coins to be able to handle cash transactions and provide customers with change,” the letter reads.
The letter outlines three primary ways to address the coin shortage: 1) the Federal Reserve could distribute more coins from its inventory to ensure that economic activity is not disrupted; 2) the U.S. Mint could increase coin production to meet these needs; and 3) distribution of coins could be prioritized for consumer businesses in the essential critical infrastructure workforce that most need coins to complete cash transactions with individual Americans.
“Grocery continues to be an environment where consumers prefer to use cash, with roughly one out of every five transactions being paid with cash. Independent grocery serves many communities throughout the U.S. that are underbanked or unbanked, and without availability of coinage, these customers are going to be hardest hit. This is the time for the Fed to fully use its coin inventory to relieve this problem and for the Mint to redouble its efforts to ensure we replenish reserves at the Fed and at financial institutions,” said Greg Ferrara, president and CEO of NGA. “These are unprecedented times in our country’s history, and yet despite the disruptions and challenges brought on by the current pandemic, independent grocers continue to overcome obstacle after obstacle to serve their communities.”
The letter also requests guidance from the Federal Reserve on potential merchant operational responses as member companies find themselves having to make quick decisions about customer engagement as they face this shortage in real time.
The full letter can be viewed here.
