Hawaii Businesses Adapt to National Penny Shortage, Rounding Policies Emerge
Honolulu, HI – A nationwide shortage of pennies is prompting businesses in Hawaii to adjust their cash handling policies, with many opting to round transactions to the nearest nickel. The U.S. Treasury halted penny production late last year, as the cost to manufacture the coin exceeds its face value by more than three times.
The Penny Problem: Why Production Halted
The decision to cease penny production stems from economic realities. Manufacturing a penny currently costs over three cents, making it a financial loss for the Treasury with each coin produced. This has led to a dwindling supply of pennies in circulation, impacting businesses that rely on cash transactions.
Lion Coffee Leads the Way with Rounding
At Lion Coffee in Kalihi, a popular local coffee shop, customers paying with cash are now having their orders rounded to the nearest nickel. Store manager Mercy Abel explained that baristas are even using their own pennies to maintain sufficient stock. “We have like bags of dollars worth of pennies,” Abel said. Despite the change, customer response has been largely positive.
“We’re hooked, everyone’s hooked on the coffee,” said patron Christina Young. “Rounding up, I consider is, it’s happening, you can’t really avoid it, and I’m okay with it.”
Broader Impact on Hawaii Businesses
The penny shortage isn’t limited to coffee shops. Target Ala Moana is similarly displaying signs informing customers of the change. Victor Lim, of the Hawaii Restaurant Association, highlighted the particular challenges faced by smaller, cash-dependent businesses. “Businesses that use credit cards, I mean that’s not a problem. But think about mom and pops, corner of your block…they basically deal with 100% cash transaction,” Lim stated.
Legislative Efforts to Standardize Rounding
To provide clarity and consistency, Victor Lim is advocating for House Bill 2346, which proposes a standardized rounding policy: transactions of two cents or less would be rounded down, while those of three cents or more would be rounded up. “Two and under, you round down, three and up you round up, so that’s basically what we learn in elementary school and we’re asking people to apply this common sense way of doing business,” Lim explained. The bill recently passed a committee and is now under consideration by the House Committee on Consumer Protection and Commerce.
The Future of the Penny
While pennies remain legal tender, experts predict their eventual obsolescence. Lim anticipates that pennies will grow largely unusable within the next two to three years. The shift towards digital payment methods, such as Apple Pay, is also contributing to the decline in penny usage, as noted by shopper Willow Logan: “It’s just easier to do tap and pay.”
About Lion Coffee
Founded in 1864 in Toledo, Ohio, Lion Coffee moved to Hawaii in 1979 and has since become a beloved local brand. The company offers a variety of coffee blends, including 100% Kona Coffee and island-inspired flavors. Lion Coffee was recently voted Hawaii’s #1 Local Coffee Brand.