Penny Shortages in Mid Atlantic Statesgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
June 03, 1999; Thursday 16:08 Eastern Time
HEADLINE: Penny Shortages Reported
BYLINE: BILL BERGSTROM
A penny saved is a penny earned, but too many pennies saved is a big problem for the Federal Reserve Bank in Philadelphia.
Some area stores have been asking customers to dig for exact change as their cash drawers have run short of pennies in recent weeks.
Meanwhile, stores and banks have sharply increased their orders for pennies, though no one can point to a reason for a shortage except the accumulations that pile up on dressers, in jars and in piggy banks, Federal Reserve Bank spokesman Bob McCarthy said.
''People do not take time to put pennies back in their pocket,'' McCarthy said Wednesday. ''Everyone hoards.''
As area merchants feel the crunch, some have posted notes at cash registers asking customers for exact change.
Chris McDowell, manager of a downtown Wawa Food Market, said he has run short of pennies several times in the last two weeks, but customers have helped the cashiers cope.
Sometimes a cashier will return a little extra money to make the change come out even. At other times a customer will hand over a dollar for a 98-cent item and wave away the change, he said.
McDowell said he understood the tendency to pile up pennies.
''I have a five-gallon jug at home that I would say is three-fourths full of pennies. I just don't want to wrap them,'' he said.
The Federal Reserve Bank distributed 700 million pennies to financial institutions in eastern Pennsylvania, western New Jersey and Delaware from January through May of this year, a 22 percent jump from 575 million distributed in the same period last year, McCarthy said.
In addition, banks are not sending as many pennies as usual back to the Federal Reserve, worsening the pinch, McCarthy said. When banks have accumulated more pennies than they want to keep on hand, they return the coins to be put back in circulation.
Federal Reserve officials said none of the nation's 11 other federal reserve banks was encountering such a crunch.
''There is nothing nationally going on that would indicate a shortage,'' said Rose Pianalto, a spokeswoman for the Federal Reserve Board in Washington, D.C.
McCarthy said a national shortage would be unlikely, since the two U.S. mints, in Philadelphia and Denver, use most of their capacity producing pennies. He said the Philadelphia mint produces 40 million pennies a day, and the $500 billion worth of U.S. currency in circulation worldwide includes 200 billion pennies.
Still, other areas in the country have experienced minor shortages recently. In southeast Missouri last month, banks were forced to cope with a dearth of pennies.
Bill Ramsey, a supervisor at Mercantile Bank in Cape Girardeau, Mo., said Thursday that the shortage is over, at least for now. The bank received new pennies from the Federal Reserve, while local residents dug into their personal hoards.
''We had a lot of people bring in a lot of pennies,'' Ramsey said. ''We're overflowing now.''
McCarthy said the Philadelphia Federal Reserve Bank is asking other Federal Reserve banks and the Philadelphia U.S. Mint to supply whatever pennies they can spare to ease the shortage. ''It has been over the last several weeks. We can't associate it with an event,'' he said.
-- DMH (firstname.lastname@example.org), June 03, 1999
"We can't associate it with an event."
Yeah, right. How about, "We won't publicly associate it an event, but privately we're pissing in our pants."
-- Prometheus (email@example.com), June 03, 1999.
Also see the thread:
"Midwestern Penny Shortages"
-- Linkmeister (firstname.lastname@example.org), June 04, 1999.
A coin crunch.
Businesses in the region are in a pickle for pennies
By Candace Heckman and Carrie Budoff
INQUIRER SUBURBAN STAFF
If you find a penny, pick it up.
Officials at the Federal Reserve Bank of Philadelphia said yesterday that cash registers and financial institutions in South Jersey, Delaware and most of Pennsylvania were suffering a shortage of pennies.
The reason could be the most obvious: Too many are sitting in cookie jars, stuck between sofa cushions, or scattered on dresser tops.
"People continue to hoard pennies," said Bob McCarthy, spokesman for the regional reserve. "People empty their pants and jeans, and don't put the pennies back in their pockets later."
That is about the best explanation anyone has at the moment. And it's unclear why the shortage apparently is not affecting other areas of the country.
But rest assured, McCarthy said, the penny crunch will be short- lived. Reinforcements are on the way from Federal Reserve branches in New York and Baltimore, and the U.S. Mint, so the local penny flow should return to normal within five to 15 days, McCarthy said.
The Federal Reserve Bank in Philadelphia began noticing an increase in orders from local financial institutions about three weeks ago. The reserve then began rationing the coins funneled to several hundred banks, credit unions and thrifts in South Jersey, Delaware and as far west as Johnstown, Pa.
Those pesky pennies. Vending machines reject them. Toll workers on the New Jersey Turnpike shun them. Bank tellers refuse them, unless they are rolled in paper wrappers.
And few people would give a red cent in their defense until now.
"I would encourage people to bring their dormant pennies into their retailers," McCarthy said. "That would really help us out."
Signs on the counters of Wawa Food Markets are asking customers for their pennies - and their patience. The convenience-store chain, which has more than 500 stores in Pennsylvania, New Jersey, Delaware, Maryland and Virginia, began stashing its supplies last week.
"We put the signs out as an early warning," said Lori Bruce, a spokeswoman for Wawa. "We were just trying to heighten awareness."
Wawa cashiers are asking customers to use pennies for their purchases.
For example: "If something came to $5.04, instead of giving us a nickel, we would love to take the four pennies," said Todd Miller, a Wawa shift manager in Mount Holly.
Businesses are feeling the penny pinch in varying degrees. E.J. Hunter, manager of the CVS pharmacy at South 11th and South Streets in Philadelphia, learned of the shortage when he called First Union Bank last Friday.
"They said, 'You're over your limit. You can only order 25 percent of your usual order,' " Hunter said. The trouble is, Hunter's store only orders one $25 box of pennies a week. "I said, 'How do I order 25 percent of one box?' "
Down the block, the managers of a Super Fresh supermarket got a similar message.
"We get [pennies] through Federal Armored Express. They're cutting back our order. We're only allowed to order them once a week," said front-end manager Mike DeMattei, who usually orders twice a week.
The limit has only been in effect for about week. Within a few days, "we're probably going to have to ask employees to start bringing them in," DeMattei said.
Does he think customers may get testy over the change shortage?
"Testy? Oh, yeah. This is Center City," he said.
Mary O'Donnell, teller supervisor at a Collective Bank branch in Cinnaminson, tried to order $125 worth of pennies Tuesday, but she only got $50, which she said would last just a few days. This is the first time in her 12 years at the bank that she has encountered such a problem.
"We thought we did something wrong on our end," O'Donnell said.
McCarthy said no one did anything wrong. The predicament is a result of simple supply-and-demand economics - the demand is high and the supply remains consistent. A similar spike in orders hit the Philadelphia area in 1994, he said.
"We cannot pick an event that is driving that number up," McCarthy said. "It is cyclical in nature."
The penny pressure in recent weeks marks a strange twist for the most forsaken - and least circulated - coin. Pennies represent one-half of 1 percent of the total U.S. currency, according to the Reserve.
Three percent of the population goes so far as to throw the copper- plated coins in the trash, even though three out of four Americans would pick one up from the ground, according to a poll by Coinstar Inc., a Washington state-based coin recycling company.
"It's a hassle to take them out, count them, stuff them into little paper wrappers," said Michelle Avila, spokeswoman for Coinstar.
McCarthy said the average American hoards about 600 pennies. At least at the local level, that could be why the Philadelphia Reserve produced 125 million more pennies this year when compared to the same period last year.
"It is a one-way street," he said. "Pennies do not circulate the way they used to."
Inquirer staff writer Rita Giordano contributed to this article.
-- Linkmeister (email@example.com), June 04, 1999.
Last time I was a tourist in the USA I kept finding the things rattling around in hotel furniture. Looked as if even the chambermaids didn't want them. (No, I didn't want them either!)
Also there were large quantities dumped in water features, sometimes despite signs asking people please not to do this because it pollutes the water and stains the paint.
Perhaps its time for the USA to get rid of the things altogether. In the meantime why dont the stores offer customers extra discount vouchers or loyalty points vorth more than the foregone pennies -- or just round all bills over $5 down to the nearest 5c as a sales incentive?
-- Nigel Arnot (firstname.lastname@example.org), June 04, 1999.
I personally caused a nationwide penny shortage back in 1994.
The US Mint was forced to produce more pennies (ahead of their normal schedule) and banks asked depositers to clean out their piggy banks.
I used about 20 million pennies in a series of direct mail letters. I affixed two pennies to the top of each letter.
My guess is that something like this has happened again.
-- Walt (email@example.com), June 04, 1999.