You’ve seen the signs. They were everywhere at CVS, Kroger, and the local gas station during the pandemic. "Please use exact change." "Card only." At the time, everyone called it a coin shortage. But if you look at the Federal Reserve’s actual data, the coins didn't just vanish into thin air. They were stuck. People stopped going out, stopped dumping jars into Coinstar machines, and stopped breaking twenties for a pack of gum. This brings us to a fascinating, often misunderstood concept in the world of currency and legislation: the idea of change as a bill—or more accurately, the legislative and economic push to rethink how we handle the physical metal in our pockets.
Money is weird.
Most people think of a five-dollar bill as "real" money and the handful of pennies in their cup holder as a nuisance. But to the U.S. Mint and the Department of the Treasury, every single cent is a line item on a balance sheet that is increasingly hard to justify. When we talk about change as a bill in a legislative sense, we are looking at the constant tension between the cost of production and the utility of the currency.
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The Brutal Math of Making Money
Let’s get real about the penny. According to the United States Mint 2023 Annual Report, it currently costs about 3.07 cents to make a single penny. Read that again. We are spending over three cents to manufacture one cent of value. The nickel isn't doing much better, costing about 11.5 cents to produce.
This isn't just a "fun fact" for trivia night. It’s a massive logistical headache that has led to several attempts at introducing a "change as a bill" style of legislation, specifically aimed at metal composition or even the outright elimination of low-denomination coins.
Why do we keep doing it?
Tradition. Lobbying. Honestly, it's mostly the zinc lobby. The Americans for Common Cents, a group funded largely by Jarden Zinc Products (the company that sells the coin blanks to the Mint), has spent decades fighting to keep the penny alive. They argue that eliminating the penny would lead to "rounding up" at the register, which they claim acts as a hidden tax on the poor.
But economists like Robert Whaples have countered this for years. His research suggests that rounding to the nearest nickel is actually a wash for consumers. Sometimes you lose two cents, sometimes you gain two cents. Over a year of transactions, it basically zeros out. Yet, the emotional attachment to "change" remains a massive barrier to any bill that would modernize our physical currency.
When "Change" Becomes Digital
There is a secondary way to look at change as a bill: the transition of physical coins into digital credits. You might have noticed this at certain retailers recently. Instead of giving you 43 cents back in heavy metal, the point-of-sale system asks if you want to "round up" for charity or, increasingly, if you want that change sent to a digital loyalty app or a gift card.
This is the "Change as a Bill" movement in practice, even if it hasn't been codified into a single federal mandate yet.
Retailers love this. Handling cash is expensive. You have to count it, bag it, insure it, and pay an armored car service like Brink's or Loomis to take it to the bank. If a store can convince you to turn your physical change into a digital "bill" or credit, they save on labor and bank fees.
The Hidden Logistics of the Coin Supply Chain
Most people assume the Federal Reserve just prints money and it stays in circulation forever. It doesn't. Coins have a "velocity." They are supposed to move from the Mint, to the Fed, to your local bank, to the retailer, to your pocket, and then—critically—back to the bank.
During the 2020-2022 period, that circle broke.
The U.S. Coin Task Force was literally created because the "circular flow" of coins stopped. People weren't spending cash, and banks weren't receiving deposits. The coins were sitting in couches. This is why the idea of "change as a bill" (treating small denominations as digital entries rather than physical objects) started gaining steam in fintech circles.
The Coinage Act and the Future of Your Pocket
Every few years, a bill is introduced in Congress to change the composition of our coins to cheaper metals. The Coin Metal Modification Authorization and Cost Savings Act is the recurring character in this drama. The goal is simple: give the Mint the authority to use cheaper materials (like steel instead of nickel and copper) to save the taxpayers hundreds of millions of dollars.
It sounds like a no-brainer. But then you hit the "Vending Machine Wall."
The vending industry, represented by groups like the National Automatic Merchandising Association (NAMA), goes into a frenzy every time this comes up. Why? Because every single vending machine, laundromat, and parking meter in the country uses sensors to detect the weight and electromagnetic signature of a coin. If you change the "bill" of materials for a quarter, you break millions of machines.
The cost to retrofit those machines often exceeds the savings the government would see from the metal change. It’s a stalemate. We are stuck with expensive, heavy, outdated metal because our infrastructure is literally built around it.
Why We Can't Just "Go Digital"
You might think, "Just kill the coins and use Apple Pay."
It’s not that simple. Honestly, it’s a matter of equity. According to the FDIC National Survey of Unbanked and Underbanked Households, roughly 4.5% of U.S. households (about 5.9 million) are unbanked. These people rely entirely on physical cash. If we move toward a "change as a bill" system where small denominations only exist in digital wallets, we effectively lock millions of people out of the economy.
This is why cities like Philadelphia and San Francisco have actually passed laws banning cashless stores. They recognize that while digital change is efficient for the wealthy, it's a barrier for the poor.
Practical Insights: Managing Your "Change"
If you're tired of the jar on your dresser and want to treat your change like the "bill" it actually is, you have to be tactical. The days of just handing a clerk a bag of pennies are mostly over—they'll hate you, and half the time, the machines are broken.
- The Coinstar Hack: Most people hate the 11-12% fee Coinstar charges. But here's the trick: if you opt for a gift card (like Amazon or Starbucks) instead of cash, the fee is usually 0%. You get 100% of your "change as a bill."
- Self-Checkout Sinks: If you really want to get rid of physical change without a fee, use the self-checkout at a grocery store. Most of them have a "coin bowl" rather than a single slot. You can dump a handful of mixed change in there, and the machine counts it instantly. It’s the fastest way to turn metal into a digital deduction from your total.
- The "Round Up" Trap: Be careful with apps that "round up" your change into investments. While great for saving, some charge a monthly subscription fee (like $3/month). If you’re only rounding up $5 worth of change a month, that fee is eating 60% of your investment. Only use these if your transaction volume is high enough to make the fee negligible.
Moving Toward a Hybrid Economy
The reality of "change as a bill" is that we are heading toward a bifurcated system. Large transactions will stay digital. Small transactions will likely stay cash-based for the foreseeable future, but the composition of that cash is going to have to change.
We are likely to see the penny phased out within the next decade—not because of a grand conspiracy, but because it simply isn't worth the copper it's printed on. When that happens, the "nickel" will become the new "penny," and our mental math at the grocery store will have to shift.
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Until then, treat your change with a bit more respect. It's not just metal; it's a tiny piece of a massive, struggling logistical machine that costs the taxpayer millions to maintain.
To make the most of your physical currency right now, stop hoarding it. The "coin shortage" wasn't a lack of supply; it was a lack of movement. Taking your jar to the bank or using it at a self-checkout actually helps stabilize the local supply chain and reduces the need for the Mint to strike more high-cost coins.
Turn your metal back into "bills" by getting it back into the system. It’s better for your wallet, and it’s better for the economy. Each time you use exact change, you're essentially opting out of a broken system that loses money every time a new penny is born. Keep your transactions fluid, and don't let your "bills" gather dust in a jar.