Rolling $800 in loose change into individual paper coin wrappers is not typically a service offered at Rippy’s Liquor & Marketplace. But amid a national coin shortage, owner Richard “Rippy” Serra was forced to come up with new ways to rake in the change.
Among them: offering free coin rolling to customers, advertised through signs in the windows of the Charlestown liquor and grocery store. So far, it’s paying off, with at least a dozen customers exchanging their coins for dollar bills, keeping Serra’s cash registers and safe flush with change.
The more coins flow in, the less Serra has to worry about running out – a serious fear when the Federal Reserve announced in June it would begin limiting allocation of coins to banks and credit unions across the country. The move was intended to help recirculate the existing inventory of coins, which had slowed since the onset of the coronavirus pandemic as a result of a shift in consumer spending habits – fewer people were out spending money at stores, and those still buying were largely using credit and debit cards over cash to limit potential spread of the virus. Compounding the shortage, the U.S. Mint was temporarily making fewer coins amid workplace-safety changes, the Fed said in a statement.
‘If anything, this has created an awareness of the need for coins.’
AMY U. ARRUDA, The Washington Trust Co. senior vice president of retail banking
While the shortage is not actually a lack of coins, but rather a circulation problem, local businesses and the banks that service those businesses still were worried about running out, keeping close tabs on their coin supply and encouraging customers to empty their pockets and piggy banks.
The Washington Trust Co. is among the depository institutions that have seen its federal coin distribution slashed, according to Amy U. Arruda, the bank’s senior vice president of retail banking. The shortage has not become dire, but Arruda worried about the potential implications for customer transactions, as well as business owners such as Serra who purchase coins to keep their registers stocked.
“Essentially, we’re the waitress,” Arruda said of the bank’s role as an intermediary in coin distribution between the Federal Reserve and customers. “If the cook stops making it, we’re passing that on to the people we serve.”
Small businesses and those in cash-reliant industries such as liquor stores and laundromats have disproportionately borne the brunt of the disrupted coin market, as well as people who are “underbanked” or “unbanked,” meaning they don’t have access to credit and banking services – about 22% of households nationally, according to the Federal Reserve.
Ed Browning, owner of Midway Laundry Inc., felt fortunate to have escaped the shortage relatively unscathed. While his North Providence laundromat relies on coins to operate its 46 machines, he has not lost business or coins since reports of dwindling supplies.
The only difference for Browning has been an uptick in people trying to use his coin machine to turn their cash into change, without doing any laundry.
“We really have to keep eyes on the coin machine now,” he said.
The Federal Reserve’s limit on coins was intended to recirculate those already in the market, but it hasn’t necessarily worked as intended. Much like the shortages of toilet paper at the start of the pandemic, reports of coin shortages have, in some cases, caused consumers to cling to their spare change even tighter.
To combat this, Webster Bank has made it a point to educate its customers, encouraging them to deposit coins to not prolong the shortage, according to Grace Pereira-Shelley, the bank’s senior vice president and East region executive. The combination of education, coin machines in its branches and the fact that lobbies remained open by appointment through the pandemic positioned the bank well to keep its coin supply flowing, Pereira-Shelley said. Still, the shortage has forced the bank to strategize when sending out its reduced coin supply, targeting the branches with more transactions and business customers.
When the shortage will end is unclear. While the Fed recently upped its coin allocation to depository institutions as of Aug. 31, it warned that unless coin deposits increase, it would need to lower its allocation again in September.
Peter Nigro, Sarkisian chair of financial services at Bryant University, doesn’t think consumers would truly begin spending coins again in earnest until the pandemic ends and they feel safe to return to stores. However, he thinks the disruption could also expedite the transition to a cashless society, having shown the havoc wreaked by an antiquated reliance on change.
Arruda disagrees.
“If anything, this has created an awareness of the need for coins,” she said, adding that she did not think change would be gone for good anytime soon.
Serra, who has owned his store for 38 years, also could not imagine a day when he would not be doling out change to customers. Cash and coins are still indispensable at his business.
“Keeping your customers happy is the main thing,” he said. “And that makes my employees’ jobs easier, too, since they don’t have to deal with customers causing a scene.”
Nancy Lavin is a PBN staff writer. Contact her at Lavin@PBN.com.
