Leawood, Kansas – 11/21/2025: On November 12, 2025, the U.S. Mint struck its final penny for general circulation after more than 230 years of production. The cessation of penny production marks a historic change for U.S. coinage and recognizes that the penny is viewed as outliving its economic usefulness. Minting a one-cent coin costs 3.69 cents, yet it is only worth one cent. Though production has stopped, pennies already in circulation, numbering in the hundreds of billions, remain legal tender. The “last” pennies minted in November have special collector strikes with an Omega mark and will be auctioned. Treasury officials say retiring the penny saves about $56 million a year in production costs.
As for consumer commerce, many retailers are expected to round cash transactions to the nearest nickel once penny supplies dwindle, which is a strategy similar to other countries who have had their low-denomination coins phased out. With respect to that effort, several states have laws that may impact rounding techniques particularly done only for cash transactions. Rounding probably will not impact the purchase of gift cards, which are usually bought in even dollar denominations.
As for the gift cards themselves, many believe the penny’s retirement is unlikely to affect the complex web of compliance requirements governing issues of consumer protection, unclaimed property, anti-money laundering, GAAP accounting, and the like. Most of these frameworks operate independently of physical coinage and rely instead on statutory definitions, digital accounting systems, and financial reporting rules that remain intact.
However, the change may impact or influence the approaches to the laws that require card issuers to pay cash-out to consumers when the balance of a gift card falls below a statutory amount. In debates over the meaning of the word “cash” in such laws, some currently argue that card issuers should be permitted to perform cash-out functions via the use of modern cash-like electronic remittances to the consumer instead of forcing the card issuer to remit in physical U.S. dollar bills and coins. Forcing a card issuer to remit actual pennies to consumers makes little sense when the penny no longer exists as minted coinage. And, in the absence of pennies, making the card issuer round up to the nearest nickel when complying with the cash-out laws would improperly increase the value of the gift card. We will keep you updated on what implications may exist for retailers and card issuers in those states that require cash-out on gift cards.
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