And it has nothing to do with health concerns.

By Mike Pomranz
July 13, 2020
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Before COVID-19, cashless payments were booming due to their convenience for both customers and business owners. But now, some stores are moving away from cash out of necessity—and not just to prevent the spread of coronavirus. America’s largest grocery chain, Kroger, recently announced that cashiers would no longer be giving customers coins as change—a decision made because metal money is simply too difficult to come by.

Over the weekend, Kroger confirmed the new policy in a reply to customers on its official Twitter account. “The Federal Reserve is experiencing a significant coin shortage that is impacting our store operations and ability to provide change,” the grocer wrote. “As a result, the company is implementing a new process for providing change to customers.  In all staffed lanes, coin change owed to the can be applied to your loyalty card and can be used on your next in-store, Pick-Up or Delivery purchase. Alternately, we can round your transaction up to the nearest dollar and donate it to your local foodbank.”

Douglas Sacha/Getty Images

Indeed, back on June 11, the Federal Reserve explained that the pandemic “has significantly disrupted the supply chain and normal circulation patterns for U.S. coin.” Specifically, not only have coin deposits declined, but the U.S. Mint had also temporarily decreased production due to health concerns for its employees. (Production has reportedly returned to above normal levels since.) As a result, “the Federal Reserve’s coin inventory [was] reduced to below normal levels,” meaning fewer coins were being allocated to banks and, from there, heading off to retailers.

So though Kroger may be one of the biggest names to give up on change, they’re far from the only store making a policy switch. For instance, last week, the East Coast convenience store chain Wawa put out a call to customers to either pay with exact change or round up their purchase to the nearest dollar with the excess cents getting donated to their charity, The Wawa Foundation. And according to Philadelphia’s WPVI, one of the area’s grocery chains, Giant, was also no longer accepting cash payments at some locations because they were simply unable to make change. Over the weekend, CBS News even aired a report on the impact the shortage is having on small businesses nationwide.

Meanwhile, returning to Kroger, beyond its eponymous stores, the company also owns over a dozen other grocery store brands including Ralphs and Harris Teeter. It’s not clear whether this change to the company’s change policy applies across all Kroger-owned brands or not. (We’ve reached out to Kroger for the answer and will update if we receive a response.)