If you take cash, you’re about to run into a problem you’ve never had to think about: how do you make change when there aren’t enough pennies to go around?
The U.S. Treasury stopped producing new pennies for circulation in November 2025 after concluding that each one-cent coin cost nearly four cents to make. Existing pennies remain legal tender and will keep circulating for years, but the supply will only shrink from here. Congress has now stepped in to standardize what happens next: the Common Cents Act passed the House by voice vote on July 14, 2026, and the Senate passed a matching companion bill on August 7, 2026. If it’s signed into law, it would formally end penny production and set a nationwide framework for cash rounding — preempting a growing patchwork of state rules that businesses are already navigating today.
For a business that mostly runs cards and digital wallets, this is a non-event. For a corner store, food truck, salon, or any shop that still handles meaningful cash volume, it’s a real operational change that touches your register, your pricing, your signage, and your staff training.
How the rounding actually works
Under the federal proposal — and under the state laws already on the books in Arizona, Indiana, New Mexico, Tennessee, and Utah — rounding applies only to the final cash total of a transaction, not to individual item prices. The method is what’s sometimes called “Swedish rounding” or nickel rounding:
- Totals ending in 1 or 2 cents round down to the nearest nickel
- Totals ending in 3 or 4 cents round up to the nearest nickel
- Totals ending in 6 or 7 cents round down to the nearest nickel
- Totals ending in 8 or 9 cents round up to the nearest nickel
So a cash total of $19.82 becomes $19.80, and $19.83 becomes $19.85. A total already ending in 0 or 5 cents doesn’t change. Crucially, this only applies when a customer pays with physical cash. Card, debit, check, gift card, and app-based payments are still charged to the exact penny — no rounding, no rule change.
Just as important: under the federal bill, rounding would be voluntary, not mandatory. A business could continue giving exact change as long as pennies are physically available. But as the existing supply thins out over the next few years, “as long as pennies are available” is a shrinking window, and most retailers will find it easier to adopt a consistent rounding policy now rather than scrambling later.
Why this isn’t as simple as it sounds
The National Restaurant Association has been vocal about the stakes here, warning in its advocacy push around the House vote that inconsistent rounding rules could cost restaurants real money — the group has cited estimates that reflexive round-down behavior at the register could add up to roughly $168 million a year in lost revenue industry-wide if businesses aren’t careful about how rounding is applied. That’s the practical risk for any cash-heavy small business: round down out of habit or convenience often enough, and it quietly erodes your margin.
There’s also a compliance wrinkle that catches people off guard: in every state with a rounding law so far, sales tax must be calculated on the original, unrounded total — rounding is only applied at the very last step, to the final amount the customer hands over. If your point-of-sale system rounds before calculating tax, you could end up under-remitting tax without realizing it. Indiana’s law goes further and requires that tax and fee amounts always round down, regardless of the transaction total, which is a different rule than the one applied to the sale itself. If you operate in multiple states, don’t assume the rule that applies in one location applies in another — at least 20 states now have some form of rounding law on the books, and the details genuinely differ.
What to actually do about it
Check your POS software. Ask your point-of-sale vendor directly whether a cash-rounding feature exists or is on their roadmap, and confirm it applies rounding after tax calculation, not before. Most major POS platforms have already started rolling out rounding toggles in response to state laws; if yours hasn’t, ask when.
Decide on a rounding policy now, not later. Pick a consistent method — round to nearest nickel, applied only to cash, only at final total — and apply it uniformly. Consistency is what protects you from both the appearance of overcharging cash customers and the slow bleed of habitually rounding in the customer’s favor.
Train staff on the “why,” not just the “how.” A cashier who can explain in one sentence — “we round cash totals to the nearest nickel now that pennies are being phased out, card payments are unaffected” — will defuse most customer confusion before it starts. Post a small, plain-language sign near the register; several states with rounding laws already require or strongly recommend disclosure at point of sale.
Keep giving exact change if you can. Nothing requires you to round while you still have pennies on hand. If your business handles low cash volume, there’s no urgency to change anything yet.
Watch your state’s specific rules. With more than 55 additional penny-related bills pending across state legislatures, the rules where you operate could tighten, loosen, or change entirely before the federal bill is even signed. The Treasury Department’s penny FAQ and your state revenue department’s guidance are the two places worth bookmarking.
The takeaway
The penny’s disappearance is a slow-motion change, not an overnight one — you won’t wake up unable to make change tomorrow. But the businesses that get ahead of it, by confirming their POS handles rounding correctly, setting a clear policy, and briefing staff before the first confused customer asks “why is my total different,” are the ones who’ll avoid both the compliance headache and the awkward register conversation. If you haven’t asked your payments provider about this yet, that’s the one call worth making this week.
