NewsNational

Actions

Banks offering cash for coins amid shortage caused by COVID-19 pandemic

The move comes as the country suffers from a coin shortage
Banks offering cash for coins amid shortage caused by COVID-19 pandemic
Posted at 11:15 AM, Jul 30, 2020
and last updated 2020-08-03 09:05:55-04

It's said a penny saved is a penny earned. But a penny exchanged with a 10% return rate is a financially friendly investment.

From the Texas panhandle to southeast Wisconsin, banks across the country are launching coin buyback programs amid a nationwide shortage.

"We just wanted to be prepared to take care of all of our customers and not leave them short," Erik Schrader of Amarillo National Bank said.

Schrader says anyone can bring in up to $5,000 in coins to Amarillo National locations and swap them for 10% more in cash. So far, he says the trade-off is paying off for both people and banks.

"I've never seen a coin shortage. We have had lows throughout time, but never anything we thought was a problem," he said. "But luckily, we were able to get out ahead of this."

Some customers aren't even looking to cash in. Neil Buchanan of Community State Bank in Wisconsin says many customers are simply exchanging the coins for bills and not taking the 5% incentive.

"We've had a lot of people come in and say, "No, no. I don't want the bonus. I just heard that there was a problem. I have this coin. I want to be part of the solution.,'" he said.

Economic experts say the coin shortage is linked to the pandemic.

"There was a decline in supply of coins by the mints and there was an increase in demand for the coins as we all got back to getting the groceries," said Kishore Kulkarni, Ph.D., a professor of economics at MSU Denver.

Kulkarni said countries around the world have suffered from coin shortages before, and while these types of coin buyback programs do help the economy, more transactions in the future will require less exact change.

"We are in a cashless society already, and we will be more so moving forward," Kulkarni said.

Moving forward financially, Amarillo National Bank will continue exchanging coins for cash through Sept. 1. Community State Bank has received so many coins that it ended its buyback program.