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Free drinks, store credit and cries for help: How we're handling the coin shortage

Samantha Masunaga, Los Angeles Times on

Published in Business News

Susie Shannon, executive director of Poverty Matters, a Los Angeles group that advocates for homeless people, said one of her clients has a lot of change saved up and now tries to carry a lot of it in her purse to pay in exact change because she doesn't have a credit or debit card. Store credit is worthless if you don't go back to that store to use it.

"Anything where you need coins in order to buy groceries, in order to do your laundry, it's going to create a lot of stress among a population that's already dealing with a lot," she said. "It's now become the norm that people have debit cards or credit cards ... . A whole segment of our society is completely overlooked."

During a recent shopping trip to a Smart & Final in the San Fernando Valley, Michael Knapp's total bill came to $36.75. He paid $40 in cash, which he always uses because he doesn't have a credit or debit card. He had hoped to get the change in quarters so he could use them to do laundry, but store employees told him they could not give him even one.

In the past, "quarters were always something you could find," said Knapp, 64.

Knapp ended up getting the change in store credit. He said he's not sure what he'll do if the coin shortage continues. As for his laundry, he happened to wash a lot of clothes right before the shortage, so he's OK -- for now.

This isn't America's first coin shortage.

 

One notable one was during the Civil War, when Americans hoarded coins out of fear, as well as concerns about the value of newly introduced paper money, according to the publication Coin World. Congress then passed a law allowing people to use postage stamps as currency, which subsequently led to a run on post offices, said Rebecca Spang, professor of history at Indiana University, where she teaches courses on the history of money.

Stamps at the time had adhesive backs, making it more likely that they stuck together in a wallet. So months later, the U.S. government started printing what's known as postal currency -- a bill-shaped paper smaller than a business card that had an image of a stamp, along with the denomination.

That coin shortage lingered for decades, largely ending by the 1890s, Spang said. Others followed from time to time, including one in the 1960s caused by surges in demand.

The effect of the current coin shortage on businesses has varied. At a McDonald's in Pomona, drive-through wait times have occasionally increased when employees have to take time to inform each customer that the restaurant is out of nickels. Kroger-owned grocery stores, including Ralphs and Food 4 Less, now give customers the option of loading change onto loyalty cards if no coins are available. They also invite customers to round up to the nearest dollar and donate the extra to charity.

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