The restaurant industry has a penny problem.
That’s according to the National Restaurant Association, which issued a notice this week imploring federal officials to address issues related to the nationwide penny shortage.
The United States stopped minting pennies on November 12, but it remains legal tender throughout the United States. That poses some problems for the $1 trillion restaurant industry, where more than a quarter of transactions are paid in cash.
Generally speaking, when operators are unable to provide accurate change, it can cause confusion at the point of sale, according to the National Restaurant Association
The organization is pursuing two solutions:
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Urges the U.S. Treasury Department, the Federal Reserve, and the coin supply chain to work together to ensure pennies circulate across the country.
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Federal legislation enacts rounding rules nationwide, providing a safe harbor for restaurant operators to process transactions when they cannot find exact change.
“When operators are unable to provide accurate change, it creates friction at checkout and leaves customers frustrated,” said Michelle Korsmo, president and CEO of the National Restaurant Association.
“In a highly competitive industry like restaurants, any change in the way customers expect to be served could mean lost return sales for the operator.” Currently, many restaurant operators are rounding off returns without making the right changes.
However, long-term rounding could cost restaurant operators about $13-14 million per month, officials said, adding that in an industry with low pre-tax profit margins of 3-5%, rounding due to a lack of funds will start to cut into operators’ profitability.
Cosmo asked Fed and Treasury leaders to help alleviate the penny shortage by reopening the penny order and deposit systems.
“This will help keep one penny in circulation while the association works with Congress to pass legislation that provides national rounding guidance to all businesses and provides a safe harbor for restaurants and business owners when they need to round because they are unable to provide exact change,” he said.
Officials have asked Finance Minister Scott Bessent to issue interim rounding guidance to provide a degree of certainty and consistency for restaurateurs and their customers while the exact changes are unavailable.
“Congress is working on legislation that provides long-term solutions, and the association is coordinating closely with bill sponsors to ensure it incorporates industry priorities,” a release said.
“If passed, this legislation will protect small business owners from potential liability, streamline transactions, and reflect the realities of a post-penny economy.”
Read the original article at mlive.com.