By: Justin Hosie and Dailey Wilson, Hudson Cook, LLP
Did you know that it actually costs more than one cent to manufacture a single penny? For years, the federal government spent millions of dollars just to keep this small currency in circulation. As a result, in February of 2025, President Trump directed the U.S. Treasury to stop producing the penny, and on Nov. 12, 2025, the U.S. Mint struck its final penny. This change means the mint no longer produces these coins for daily use. While you can still use the pennies you have in your stores and consumers can still use the pennies in their pockets, banks are gradually removing them from the system. This means that in your cash transactions, you’ll ultimately have to decide how to account for exact cents but exchange money with consumers in five-cent increments. Most businesses are moving to a system called “symmetric rounding.”
How Symmetric Rounding Works
When a customer is asked to pay an amount that isn’t a five-cent increment, this is where a system called “symmetric rounding” comes into play. For example, if a customer wants to make a weekly renewal payment on a 2-piece sectional and the total payment amount is $24.02, how does the transaction work when the penny is gone? While there’s no impact on electronic payments, such as customers paying by card, in a cash transaction, unless the consumer has two pennies, you’ll end up rounding.
The rules for rounding to the nearest five-cent increment are usually as simple as this. For change given to consumers in:
- Amounts ending in .01 or .02 round down to .00
- Amounts ending in .03 or .04 round up to .05
- Amounts ending in .06 or .07 round down to .05
- Amounts ending in .08 or .09 round up to .10
So, if the total is $24.02, and the customer hands you $25.00 in cash, you’d normally return them $0.98 cents. Because the change ends in an 8, using symmetric rounding, you’d round up and hand them $1.00. In this case, the customer would get two cents more than they would if everyone had pennies. Other times, the company will benefit.
This system has been in use in Canada since 2013, and our friends up north report that this system is ultimately fair because it balances out over time. Sometimes you save two cents and other times you pay two cents extra. Because the rounding goes both up and down in equal measure, neither the store nor the customer should lose a significant amount of money in the long run. But, it’s worth talking to your accounting team about the most common cash payments you receive, your current pricing approach, and discussing whether you should reconsider your pricing. For example, if your pricing is structured so that you more often give change in certain increments than others, you should consider the impact. You’ll also want to confirm with your accounting team or legal counsel that this approach is compliant with state law. Some states are passing legislation addressing the issue. Georgia, for example, has codified symmetric rounding in its state law.
The Reality for Your Company
Companies are feeling the effects of this change more than anyone else, but our understanding is that it’s not ultimately a financial concern; it’s a customer service concern. Often your representatives have to explain the new rules to customers who may be annoyed or confused by the price difference. The transition requires patience as everyone gets used to this “new math” at the register. You may also have to spend time updating your training, signage, etc., to explain the lack of pennies.
Digital Tools for a Cashless Shift
You are in luck if you use modern technology to run your business. Anytime you take an electronic payment like ACH, debit card, or credit card, there’s no need for symmetric rounding. You can continue to calculate to the $0.01 increment. In addition, software vendors are stepping up to make this transition easier for everyone, including one offering a “virtual penny tray” that helps customers and companies minimize the overall impact of virtual rounding, so it’s really only felt on the final payment. Other cash register developments are in the works that automatically use symmetric rounding, so representatives do not have to do the math in their heads. As more companies adopt the smart tools, the disappearance of the penny will feel like a much smaller hurdle.
For further reading, including some important FAQs, the US Treasury has issued the following about cessation of the penny: https://home.treasury.gov/news/featured-stories/penny-production-cessation-faqs
