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I've been noticing lately that a lot of restaurants and retail stores in the US have signs on the registers saying there is some kind of shortage of coins right now and they are limited in how much change they can make.

What's going on to cause this? Is it related to COVID somehow?

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According to this article in Forbes, the problem is not really a lack of coins, but mainly a slow-down in retail transactions.

One particular issue is the reduction in business at places that have a major role in collecting coins from consumers and returning them to the banks,

[Columbia business school assistant professor Yiming] Ma says businesses that primarily take coins, such as laundromats, vending machines and car washes, likely stopped operating during the pandemic due to social distancing and stay-at-home measures. These businesses are usually key components in getting coins back to banks to redistribute back into the economy. Since they weren’t receiving coins, the flow of them back into the economy has been significantly reduced.

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  • That does not seem like a reasonable answer. First, because (at least in my experience) laundromats and car washes only take quarters, so it wouldn't affect other coins. Second, even if those businesses aren't operating, you'd expect the proprietors to have collected any coins in the machines, and deposited them in banks, while the people who'd normally use the coins there would use them at the grocery store instead.
    – jamesqf
    Jul 28, 2020 at 1:24
  • @jamesqf, I expect most people use plastic at the grocery store.
    – The Photon
    Jul 28, 2020 at 1:26
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    It feels like Forbes focused so much on getting expert opinion that they omitted spending time on providing back story. I suspect that the author of the Forbes article inadvertently assumed readers have already read about the coin shortage in other news outlets and were asking for expert opinion. I suggest reading Kroger's Tweet and the Federal Reserve's Statement before reading the Forbes article.
    – Brian
    Jul 28, 2020 at 15:26
  • @The Photon: Some people do, others don't. (My usual grocery store doesn't even accept credit cards, just EBT.) The question, though, is why behavior should have changed significantly. And why the velocity of circulation should matter, since at any velocity the amount in logically should equal the amount out. It would seem there must be some sort of sink, such as lots of people suddenly deciding to save large jars of coins.
    – jamesqf
    Jul 28, 2020 at 16:12

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