Congress has finished work on the Common Cents Act, sending the White House a bill that gives American merchants a single federal rule for what to do at the register when there are no pennies left in the drawer. The Senate cleared the measure by unanimous consent on Monday night, September 28, 2026, according to reporting from Retail Dive, Grocery Dive and American Banker. It now awaits President Donald Trump’s signature.
The legislation is narrow in text and large in operational consequence. It authorizes cash transactions to be rounded to the nearest five cents when exact change cannot be provided, leaves electronic payments settled to the exact cent, and formally instructs the Treasury Department to stop producing the one-cent coin. The US Mint had already struck its final circulating cent in November 2025, roughly nine months after Trump directed Treasury to wind the coin down.
For retailers, the important part is not the coin. It is the liability. Since the last cent came off the press, chains operating across state lines have been rounding under a growing collection of state statutes, state revenue-department guidance and, in places, nothing at all. The Common Cents Act is the first attempt to put one rule underneath all of it.
The trade groups that lobbied for it said so directly. “The act provides guidance critical for businesses processing cash transactions as pennies dwindle,” said Brennan Duckett, a director at NACS, the convenience-store association, in comments reported by Retail Dive. Dylan Jeon, vice president of government relations at the National Retail Federation, called the bill “a solution to a real problem for retailers” and said it “provides much-needed consistency for both businesses and consumers.”
In short
- What passed: the Common Cents Act (H.R. 10167, 119th Congress) cleared the Senate by unanimous consent on Monday night, September 28, 2026, and heads to President Trump, who is expected to sign it.
- The rule: merchants may round cash totals to the nearest nickel when exact change is unavailable. Cards, checks and other electronic payments stay settled to the exact cent.
- Why now: the Mint struck its last circulating penny on November 12, 2025, and retailers have been short of pennies ever since, with no uniform legal cover for rounding.
- What it replaces: a state patchwork. Holland & Knight counted 16 states with rounding laws already in effect as of August 2026, plus Missouri and Connecticut on later dates. Arizona is the only state to mandate a specific method.
- The catch: the bill does nothing about the nickel, which now costs more than twice its face value to make, and it does not resolve conflicts with municipal cash-discrimination ordinances.
What the Common Cents Act actually does
The bill does three separate things that are easy to conflate. It sets a rounding framework, it ends penny production as a matter of statute rather than executive direction, and it adds guardrails on how Treasury retires coins in future.
The rounding framework is permissive, not mandatory. It authorizes merchants and financial institutions to round a cash transaction up or down to the nearest five cents where exact change is not available. It does not require any retailer to round, and it does not require any retailer to stop accepting pennies.
The production provision converts an executive decision into law. Trump directed Treasury to halt penny production in February 2025, Treasury placed its final order for penny blanks in May of that year, and the Mint struck the last circulating cent in November 2025. Pennies already in circulation remain legal tender, and the coin continues to be produced for collectors.
The rounding rule at the register
The mechanics matter more than the principle, because point-of-sale systems have to encode them. Under most of the state rounding laws now on the books, cash totals ending in 1, 2, 6 or 7 cents may be rounded down to the nearest nickel, and totals ending in 3, 4, 8 or 9 cents may be rounded up.
Two operational constraints travel with that rule almost everywhere it has been written. Rounding applies to the final transaction total, not to individual line items. And it applies after sales tax is calculated, not before.
That sequencing is what keeps rounding from compounding. A basket of 30 items rounded item by item would drift; a single rounding step on the post-tax total is bounded at two cents in either direction. Retailers that configure this wrongly create a consumer-protection problem rather than solving one.
The exemption for electronic payments is absolute in every version of the rule. Cards, checks, gift cards, mobile wallets and account transfers continue to settle to the cent, because there is no physical change to make.
What the Senate added in August
The bill did not pass in one pass. The House approved an initial version on July 14, 2026. The Senate amended it and passed its version on August 7, which sent the bill back across the Capitol for a second House vote earlier this month. Monday night’s unanimous-consent vote was the Senate’s final action on the reconciled text.
The Senate’s amendment added two provisions. The first requires Treasury to give Congress 60 days’ advance notice before discontinuing any circulating coin, a direct response to the way the penny was retired by directive. The second authorizes the Treasury Secretary to examine a new metals composition for the nickel in order to lower its production cost, with reporting pointing to zinc in place of copper.
Both additions are about the next coin, not this one. Congress watched the penny disappear without a vote and wrote itself back into the process.
Why Congress moved now: the penny ran out before the law did
The sequence here is unusual. Normally a statute precedes the operational change. In this case the coin vanished first and the legal framework followed roughly ten months later.
Mint production data shows how fast the supply turned off. The Mint struck 1,300,400,000 cents in calendar 2025, a decline of 59.7% against the prior year, and the ceremonial final strike took place at the Philadelphia facility on November 12, 2025. Total circulating-coin production fell 11.9% to 4,947,280,000 pieces from 5,613,640,000 in 2024.
Existing stock did not disappear with production. Estimates put roughly 114 billion pennies in circulation in the United States, out of perhaps 240 billion one-cent coins worldwide. The problem is velocity, not volume: pennies sitting in jars and car consoles are not pennies arriving at a cash register.
That is why the shortage bit so quickly. By late 2025, Axios and others were reporting retailers with empty penny slots, convenience stores warning customers not to expect exact change, and some merchants offering gift cards or small freebies in exchange for penny rolls. Cash-intensive formats felt it first and hardest.
How much the penny and nickel cost the Mint
The fiscal case for retiring the penny is straightforward and has been for years. The coin cost more than its face value to produce, and the gap widened sharply.
| Coin | Unit cost, FY2024 | Unit cost, FY2023 | Change | Face value | Cost as multiple of face |
|---|---|---|---|---|---|
| Cent (penny) | 3.69 cents | 3.07 cents | +20.2% | 1 cent | 3.7x |
| Nickel | 13.78 cents | 11.54 cents | +19.4% | 5 cents | 2.8x |
The losses scale with volume. Penny production generated roughly $68 million in losses on about 5.6 billion units in fiscal 2024, and the nickel produced a net loss exceeding $100 million across the roughly 1.2 billion pieces minted. Treasury has estimated annual savings of about $56 million from ending penny production.
Those numbers frame the awkward arithmetic that Congress has now locked in. Retiring the penny saves about $56 million a year. The nickel, which rounding pushes people toward, loses more than that on its own.
What replaces the state patchwork
The federal case for the bill was never mainly fiscal. It was preemption. Retail trade groups wanted one rule because they were already complying with several.
Counts differ depending on when they were taken and what they count. A Holland & Knight analysis published August 10, 2026 identified 16 states with rounding laws already in effect: Alabama, Arizona, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Maryland, Nebraska, New Mexico, Oregon, Tennessee, Vermont, Virginia and Washington. Missouri’s law took effect August 28, 2026, and Connecticut’s takes effect January 1, 2027. Arizona Capitol Times, counting bills passed rather than laws in force, put the figure at 19 states as of July 2026, including Minnesota and Oklahoma.
The Retail Industry Leaders Association made the fragmentation argument explicitly in a September 11 post, warning that some states had legislated, others had issued guidance, and others were still deciding, and that national retailers faced “conflicting requirements or frivolous lawsuits” as a result. That is the same structural complaint retailers raise whenever consumer-facing rules are written city by city, as with the NYC click-to-cancel rule taking effect October 1.
| Approach | Example | Merchant obligation | Method specified? |
|---|---|---|---|
| Discretionary rounding with liability safe harbor | Florida (Ch. 2026-68) | May round; protected from deceptive-trade-practice claims | No, merchant discretion on direction |
| Discretionary rounding | Connecticut, Maryland | May round up or down on the total | No |
| Mandatory prescribed method | Arizona (HB 2938) | Must round when pennies unavailable, using the set table, with point-of-sale notice | Yes, 1/2/6/7 down and 3/4/8/9 up |
| Round down only (proposed) | Michigan (bill) | Would require rounding in the consumer’s favor | Yes, downward only |
| Federal framework | Common Cents Act | May round cash to nearest nickel when exact change unavailable | Permissive |
Arizona’s mandate versus Florida’s safe harbor
The two poles of the state patchwork show what a federal rule has to reconcile. Arizona House Bill 2938, signed by Governor Katie Hobbs and effective March 12, 2026, is the only state law to mandate the Canadian-style method. It also requires businesses that round to post a visible notice at the point of sale.
Florida took the opposite approach. Chapter 2026-68 makes rounding discretionary and, critically, shields merchants who round from liability under the state’s deceptive and unfair trade practices act. It solves the legal exposure without dictating register behavior.
A national chain operating in both states cannot run one configuration and one signage policy. It has to detect state, apply the local rule, and in Arizona print the disclosure. That is the compliance cost the Common Cents Act is meant to compress.
Where municipal cash-discrimination rules still collide
The Common Cents Act does not clear every conflict, and the sharpest remaining one is local. Holland & Knight flagged cities including Miami, New York, Philadelphia, San Francisco, Detroit and Washington, DC, where cash-discrimination ordinances may prohibit the upward rounding that a state rounding statute permits.
The tension is real if narrow. An ordinance that requires cash customers to be charged no more than card customers sits uneasily with a rule that rounds a cash total up by two cents. Holland & Knight advised retailers in those jurisdictions to take counsel on alternatives rather than assume the state rule controls.
Whether federal legislation preempts a municipal cash-discrimination ordinance is unsettled, and nothing in the reported text resolves it. Retailers in those six cities should expect to keep operating a local exception.
Who pays for rounding: the Richmond Fed arithmetic
Rounding is often described as a wash. Research from the Federal Reserve Bank of Richmond argues it is not, for a reason that has nothing to do with intent.
In an economic brief published in July 2025, Zhu Wang and Russell Wong examined 3,559 cash transactions drawn from the 2023 Diary of Consumer Payment Choice, a survey of 4,671 participants. Their finding is that cash transaction totals are not uniformly distributed across cent endings. They skew toward values that round up.
“At first glance, the net effect of rounding might appear neutral,” the authors wrote. “However, if transaction amounts are skewed toward values that round up, consumers end up consistently paying more.”
The magnitudes are small in aggregate. Wang and Wong estimated the cost to US consumers at roughly $6.06 million a year from penny elimination alone. If the nickel were eliminated as well, and rounding moved to the nearest dime, the estimate rises to about $55.58 million a year, more than nine times higher.
Two things follow. First, the consumer cost of penny rounding is roughly a tenth of the $56 million Treasury saves by not minting the coin, so the public-finance trade is favorable. Second, the cost is highly non-linear in the size of the rounding increment, which is the argument against ever retiring the nickel without more thought.
There is also a distributional point the aggregate hides. Rounding falls only on cash payers, who skew lower-income and older, and who are already the cohort most exposed when pricing rules change. That is the same fairness question that surfaced when Australia banned card surcharges from October 1 and moved roughly A$1.8bn of surcharge revenue into shelf prices.
Why the skew exists at all
The asymmetry Wang and Wong found is a pricing artifact, not a rounding artifact. It originates in how retailers set shelf prices.
Prices ending in 9 are ubiquitous, and sales tax applied to a basket of 9-ending prices does not distribute the final cent evenly. The resulting distribution of post-tax totals clusters at particular cent endings, and those clusters do not sit symmetrically around the rounding midpoints.
The practical implication is that the skew varies by state and by basket. A no-sales-tax state produces a different distribution of cent endings than a state with a 9.5% combined rate, and a single-item convenience purchase produces a different distribution than a 40-item grocery basket.
That is why the aggregate figure is small and the per-format figure is unknown. No retailer can assume its own rounding variance will net to zero without measuring it, which is the argument for treating the variance as a tracked reconciliation line from day one.
What Canada’s phase-out tells US retailers
The United States is not running an experiment. Canada retired its cent more than a decade ago, and the template the US state laws borrowed is Canadian.
The Royal Canadian Mint ended penny production on May 4, 2012. The Finance Minister announced the transition date on July 30, 2012, and distribution to financial institutions ceased on February 4, 2013. Ottawa estimated taxpayer savings of CAD 11 million a year (about USD 7.8 million at the September 30, 2026 rate of CAD 1 to USD 0.70506).
| Dimension | Canada (2012–2013) | United States (2025–2026) |
|---|---|---|
| Production ended | May 4, 2012 | November 12, 2025 (final circulating strike) |
| Distribution/transition date | February 4, 2013, announced 6 months ahead | No single announced transition date |
| Unit production cost at retirement | 1.6 cents per cent | 3.69 cents per cent (FY2024) |
| Estimated annual government saving | CAD 11m (about USD 7.8m) | About USD 56m (Treasury estimate) |
| Rounding guidance | National, issued with the transition date | State by state first, federal framework second |
| Rounding base | Final bill after GST/HST, cash only | Final total after sales tax, cash only |
The instructive difference is sequencing, not substance. Canada set a transition date six months in advance and published rounding guidance alongside it, so merchants configured systems once against one national rule. The US ended production first and is legislating the rule afterward, which is why chains spent 2026 tracking state bills.
Canadian practice also settled the accounting question that US finance teams are now asking. Rounding gains and losses flow through the merchant’s net income, and over a large enough transaction count the net effect approaches zero. It is a reconciliation line, not a revenue strategy.
Which retail formats feel this first
Exposure to the rounding rule is a function of cash mix, and cash mix varies enormously by format. Cash accounted for 14% of all US consumer payments by number in 2024, according to the Federal Reserve’s Diary of Consumer Payment Choice, against 35% for credit cards and 30% for debit.
That average conceals the concentration. Consumers averaged seven cash payments per month in 2024, a figure unchanged since 2020, and nearly 80% of consumers have held cash on at least one day of the survey month in every Diary since 2018. Cash has not gone away; it has narrowed to particular baskets and particular formats.
Convenience stores, quick-service restaurants, independent grocers, laundromats, vending operators and transit retail carry cash shares well above the national average. That is why NACS and the National Grocers Association were among the loudest voices for the bill. Stephanie Johnson, senior vice president of government affairs at the NGA, said the measure delivers “clear rules and helps minimize confusion for consumers.”
The systems work is uneven too. Tier-one chains push a rounding configuration through a central point-of-sale build; independents wait for a vendor patch. That gap between corporate and franchise estates is the same one that governs how fast the Sunrise 2027 barcode transition lands on scanners, and it will pace rounding compliance the same way.
The cost of handling a coin nobody wants
The penny’s production cost is the number that gets quoted, but it was never the number that moved retailers. Their cost is handling.
A cash-intensive store pays to order penny rolls, to receive and store them, to count them into drawers, to count them back out at close, and to have an armored carrier move them. Those costs are per-roll and per-stop, and they are indifferent to the fact that a roll of pennies carries 50 cents of value.
Canada made exactly this argument when it retired its cent, citing the handling burden the coin imposed on retailers, financial institutions and the wider economy alongside the production loss. The Common Cents Act removes that line item permanently for merchants that choose to round.
The offset is nickel handling, which rises. A store that previously broke a nickel into pennies now needs more nickels, and nickels are heavier and more expensive to move per dollar of value than dimes or quarters. The net logistics saving is real but smaller than the penny line suggests.
What retailers should change before the signature
The bill is not law yet, and the reported coverage does not specify an effective date. That argues for preparation rather than deployment.
The first task is an inventory. Retailers need to know, per state, whether they are currently rounding, under what authority, with what method, and whether any location is posting a required notice. Firms that pushed a single national configuration in 2026 may be out of compliance in Arizona today.
The second is the register logic itself. Rounding must sit on the post-tax total, once, with the electronic-payment path untouched. Any implementation that rounds line items, rounds pre-tax, or lets rounding leak onto card tenders is a consumer-protection exposure regardless of what the federal statute permits.
The third is disclosure and training. Cashiers are the people who will explain a two-cent difference to a customer, and the complaint volume in the first weeks of any rounding regime lands at the register, not at headquarters.
The fourth is reconciliation. Finance teams should expect a small rounding variance line in cash-drawer reconciliation and should decide in advance whether it books to shrink, to other income, or to its own account. Auditors will ask.
None of this is expensive. It is the ordinary cost of a payments rule change, in a year that has produced several of them, from surcharge bans abroad to the long-running domestic fight over card fees where swipe-fee relief still looks unlikely for US merchants in 2027.
The nickel problem Congress did not solve
The Common Cents Act pushes cash transactions toward the nickel, and the nickel is in worse fiscal shape than the penny ever was.
At 13.78 cents in fiscal 2024, the nickel cost 2.8 times its face value, and Richmond Fed researchers put nickel-related losses at $17.7 million for that year. Unlike the penny, the nickel is now the denomination the rounding rule actively increases demand for.
The Senate’s amendment acknowledges this without fixing it. Authorizing the Treasury Secretary to explore a cheaper metals composition, reportedly substituting zinc for copper, is a study provision. It changes the coin’s cost only if Treasury acts and the economics work.
The 60-day notice requirement is the more consequential piece. It means the next coin retirement cannot follow the penny’s path, and it gives retailers and the armored-carrier industry a minimum planning window that they did not get this time.
What to watch next
Four things determine how this plays out over the next two quarters. The first is the signature itself, expected in the coming weeks, and whether the enrolled text carries an effective date or applicability provision that the current reporting has not surfaced.
The second is preemption scope. If the federal framework is permissive rather than mandatory, Arizona’s mandate and Michigan’s proposed round-down-only approach may survive alongside it, in which case the patchwork narrows but does not close.
The third is the municipal collision. The six cash-discrimination cities are the test case, and the first enforcement action or advisory opinion in any of them will tell retailers far more than the statute does.
The fourth is the nickel. Treasury’s composition study, if it happens, is the leading indicator of whether the US repeats this exercise with a five-cent coin, and whether the next rounding increment is a dime. That would move the consumer cost from roughly $6m a year to roughly $56m on the Richmond Fed’s own numbers.
All four sit in the same policy lane retailers have been watching all year, in which pricing and payment mechanics are being rewritten by legislatures and city councils rather than by markets. The Seattle vote on a surveillance pricing ban was the same pattern at the municipal level, and the direction of travel is more rules about how a price is formed, not fewer.
FAQ
Has the Common Cents Act become law?
Not yet. The Senate passed it by unanimous consent on Monday night, September 28, 2026, completing congressional action, and it has gone to President Trump. Reporting from American Banker and the ABA Banking Journal indicates he is expected to sign it in the coming weeks.
Does the bill force retailers to round cash transactions?
No. As reported, the framework is permissive: it authorizes rounding to the nearest five cents when exact change is not available, and provides legal cover for merchants who do so. It does not compel rounding, and it does not stop anyone from accepting pennies.
How does the rounding actually work at checkout?
Under most state rounding laws, cash totals ending in 1, 2, 6 or 7 cents may round down to the nearest nickel, and totals ending in 3, 4, 8 or 9 cents may round up. Rounding applies once, to the final total after sales tax, not to individual items.
Are card and online payments rounded too?
No. Every version of the rule, state and federal, exempts non-cash payments. Credit cards, debit cards, checks, gift cards and mobile wallets continue to settle to the exact cent, because no physical change is involved.
Are pennies no longer legal tender?
Pennies already in circulation remain legal tender and can still be spent. What ends is production of the coin for circulation: the Mint struck its final circulating cent on November 12, 2025, and the bill converts that into statute. The cent continues to be produced for collectors.
How many states already have rounding laws?
Counts vary by cutoff. Holland & Knight identified 16 states with laws in effect as of August 2026, with Missouri effective August 28, 2026 and Connecticut effective January 1, 2027. Arizona Capitol Times counted 19 states that had passed rounding bills as of July 2026.
Will rounding cost consumers money?
A small amount in aggregate. Federal Reserve Bank of Richmond researchers Zhu Wang and Russell Wong estimated roughly $6.06 million a year across US consumers from penny rounding, because cash totals skew toward endings that round up. They estimated about $55.58 million a year if the nickel were also retired.
Does the bill do anything about the nickel?
Only indirectly. The Senate amendment authorizes the Treasury Secretary to examine a cheaper metals composition for the nickel, reportedly using zinc instead of copper, and requires Treasury to notify Congress 60 days before discontinuing any circulating coin. The nickel cost 13.78 cents to produce in fiscal 2024.
Who sponsored the legislation?
Representatives Lisa McClain (R-MI) and Robert Garcia (D-CA) led it in the House, and Senators Cynthia M. Lummis (R-WY) and Kirsten Gillibrand (D-NY) in the Senate. It was backed by NACS, the National Retail Federation, the National Grocers Association, the Retail Industry Leaders Association and the American Bankers Association.