Key takeaways

• The last U.S. penny was minted in November, although about 250 billion are still in circulation.

• Cash purchases now round the final total to the nearest five cents; electronic payments are not rounded.

• Some states could issue new regulations on how rounding should occur.

With penny production halted, many in‑person cash purchases now round the final amount due (after taxes, fees, and discounts) to the nearest five cents, while card and digital payments remain exact to the cent.

In November, the U.S. Mint stopped producing new pennies, ending more than two centuries of minting the one‑cent coin.¹ The decision followed years of rising production costs — each penny costs about 3.69 cents to make and distribute, leading to an $85.3 million loss for the Treasury in 2024.² 

Many Americans (52%) say cash is king and carry an average of $66 in cash, according to Empower research, so they might be happy to know that the roughly 250 billion pennies still out there remain legal tender and will circulate for years.³

For household finances, the real change shows up at the register. As cash drawers shift toward nickels and dimes, more in‑person cash purchases are set to round the final total — after taxes, fees, discounts, and any pre‑added tips — to the nearest five cents, while card and digital payments continue to clear to the exact cent.⁴ Some states could issue new regulations on how rounding should occur, but as of now, no new laws have been introduced.⁵

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What changed — and why it matters for money

Ending production of the penny removes a coin that cost more to make and handle than its face value, and it trims time at checkout. The practical money question is at the register: when the lowest coin in circulation is now five cents, how do totals land?

The answer: Only cash transactions round, and they round on the final amount due (after sales tax, service fees, discounts, and any tips added before payment). This approach keeps pricing, advertised offers, and tax calculations intact — the adjustment applies solely to the amount of coin change exchanged.

The new checkout math

A symmetric rounding rule could be applied to the final total, a method Canada adopted after eliminating its penny in 2012:⁶

• 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

Examples (cash only):

• $12.01 → $12.00

• $8.04 → $8.05

• $15.06 → $15.05

• $27.09 → $27.10

Keep in mind, rounding depends on the payment method: Credit/debit card, tap-to-pay, and mobile wallet purchases are not rounded. The account is charged to the cent.

Read more: How to manage a windfall

Where rounding shows up — and where it doesn’t

Rounding could show up primarily on cash transactions:

• In-person cash payments at stores, cafés, and restaurants

• Cash tips included before paying (the tip becomes part of the final amount that gets rounded)

• Returns/refunds on cash purchases

Non-cash transactions typically are exact to the cent and not rounded in these cases:

• Card and digital payments

• Online orders (even if picked up in person)

• Gift cards purchases and redemptions

• Invoices and subscriptions (billed exactly as priced)

• Returns/refunds on card purchases

For split transactions (part cash, part card), rounding will typically only be applied to the cash portion of the payment. For example, if $20.03 is due and $10 is paid in cash, then $10.03 will be charged to the card.

Will rounding raise costs?

Across many purchases, the pluses and minuses tend to offset. Rounding happens on totals, not on each item — a key protection against systematic “round-up creep.” ⁷ For households that mostly pay by card or mobile wallet, nothing changes. Cash-heavy budgets may notice the occasional nickel swing, but over time the effect is typically negligible for mixed baskets.

Restaurants and tips

Some other situations, such as when providing a tip at a restaurant, the loss of the penny could make a slight impact. For any tips added to a check before paying cash, the total, including the tip, will be rounded. Cash tip jars won’t be affected since they are voluntary cash contributions.

Example:

Meal and tax = $24.93; tip added = $4.00; final = $28.93.

• Cash: rounds to $28.95

• Card: exact $28.93

What merchants are doing behind the scenes

Rounding isn’t a back-door markup so consumers likely won’t see a shift in pricing culture.⁸ Posted prices, shelf tags, menus, promos, and taxes are expected to remain to the cent.⁹ Retailers will be making some adjustments behind the scenes:

• Point of Sale (POS) updates: Modern registers flag cash as the tender and automatically apply the nickel-round on the final total only.¹⁰

• Cash drawers: Expect more nickels and dimes in tills and fewer coin exchanges overall, speeding lines a bit.¹¹

• Signage & receipts: Many counters could post a short notice (“Cash totals round to the nearest $0.05”).¹² Receipts typically show the exact subtotal, tax, and fees, plus a separate line for “cash rounding” to keep the math transparent.

Exceptions to know

There are some situations that are exceptions to rounding up or down:

• Cash back at registers: The purchase rounds per usual; cash-back withdrawal is a separate, even-dollar amount.¹³

• Coupons & BOGOs: Discounts reduce the exact total first; the cash round applies after all promotions and on the final total.¹⁴

• Cash-only venues: Expect more prices set at .00 or .05 to minimize rounding and to speed up lines.¹⁵

• Charities and coin drives: Some organizations could pivot to digital donations.

Practical moves for households

A few tips to help manage household purchases without pennies:

• Choose the tender that fits the moment. Those who prefer exact totals can lean on cards and digital wallets; those who like cash can carry a couple of nickels to smooth change.

• Watch split payments. If tracking spending closely, let the POS apply rounding to cash and put the rest on card to avoid odd coin change.

• Tipping habits. For cash tips on small checks, rounding a few cents into a clean whole or half-dollar total can simplify the exchange and keep gratuities consistent.

Retiring the penny nudges in-person cash payments into a simpler, nickel-based world. For most households, the financial impact may be barely noticeable; for businesses, the register experience may be faster and clearer. The biggest decision at checkout is the same as ever: choose the payment method that best fits the plan for spending, tracking, and tipping — and let the rounding rules do the rest.

And the last pennies the U.S. Mint produced in November? They’re worth far more than one cent. On Dec. 11, the final 696 pennies sold at auction for over $16 million.¹⁶