Congress approves ‘common cents’ act, ending penny phase-out

The House of Representatives passed the Common Cents Act Tuesday, effectively codifying rounding rules for cash transactions and paving the way for the final demise of the penny.

Businesses breathe a sigh of relief as litigation fears eased

The legislation mandates clear guidelines for businesses and consumers when dealing with cash, aiming to mitigate the ongoing legal risks associated with failing to provide exact change – a consequence of the penny’s gradual disappearance. Currently, establishments face potential lawsuits for rounding up, even when it benefits the customer. This bill offers a desperately needed shield against that vulnerability.

National Restaurant Association CEO Sean Kennedy emphasized the significant financial burden the penny phase-out has imposed, estimating potential annual losses of up to $168 million for restaurants. “Those pennies do add up,” he stated. “The elimination of the penny comes with costs, and we’re seeking certainty to minimize frustration for both businesses and their patrons.”

A national standard, or a patchwork of practices?

The Act directs the Treasury to halt penny production and dictates that transactions be rounded to the nearest five cents – a move that’s already proving contentious. While a national standard is desired, the reality on the ground remains fragmented. Regions grapple with penny shortages and surpluses, highlighting the need for federal clarity.

The economics of a tiny coin

The U.S. Mint admits that producing a penny costs nearly four cents, rendering it a net loss. Roughly one in four restaurant customers still utilize cash, adding to the logistical complications. Despite these costs, the legislation is viewed as a pragmatic solution to prevent legal entanglement, offering a degree of stability in an increasingly digital economy. The last penny was minted in November 2025.

The debate isn’t simply about pennies; it’s about the ripple effect of a seemingly small change. The Common Cents Act represents an attempt to wrestle control from local market fluctuations and establish a consistent approach to cash handling – a necessity, according to Kennedy, as businesses navigate a future where pennies become increasingly rare, yet still present in bills due to local taxation.