The End of the Penny: What It Means and Why It Matters

The End of the Penny: What It Means and Why It Matters

Understand the real reasons behind the penny’s retirement and what it means for your wallet.

For generations, the humble penny has jingled in pockets, gathered in jars, and been tossed into countless fountains with a wish. But now, after more than 230 years in circulation, the U.S. Mint has officially produced its final batch of pennies — closing the chapter on America’s lowest-value coin.

While many people saw this coming, the news still brings big questions: Why now? What happens next? And what does this really mean for consumers?

Here’s a breakdown of what you need to know.

Why is the Penny Being Retired?

The disappearance of the penny has less to do with tradition and more to do with cost, practicality, and changing spending habits.

1. It costs more to make than it’s worth. For years, the Mint has spent over two cents to produce each one-cent coin. Multiply that by billions of pennies minted annually, and it becomes clear why the penny wasn’t sustainable.

2. Purchasing power has changed. A penny in 1900 had the buying power of about 35 cents today. In 2025, it can’t buy anything on its own — not even a gumball.

3. Digital payments have taken over. As debit cards, mobile wallets, and tap-to-pay options become the norm, physical coins, especially low-value ones, are used far less than they used to be.

4. Other countries have already led the way. Canada eliminated pennies in 2013, and several European countries have done the same. Removing the penny simply brings the U.S. in line with global practices.

What Happens Now?

Even though no new pennies will be minted, existing ones will still remain legal tender. That means:

Pennies will gradually disappear through natural circulation — similar to how older bills and coins fade out over time.

How Will Prices be Affected?

The 2025 ICU Day theme, “Cooperation for a Prosperous World,” mirrors the United Nations’ declaration of 2025 as the International Year of Cooperatives: Building a Better World Together. It reflects how credit unions across the globe help individuals and communities achieve greater prosperity through cooperation, inclusion, and shared purpose.

At COPFCU, we see this every day — in members saving for their first home, funding their children’s education, or accessing fair loans that strengthen families and neighborhoods.

Local and Global Impact

One of the biggest questions is: Will stores just round everything up? Here’s the good news:

Most transactions won’t change at all.

Digital payments, card purchases, and online shopping will continue charging exact prices down to the cent.

Cash transactions will use “rounding rules.”

Stores that accept cash will likely follow a simple, transparent rounding system:

Studies from other countries show that these rounds are essentially a wash — consumers don’t end up paying more over time.

Will This Actually Save Money?

Yes. The U.S. Mint is expected to save tens of millions of dollars each year by eliminating penny production. Those savings can be redirected toward producing higher-value coins more efficiently or simply reducing overall manufacturing costs.

Will the Penny Become a Collector’s Item?

Possibly — especially early versions like wheat pennies, copper pennies pre-1982, and special misprints.
However, regular modern pennies will likely hold sentimental value rather than high monetary value.

A Symbolic Change in American Money

Whether you view the penny with fondness or frustration, its retirement marks a symbolic shift. Money continues to evolve, and the removal of the penny reflects a move toward faster, more efficient, and increasingly digital payments.

But the penny leaves behind quite a legacy — from Abraham Lincoln’s iconic profile to generations of “lucky penny” traditions.

So if you still have a few rattling around in your bag or car console, hold onto them. Someday, that tiny coin may represent more history than currency.