My Retail Roundup is straying from the norm this week.
The column is usually reserved for news about store closings, openings and relocations. But since an important retail issue is going on that I haven’t had time to write about, due to all the recent store closings keeping me busy, I’m putting it in this week’s Retail Roundup.
The issue is change, as in a lack of it. The nation’s retailers are experiencing what appears to be a coin shortage.
If you’re a customer who has been in a store or restaurant recently, you might have been asked to pay with exact change or a credit/debit card because the business didn’t have enough coins to make change. Blame the COVID-19 pandemic.
There are actually enough coins in the economy, according to the Federal Reserve, but months of business shutdowns due to the pandemic have led to less in-store shopping, use of parking meters, buying snacks from office vending machines and other activities in which coins would be used. So, the circulation of coins has slowed down.
Another factor could be customers’ increased use of credit/debit cards instead of passing cash in stores, to help reduce the spread of the virus.
So, many retailers that rely on coins to do business are having to make adjustments.
Rolls of coins
The parents of teen employees at two local Arby’s franchises are helping out the fast-food restaurants by bringing in their own rolled coins to trade for cash, the owner said.
“It’s not like something we’ve asked them to do. … They say, ‘Do you want it?’ We say, ‘Absolutely, we’ll buy it from you.’ So, they’ve been helping us out,” said Barry Lubman, a managing partner at Long Island Roast Beef Group LLC, a Roslyn Heights-based owner of Arby’s franchises in Centereach and East Meadow.
Normally, each Arby’s would get about $1,000 in change every three days from a Chase Bank branch, Lubman said. Now, the bank will give $120 in change and Lubman must visit several bank branches to get enough change, he said.
Some laundromat owners are having a hard time, too.
“It’s kind of ranging between inconvenience and disruption, depending on the degree to which they rely on quarters for payment, as well as the kind of … local access they might have to a supply of quarters,” said Brian Wallace, president and chief executive officer of the Coin Laundry Association. The Oakbrook Terrace, Illinois-based association is a trade group representing about 2,000 members in the self-service laundry industry.
About 56% of laundromats accept only quarters for washing machine and dryer payments, while the rest accept quarters along with other payment forms, such as credit/debit cards, loyalty cards that can be digitally loaded with value, or mobile payments, such as Apple Pay or Google Pay, Wallace said.
People who rely on cash
The lack of coins in circulation isn’t just a problem for businesses. The risk of some retail transactions not being able to be completed “could potentially limit the ability of millions of cash-reliant and cash-preferring Americans to buy necessary goods and services,” according to the Federal Reserve.
Having clean clothing, for example, is a basic public health need, which is at risk for low-income consumers who rely only on cash at laundromats to make payments. Laundromats are more likely to be in neighborhoods where a disproportionate number of residents are unbanked or underbanked, Wallace said.
Consumers who are unbanked don’t have bank accounts, while those who are underbanked have bank accounts but rely on alternative financial services, such as money orders and check-cashing services, instead of traditional loans and credit cards to make payments, according to the Federal Deposit Insurance Corp., an independent agency based in Washington, D.C.
Bethpage-based laundromat chain Laundry Palace has eight locations on Long Island and four in New York City, owner Erik Wieboldt said.
While 75% of his washing machine and dryer sales are from coin use, the fact that half of his locations accept coins or debit/credit cards has been a saving grace over the past several weeks, he said.
He has shut down coin acceptance at the washing machines and dryers that accept card payments and is in his laundromats more frequently these days, he said.
Like Lubman, Wieboldt visits several bank branches to get coins.
"I'm like scrambling for quarters every day, just to keep it running," Wieboldt said.
There is still about $48 billion worth of coins in U.S. circulation, but they are in piggy banks, coin jars, couch cushions, purses and other places instead of being spent, said Steve Kenneally, senior vice president of payments at the American Bankers Association, a Washington, D.C.-based trade group representing banks.
The Federal Reserve placed a coin allocation limit on banks in June, but as circulation has improved, it has raised the limits.
Since the coin circulation issue began, banks have responded by organizing employee coin drives, encouraging customers to bring in coins, and offering contests and prizes for coin collections, Kenneally said.
The U.S. Mint is asking the public to use exact change when making purchases and to take their coins to banks or to coin recycling kiosks.
The Mint also has ramped up coin production.
“In fact, we are on track to mint more coins this year than we have produced in almost 20 years,” Mint director David J. Ryder said in a statement Aug. 5.
Retail Roundup is a column about major retail news on Long Island — store openings, closings, expansions, acquisitions, etc. — that is published online and in the Monday paper. To read more of these columns, click here. If you have news to share, please send an email to Newsday reporter Tory N. Parrish at email@example.com.