Within a matter of a few weeks, the global pandemic brought about numerous changes that drastically affected businesses of all sizes. Customer traffic lagged or died altogether, and many companies had no choice but to make sweeping health and safety modifications, many of which proved costly. As if all of this were not enough, did you know that there is also a coin shortage in this country and that it could have an equally huge impact on your company in the long run?
What brought on this coin shortage?
At first, the roots might seem mysterious and unconnected to COVID-19. However, when you think about the business climate in March and April, it all starts to make sense. In addition to the micro and macro merchants that curtailed operations as COVID-19 swept the country, so did the U.S. Mint. These are the folks who manufacture the bills and coins we use every day for currency.
Banks also played a role in this shortage. For several weeks during the worst of the pandemic in the spring of 2020, most branches were closed, with business being conducted solely online. As a result, the flow of hard currency slowed significantly.
How will the shortage affect your business?
For a small minority of businesses that take cash only, the answer to this question is obvious. If customers who do not use checks or credit cards have a hard time getting their hands on bills and coins, they may not be as likely to do any but the most essential types of shopping. In the end, both they and you will suffer, and it will happen sooner rather than later.
On the other hand, most merchants have recognized the fact that it is in their best interests to accept credit and debit cards, and have upgraded their systems accordingly. After all, fewer people are carrying around sizable amounts of cash these days, while plastic cards are relatively easy for most people to be approved to receive. This is particularly true now that pre-paid options are available. If you have a merchant account and a point of sale system in your business, you can at least continue to serve your customers who use cashless methods of payment.
Another potential difficulty that may arise for you with the coin shortage will come when customers need change. One solution that some retailers have resorted to is rounding up to the next dollar, thus avoiding the need to locate coins. When faced with this policy, consumers have a tendency to become annoyed and often leave with a negative attitude about the store they just patronized. Of course, you could always consider rounding down instead – that is, if you can afford to do so.
Another type of merchant who may immediately be feeling the effects of the currency shortfall is someone who runs an operation that requires coins. Examples include laundromats or vending machines. Although the U.S. Mint claims that it has restored its production to 100 percent, you may continue to experience a loss in customers if your enterprise falls into one of these categories.
One solution to consider if you are feeling the immediate effects of the coin shortage is to begin accepting digital payments. Of course, doing so will not be helpful to your customers who only use cash. However, people with credit or debit cards or who are able to pay using the digital wallet that is included in their smartphones will appreciate the steps you have taken to ensure that they can continue to easily make purchases from you.
Steps you can take to reduce the sting of the coin shortage.
In these unprecedented times, the profit margins for many businesses are extremely thin. If your operation relies on coins and the customers who use them in order to survive, the difficulties that the U.S. Mint has had keeping a robust supply in circulation may have a profound effect on your business. Fortunately, there are some steps you can take to ease your pain:
- Post signage that contains verifiable information about the coin shortage so that people coming into your store know that this situation is real and not just another conspiracy theory.
- In light of the coin shortage, ask customers to provide exact change if they have it.
- Offer coupons to customers who bring in their spare change and bills.
- Offer loyalty points or discounts to customers who pay with plastic.
- If you have not already done so, consider integrating credit card processing and contactless payment options into your business structure.
Now more than ever, it is vital that you as a business owner do all you can to accommodate your customers’ needs and address their concerns. With fears of contracting COVID-19 by touching contaminated surfaces continuing to concern many Americans, touchless payment systems are gaining popularity.
Will the coin shortage that started in March continue indefinitely? Considering that the U.S. Mint has resumed full production and has no plans of curtailing it, chances are good that the effects of the currency shortfall will not last very long. However, if there is anything that the pandemic has taught us, it is that it is impossible to predict the future. Therefore, you might thank yourself later for implementing preventative measures now. If you do, should the worst happen and another national lockdown comes to pass, your company will be in a better position to weather the storm.