Congress votes to end the penny: cash sales can round to the nearest 5 cents, card sales stay exact

Congress has sent President Trump a bill that formally ends production of the one-cent coin after 234 years. The Senate passed the Common Cents Act by voice vote late Monday, the Associated Press reported, two weeks after the House passed it the same way. Trump is expected to sign it.

The Mint already stopped making pennies for circulation in 2025. What the bill adds, and what retailers lobbied for, is a legal rule for what a cashier does when there is no penny in the drawer.

The rounding rule, digit by digit

The bill as introduced in the House by Reps. Lisa McClain and Robert Garcia sets out a symmetric rule for cash transactions when exact change cannot be given:

Total ends in	Cash total may be	Effect
0 or 5	unchanged	none
1 or 6	rounded down	customer pays 1 cent less
2 or 7	rounded down	customer pays 2 cents less
3 or 8	rounded up	customer pays 2 cents more
4 or 9	rounded up	customer pays 1 cent more

Four details in the text matter for anyone running a register:

• It is the total, including tax, that gets rounded, not each item. A sale of $4.99 plus tax is rounded once, on the final figure.
• Card, check, gift card, money order and electronic payments are excluded. They are still charged to the exact cent. Only cash rounds.
• Rounding is permitted, not required. A store can still give exact change, and it may always round in the customer's favor if it prefers.
• It pre-empts state and local rules for any business following the formula, which is the lawsuit protection the trade groups wanted. Employers paying staff in cash who choose to round must round up.

A total of 1 or 2 cents can be rounded up to 5 cents, the one exception to the table. This summary follows the House text as introduced in August; the version the President signs is what governs.

Why the rule is worth money to a counter business

Here is the part the headline misses. Since pennies dried up, many stores have been rounding every cash sale down to protect themselves, the National Association of Convenience Stores said this month, which it described as an unplanned cost that can also run foul of state law.

The arithmetic is simple. If the last digit of a cash total is effectively random, always rounding down gives away 0, 1, 2, 3 or 4 cents, an average of 2 cents per cash sale. Under the bill's up-and-down rule, the ones and twos that round down are offset by the threes and fours that round up, so the average works out to about zero.

Take a coffee shop or corner store ringing up 300 cash sales a day, open 360 days a year. Always rounding down costs about 300 x $0.02 x 360 = $2,160 a year. The symmetric rule recovers most of that. For a business doing 50 cash sales a day, the same sum is $360. Small per sale, but it comes straight off the margin, and it scales with every register.

The businesses this touches most are the ones still taking a lot of cash: convenience stores, diners, food trucks, laundromats and barbershops.

605,380 independent restaurants are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 79,108 in CA, 54,058 in TX, 51,387 in NY. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

112,779 independent retail stores are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 14,307 in CA, 9,799 in TX, 9,064 in NY. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.

What owners can do now

Nothing changes until the President signs. After that, three practical steps: check whether your point-of-sale system has a cash-rounding setting or ask your provider when it will, post a short sign at the counter explaining that cash totals round to the nearest 5 cents while cards stay exact, and make sure staff know the rule is symmetric, not "always down". Prices ending in .99 do not need to change, because it is the after-tax total that rounds.

The coin itself

The Mint says a penny now costs almost 4 cents to make and that stopping production saves about $56 million a year, according to AP. It made 3.2 billion pennies in 2024. Existing pennies remain legal tender. The bill also lets the Mint make the nickel with a zinc core under a nickel outer layer, a cheaper recipe than today's copper-nickel coin, which matters because the nickel is about to do more work.

For more on how independent shops run their numbers, see our restaurant playbook and small-business coverage.

Sources: Associated Press; H.R. 10167 (Common Cents Act) as introduced, via govinfo.gov; NACS; CheckThisBiz business listings. Rounding examples are Chronicle calculations on stated assumptions. This is general information, not legal or financial advice.