Cash rounding, credit card surcharges after penny production ends

For consumers, the actual amount paid at the cash register increasingly depends on the payment type used.

Given the end of penny production last year by the U.S. Mint, many merchants have begun rounding cash payments up or down to the nearest nickel. States have passed laws governing how rounding can be handled, and a federal law offering guidance for doing so could be on its way.

At the same time, consumers may be encountering credit card surcharges more often at some retailers and service providers, experts say, which pushes up the total cost for paying by credit card.

“What we are seeing is more merchants, the smaller merchants, imposing surcharges,” said Crystal Kaldjob, a partner at Goodwin Procter in Washington, D.C., who works in the law firm’s financial industry group.

Consumers made an average of 47 payments per month in 2025, according to the 2026 Diary of Consumer Payment Choice, an ongoing study released annually since 2015 by the Federal Reserve. Most of those payments — an average of 16 — were completed using a credit card, 15 with a debit card and six with cash. The rest involved checks or other methods.

For comparison, in 2016, consumers made an average of 45 monthly payments, with cash the most common form of payment, appearing in 14 transactions, followed by 12 with debit cards and eight with credit cards. 

Cash tends to be used by older and more rural populations, as well as low-income households, according to the Fed’s research.

The last penny for circulation was issued in November by the U.S. Mint in Philadelphia, marking the official end of the coin’s 232-year production. In the decade leading up to that, the cost of producing each penny rose to 3.69 cents per coin from 1.42 cents, according to the U.S. Mint. An estimated 300 billion pennies are still in circulation.

Since the penny ceased production, 20 states have passed laws either allowing cash rounding or requiring it, and others are considering it, according to the National Cash Rounding Legislative Observatory published by Centsless, a regulatory compliance platform.

A bipartisan bill in Congress called the Common Cents Act would allow, but not require, merchants to round a total up or down to the nearest nickel if exact change cannot be provided, among other provisions.

“A lot of the merchants that I work with really want some clarity so they can move forward with a policy as to how they manage customers who are paying cash in stores,” Kaldjob said.

The measure calls for rounding down if the total ends in 1, 2, 6 or 7 cents and rounding up if it ends in 3, 4, 8 or 9 cents. 

The bill has cleared both the House and Senate, but differences between the two versions would need to be resolved before final…