Experts Reveal Costly Customer Frustration Problem Impacting Restaurants
The restaurant industry faces significant challenges due to a nationwide penny shortage. The National Restaurant Association has raised alarms regarding the impact of this shortage on cash transactions within the sector.
Impact of the Penny Shortage on Restaurants
More than 25% of cash transactions in the U.S. restaurant industry rely on the availability of pennies. The issue has become critical since the U.S. ceased penny production on November 12, rendering them legal tender but increasingly hard to access. This has created complications for restaurant operators who often struggle to provide exact change.
During transactions where exact change cannot be given, customer frustration escalates. Michelle Korsmo, President & CEO of the National Restaurant Association, emphasized the importance of seamless transactions, stating, “Any change to the hospitality our customers expect could mean a lost return sale for an operator.”
Proposed Solutions to Address Frustration
The National Restaurant Association is advocating for two primary solutions to mitigate the impact of the penny shortage:
- Collaboration between the U.S. Treasury, Federal Reserve, and coin supply chain to ensure the circulation of pennies.
- Federal legislation to establish nationwide rounding rules. This would provide a safe harbor for restaurant operators when exact change is unavailable.
Currently, many restaurants have adopted a practice of rounding down, which could result in losses of $13 to $14 million monthly for operators. Given the industry’s tight profit margins of 3-5%, this rounding practice threatens profitability.
Legislative Efforts to Alleviate the Crisis
The Association has urged Treasury Secretary Scott Bessent to implement temporary rounding guidance. This would offer a degree of certainty and consistency for restaurant owners during transactions without exact change. Meanwhile, Congress is evaluating legislation aimed at providing long-term solutions for the industry.
If enacted, this legislation would not only protect small business owners from potential legal issues but also streamline transactions and address the realities of a post-penny economy, ensuring smoother customer experiences.
