A customer hands you a ten for a $7.43 total. You owe $2.57 in change, and the penny slot in your drawer is empty again. Do you round down and lose two cents? Round up and risk an argument? Ask for exact change and hold up the line?
Across the US, cashiers face that moment many times a day. The fix is not a single clever trick. It is a written rounding plan that is fair, legal in your state and applied the same way by every person on your register.
Key takeaways
- The US Mint was directed to stop producing pennies in February 2025, and NACS reports stores began running short in late summer 2025.
- Rules differ by state. Kentucky, for example, requires cash transactions to be rounded to the nearest five cents when pennies are unavailable, effective July 15, 2026.
- Calculate sales tax first and round the final cash total only. Rounding never reduces the tax you owe.
- Round cash payments only. Card, mobile wallet and gift card payments are charged to the exact cent.
- Post a sign, train every cashier and keep the policy consistent.
Why are stores running out of pennies?
According to NACS, the US Mint was directed to stop producing pennies in February 2025, and by summer 2025 the last penny blanks had been minted and shipped to Federal Reserve vaults. Stores began running short of pennies in late summer 2025, and many retailers cannot fill penny orders from their banks.
Pennies remain legal tender. They are simply getting harder to find, and the problem lands at your register.
Is cash rounding legal?
It depends on where you are, and the rules are still moving.
- Some states have acted. Kentucky's Department of Revenue says that, effective July 15, 2026, cash transactions must be rounded to the nearest five cents when pennies are unavailable. It also says sales tax must still be calculated to the nearest penny, and that rounding does not reduce the tax a retailer must collect and remit.
- Some laws get in the way. NACS notes that some state and local laws effectively require exact change, and that SNAP rules bar charging SNAP customers a different price than cash customers.
- Federal action is pending. NACS supports the Common Cents Act, a bill that would let retailers round up or down to the nearest nickel and give them a safe harbor for doing so. Until federal law changes, NACS warns that rounding could conflict with some laws.
Before you round, check with your state revenue department and, if you have one, your franchisor. Many franchisors have issued their own guidance.
The 6-step cash rounding plan
Step 1: Calculate tax, then round
The Federal Reserve recommends rounding cash payments only after all duties, fees and taxes are calculated, according to accounting firm Withum. Ring up the sale, apply tax to the exact cent, then round the final cash amount due. Your sales records and tax reports still show the exact figures.
Step 2: Round cash only
Card, debit, mobile wallet and gift card payments do not need pennies, so charge them to the exact cent. Rounding applies only to the cash portion of the sale.
Step 3: Use symmetric rounding, unless your state says otherwise
The most common approach is rounding to the nearest five cents: totals ending in 1, 2, 6 or 7 cents round down, and totals ending in 3, 4, 8 or 9 cents round up. Over many sales, the ups and downs tend to balance. Where your state publishes its own rule, follow that instead.
Some stores choose to round only in the customer's favor. That is generous, but NACS notes it is costly and may still conflict with some laws.
Step 4: Treat SNAP customers the same
Because SNAP rules bar charging SNAP customers a different price than cash customers, make sure your approach does not leave an EBT shopper paying more for the same item than a cash shopper. When in doubt, ask your state SNAP agency.
Step 5: Post it and say it
Put a short sign at every register: "Due to the national penny shortage, cash totals are rounded to the nearest 5 cents. Card and mobile payments are charged to the exact cent." Add the same line to your receipt footer. Clear notice prevents most arguments.
Step 6: Train and audit
Walk every cashier through the rule with three or four practice totals. Then compare drawer counts at close for a few weeks. If one register is consistently short or over, you have a training issue, not a penny issue.
Three ways to need fewer pennies
Rounding handles the symptom. These steps reduce how often it comes up:
- Make paying by card easy. Withum suggests encouraging card, contactless and other digital payments. Tap to Pay on iPhone lets any staff member take a contactless payment on the sales floor.
- Offer an alternative for change. Withum also suggests store credit, loyalty points or a charitable round-up when exact change is not available.
- Review prices on high-volume items. Withum recommends reviewing pricing to reduce the need for pennies, especially on items you sell most. On untaxed items such as many groceries, a price that ends in 0 or 5 cents means a single-item cash sale needs no rounding at all.
How ShelfPerks helps
ShelfPerks does not change your state's rounding rules, but it makes the plan easier to run.
- More payment choices. The point of sale takes credit, debit, Google Pay, Apple Pay and your store's own gift cards, and Tap to Pay on iPhone works through the ShelfPerks iPhone app with some processors.
- Receipt customization (Standard and above) lets you add your rounding notice to every receipt.
- Fast price updates. Manage product and category prices in one place in inventory management, with bulk import for large changes.
- Store credit and gift cards. Your own gift card program is included on Plus and above.
- Roles and permissions. Control who can open the drawer or adjust a sale with roles and permissions.
Frequently asked questions
Can a store round cash totals to the nearest nickel?
It depends on your state. Kentucky requires cash rounding to the nearest five cents when pennies are unavailable, while NACS notes that some state and local laws effectively require exact change. Check with your state revenue department before you start.
Should I round before or after sales tax?
After. The Federal Reserve recommends rounding cash payments only after all duties, fees and taxes are calculated. Sales tax is still calculated and remitted to the exact cent.
Do I round card payments too?
No. Card, debit and mobile wallet payments do not use coins, so they are charged to the exact amount. Rounding applies only to the cash portion of a sale.
Does rounding change how much sales tax I owe?
No. Kentucky's Department of Revenue states that rounding does not reduce the tax a retailer must collect and remit. Your records should keep the exact tax amount.
Is there a federal law on penny rounding?
Not yet. NACS supports the Common Cents Act, which would let retailers round to the nearest nickel with a safe harbor. Treasury's December 2025 guidance defers to the states.
Your next step
Write your one-paragraph rounding policy today, print the register sign and run a five-minute huddle with your team. To take more payment types and keep receipts and pricing in one system, try ShelfPerks with a 14-day free trial of Premium features, no credit card required, at grow.shelfperks.com.
