Governor Ferguson Signs Washington State’s New Law On Penny Transactions

Washington Governor Bob Ferguson signed the bill Monday that establishes rules and guidelines for merchants and the public with the growing scarcity of pennies. The bill sets rules for transactions to round to the nearest nickel and go into effect in mid-June 2026.

You have no doubt spotted the placards at store checkout stands talking about pennies and the nationwide shortage now that the federal government decided to halt penny production.

"Hey Buddy, can you spare a nickel?"

The move with this new bill begs the question: Will the same thing happen to the humble nickel, which the Conversable Economist reports costs almost 14 cents to produce and circulate?

Since the government didn't pass guidelines on how merchants should round prices up or down, our Washington State bill standardizes how cash transactions should be handled as the U.S. penny grows scarcer. The law aims to standardize how cash transactions are handled uniformly and to provide predictability for consumers and clear guidance for businesses.

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Get Ready to Round Your Cash Purchases Up or Down

House Bill 2334 establishes asymmetrical rounding for cash payments to the nearest nickel. If your cash transaction total ends in 1 or 2 cents, it will be rounded down to 0 cents.

For example, you will pay an even 10 dollars for a transaction that costs $10.01 or $10.02.

Purchase totals ending in 3, 4, 6, or 7 cents will be rounded to the nearest nickel, so $10.03, $10.04, $10.06, or $10.07 transactions round to $10.05. And your $10.08 or $10.09 purchase will round up to $10.10.

I'm guessing we may see even more penny cups at places like convenience stores for people who don't want to pay anything extra. Remember that the rounding process only applies to cash purchases, but you can still pay with exact change if you have it.  Electronic payments, credit/debit card, and other non-cash transactions are unaffected.

Canada Tried It First

Canada did this to their monetary system in 2012. Our pennies will still be in circulation here in America but expect them less after the government stops minting new ones because they cost more to produce than they were worth.

It costs approximately 3.69 cents to produce and distribute a one-cent penny, and its value lost over 85 million dollars producing them in fiscal year 2024.