The penny may soon disappear from circulation. The U.S. Treasury has already signaled that production will stop once the current supply of penny blanks is gone, possibly as soon as 2026. For independent lumber yards and building supply dealers, this change will influence how you handle cash, how your systems operate, and how customers experience transactions at the counter.

By preparing now, you can avoid confusion, keep your accounting clean, and help your staff explain the change with confidence.

What dealers can expect

When pennies are no longer issued, cash transactions will likely stop landing on odd-cent amounts like 10.01 or 20.02. Many analysts expect totals will be rounded to the nearest five cents under proposed rules. For example, a 20.02 cash sale might round down to 20.00, and a 20.03 cash sale might round up to 20.05, depending on how rounding is implemented.

Card, check, ACH, and house account payments are expected to remain exact to the cent. This could mean two customers pay slightly different amounts for the same purchase based on payment method. That difference is small but can cause confusion if staff are not ready to explain it.

ERP and POS systems will need to be ready for cash-only rounding. Confirm whether your software can support this adjustment, how refunds are handled, and how rounding differences flow into the general ledger.

Features to check in your system

Your system should process transactions and protect your financial reporting. Make sure your ERP or POS can separate cash rounding from other tenders, record gains and losses in a dedicated account, and provide clear reporting for reconciliation. Refunds and returns matter. If a 20.02 cash transaction was rounded down to 20.00, the system must apply the same logic in reverse for a refund so drawer counts stay correct.

Since no U.S. rounding rule has been set, flexibility is important. Systems that let you choose rounding modes such as nearest nickel, always up, or always down give you more control as policies take shape.

Policy context

The U.S. Treasury has already ordered its final batch of penny blanks, which means production could stop as early as 2026. Existing pennies will remain legal tender, but no new ones will enter circulation.

So far, there is no federal law that sets a single rounding rule. Canada required rounding only on cash totals after tax, while electronic payments remained exact. Many U.S. analysts expect a similar approach here, but the United States has not yet made that decision. It is also possible that states or local governments will issue their own rules.

Other countries such as Canada, Australia, and New Zealand have shown that eliminating small coins can be managed smoothly when businesses are prepared and when rules are consistent.

Questions to ask your ERP or POS vendor

Now is the time to ask your vendor about rounding features. The questions matter because national rules are not final. You want to know whether your system can handle different rounding modes, whether adjustments flow to a dedicated account, and how customer receipts can show rounding.

Action steps

Preparation is about consistency and communication. Audit your current system to see if it supports cash rounding. Decide on a policy, test it with real scenarios, and be ready to adjust as rules become clear.

Create a rounding account in your ledger so you can track the financial effect. Train your staff with simple scripts they can use with customers. Post signs or add notes on receipts so customers are not surprised. Keep an eye on federal and state guidance.

1. Audit your system for rounding capability.
2. Decide your rounding policy and apply it consistently.
3. Test mixed tenders, cash add ons, and refunds.
4. Create a rounding ledger account.
5. Train staff and prepare signage.
6. Watch for updates from federal and state authorities.

Conclusion

The end of the penny is coming, and it will touch day to day operations for independent dealers. The change is small in dollar value, but it matters for accuracy, transparency, and trust. Planning now keeps transactions smooth, accounting clear, and customers confident.

Sample counter sign

References

• Reuters. U.S. Treasury unveils plan to end production of penny coin. May 22, 2025. Link
• Washington Examiner. The penny is going away in early 2026: What it means for you and your one cent coins. 2025. Link
• Federal Reserve Bank of Richmond. Rounding Up: The Impact of Phasing Out the Penny. Economic Brief No. 25-27, July 2025. Link
• Government of Canada. Economic Action Plan 2012 – Eliminating the Penny. PDF