Kroger Stops Giving Change to Customers

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Kroger Stops Giving Change to Customers

By Thad Rueter - 07/13/2020
Kroger Stops Giving Change to Customers
A coin shortage is the latest problem that Kroger and other retailers now must deal with during the pandemic.

The Kroger Co. reportedly has stopped giving coins as change to customers during cash transactions, putting the money instead on loyalty cards or giving it to charity.

The move reflects another of the many problems caused by the ongoing pandemic: a coin shortage in the United States because of the decline of cash transactions as more consumers and retailers shift toward contactless purchases.

Kroger didn't immediately respond to a request for comment from Progressive Grocer.  

The remainders from cash transactions will be applied to customers’ loyalty cards and automatically used on their next purchase,” reported Cincinnati.com, located in Kroger’s hometown. “Customers are also encouraged to ‘round up’ to support the company’s Zero Hunger | Zero Waste Foundation.”

The new process stems from a situation that emerged publicly in June when the U.S. Federal Reserve announced that the “COVID‐19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coins. In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly and the U.S. Mint’s production of coin also decreased due to measures put in place to protect its employees.”

Help on the Way?

Soon after, FMI - The Food Industry Association and the National Grocers Association (NGA), along with other retail trade associations, sent a letter to the U.S. Department of the Treasury and the Federal Reserve, asking  federal policymakers to take swift action in response to a nationwide coin shortage caused by a decline in cash transactions for retail purchases amid the coronavirus pandemic.

The trade groups, which also included the International Franchise Association, the National Association of Convenience Stores, the National Automatic Merchandising Association, the Retail Industry Leaders Association and the Society of Independent Gasoline Marketers of America, called on Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin to release more coins from federal inventory or boost coin production to meet immediate needs.

Next Moves

Kroger is perhaps the most notable merchant taking this step in response to the shortage, but in recent days, reports have emerged about other retailers having similar worries and in some cases taking their own steps to preserve change. Those steps include, at least so far, putting up signs asking customers to use any coins they have when making retail purchases. Recent reports also suggest that word of the U.S. coin shortage has yet to reach some smaller retailers.

As word circulates, some retail and tech players are using the shortage to further tout the use of contactless payments.

The coin shortage demonstrates the need for retailers to provide a variety of convenient payment options for shoppers,” said Michael Jaszczyk, CEO of Raleigh, North Carolina-based GK Software USA, which sells retail technology.It’s not just about accepting one form of payment over another, it’s about processing transactions in a variety of ways that the customer finds most convenient, secure and, especially now, sanitary. Retailers who offer mobile or contactless checkout or services like curbside pickup are better able to handle changing market conditions and customer behavior.” 

Cincinnati-based Kroger employs nearly half a million associates who serve 9 million-plus customers daily through a seamless digital shopping experience and 2,757 retail food stores under a variety of banner names. The company is No. 3 on The PG 100, Progressive Grocer’s 2020 list of the top food retailers in the United States.