Ferguson Signs Washington State’s 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.

Since the government didn't pass guidelines on how merchants should round prices up or down, the Washington state legislature passed a bill that standardizes how cash transactions should be handled as the U.S. penny grows scarcer

Get our free mobile app

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 $10.00 even for a transaction of $10.01 or $10.02.

Purchase totals ending in 3, 4, 6, or 7 cents round 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

Remember that the rounding process only applies to cash purchases, but you can still pay with exact change if you have it. 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. Electronic payments, credit/debit card, and other non-cash transactions are unaffected.

The law aimed to standardize how cash transactions are handled uniformly and to provide predictability for consumers and clear guidance for businesses.

Canada did this in 2012. Pennies will still be in U.S. circulation but are expected to dwindle further after the government decided to stop minting new pennies because they cost more to produce than they were worth. The U.S. government says it costs approximately 3.69 cents to produce and distribute a one-cent penny, and it lost over $85 million producing them in fiscal 2024.

"Hey Buddy, can you spare a nickel?"

The move 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?

READ MORE on the cost to produce and distribute U.S. coins by denomination