Home Business Yes, there's a coin shortage in the Bay Area. Here's what's going...

Yes, there’s a coin shortage in the Bay Area. Here’s what’s going on

In the last few weeks, Oakland A1 Laundromat owner Nesanet Tamirue has had to be extraordinarily careful about coins. She’s put up a sign asking patrons not to take quarters unless they’re for the laundry machines.

It hasn’t always worked. Sometimes the people who walk in don’t care — or they feel they have no other choice, clandestinely withdrawing more than $10 in coins before hurrying out. At any other time, it might have been OK. Now, it’s not.

That’s because during the coronavirus pandemic, the flow of coins in the Bay Area has clogged up, banks and business owners say — reflecting a nationwide shortage that’s significantly affecting a number of businesses, including laundromats, convenience stores and banks.

Over the last few months, as the regular flow of consumers have opted to stay home or avoid physical cash altogether, the typical flow and circulation of money has become dysfunctional.

U.S. Mint accelerates as banks ration

The U.S. Mint, the manufacturer of the nation’s coins, has had to accelerate its coin production to push fresh batches into the system. Meanwhile, the Federal Reserve, which distributes coins across the country, has been strategically allocating its coin reserve to cope with the stunted circulation.

The result has been that banks are getting less, and are forced to ration out the little that they have. That has left a large swath of businesses owners, who rely on coins to make daily transactions at their tills, at a loss for how they can continue operations.

The impact on many essential businesses in the Bay Area has been significant.

Ibrahim Bharachua, owner of Cow Hollow Laundromat and Dry Cleaners, said he’s had to turn an employee into a live coin changer to keep patrons from taking too much from the machines and avoid running out of quarters.

The last time he went to the bank, he said, he was told they could only give out one roll — two, if he owned a business. The teller told him the bank was receiving only $500 worth of quarters every week, when it usually orders $2,000.

‘It’s a serious situation’

“Some people want more quarters and I say, ‘I’m sorry,’” Bharachua, who has owned his laundromat since 1991, said. “It’s a serious situation for a laundromat, because you can’t do business without coins.”

Even as many small businesses have switched to mobile payment options, laundromats are still largely a coin-operated industry. In fact, 89% of the nation’s laundromats still take coin as payment, while 60% rely solely on coins to operate, said Brian Wallace, President and CEO of Coin Laundry Association, a membership system of more than 2,000 laundromat owners, commercial equipment distributors and other professions in the industry.

To cope with the maddening shortage, some of the association’s members have tried out various solutions: in-store signs encouraging customers to bring change from home, initiatives to get local people to bring in their dusty piggy banks for cash, and even B2B, ground-level money exchanges between, say, a lucky laundromat owner in Cleveland who has more quarters than she needs, and one in Columbus who hasn’t been as lucky. The association facilitates such transactions via an online forum.

“We’re doing our best with this but at the end of the day, if we can’t make change, we can’t make money,” Wallace said.

Laundromats across the Bay Area are struggling to maintain their quarter supply as the nationwide coin shortage reaches a head. 1010 Wash & Dry, a laundromat in the Richmond District of San Francisco, is encouraging its customers to bring their own quarters.

On the branch level, banks are having to come up with strategic ways to ration the few coins they now have flowing through the system.

“We have a lot of unhappy customers,” Hector Guerrero, manager of the Wells Fargo at 6100 Geary Street, said. “But mostly business customers are the ones who have been hit the worst.”

At this moment, Guerrero says the bank has about $100 in quarters for the entire branch. The branch usually has upward of $500 in quarters a week to dole out to its customers. Since the shortage, he’s seen the reserve go down to $30.

Day-by-day coping strategy

He’s at a loss for what to do. But every day requires some patchwork of a strategy.

“I give $20 to each of my tellers, and they distribute them in the way they can do,” he said.

Just a few minutes before he picked up the phone to talk about the coin shortage, Adnan Alameri, manager at a 7/11 on Sutter Street, said a customer had walked out because Alameri couldn’t provide him with exact change. He told the customer he could buy something else, and even tried to give him a discount, but he lost the sale.

It’s a scene that’s happened more than once since the coin shortage hit his store. He was given $10 — one roll — in quarters the last time he visited the bank.

He usually goes through eight a day.

On June 23, Treasury Secretary Steven Mnuchin noted that the U.S. was a “little far behind on coins” but that he believed the shortage would be solved, according to the New York Times. The Federal Reserve’s rationing plan — which began on June 15 — was meant to be a “temporary measure.”

Requests for comment to the U.S. Mint were not immediately returned. In an emailed statement to The Times, spokesman Michael White said that coin shipments are ramping up — and that the Mint will ship 1.35 billion coins every month for the rest of 2020, up from a typical 1 billion per month.

The San Francisco Mint, which sits atop a hill at Buchanan Street and Duboce Avenue, is one of six U.S. Mint facilities across the country. It used to make circulation coins, but currently only produces commemorative coins and medals. The location made coins up until 1974. San Francisco’s regular circulation coins are now manufactured at the Denver and Philadelphia Mints.

The historic U.S. Mint building at Fifth and Mission streets in San Francisco has been retired as a money-making plant for more than 80 years.

Annie Vainshtein is a San Francisco Chronicle reporter. Email: [email protected] Twitter: @annievain

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