◼ FINANCE Bloomberg Businessweek August 10, 202021PHOTO ILLUSTRATION BY 731. LAUNDRY: STEPHEN VANHORN/ALAMY STOCK PHOTO. DATA: FEDERAL RESERVE BANK OF SAN FRANCISCO’S DIARY OF CONSUMER
PAYMENTCHOICE● After months of lockdown,
quarters are getting harder to findA Coin Shortage Is
Hurting Laundromats
Every morning, Charles Boukas drives to six Chase
banks in the San Diego area in search of quarters.
The most he ever drove to was eight, but one
branch was closed that day, and two others didn’t
have change. Boukas, the 55-year-old owner of the
Coin Hut Laundromat, is in a bind: He’s running
low on quarters, because residents of apartment
complexes are using his change machine but not
necessarily to do laundry. The whole trip takes
about two hours, and the total amount of quarters
he can get is worth $120 because his banks limit
how many coins they give out. So he’s been seek-
ing alternative sources.
Under couch cushions? Maybe not that far—but
close. “Our biggest success has been friends and
family so far, and the banks are just a daily grind
that I do,” Boukas says.
On top of a slowdown in foot traffic, laundro-
mat owners such as Boukas are struggling because
the coronavirus seems to have stopped up the
flow of coins through the economy. People made
fewer store trips, and many businesses stayed
closed with old change sitting in their tills. Even
big retailers have felt the pinch, with many put-
ting up signs at registers encouraging customers
to use exact change or pay with plastic. Some have
called it a national coin shortage, but as of April,
the U.S. Treasury estimated that about $47.8 bil-
lion worth of coins were in circulation, compared
with $47.4 billion last year.
“I don’t refer to it as a shortage, I refer to it as
‘We don’t have coin moving.’ It’s there, it’s just
not in therightplace,”saysJimGaherity,chief
executiveofficerofCoinstar,whichcollectsloose
change atmachinesthatoftenarefoundingro-
cery stores.“It’sinhomes.It’s
probably insomebusinesses
that haven’treopenedatthis
point in time.It’sinbanks—so
it’s there.”
Even in anincreasingly
digital world,cashis usedin
49% of paymentsless
than $10,according
to a studyfromthe
Federal Reserve
Bank of San
Francisco.
That’s ledto a strange kind of liquidity problem. Since the
lockdowns began, the U.S. Federal Reserve has
gone to considerable lengths to ensure that big
money keeps moving through the financial sys-
tem. Need to sell millions of dollars of corporate
bonds? The Fed stands ready to make it happen.
Need 75¢ for the dryer? That could be trickier.
“This is just an unexpected wrench in the works
that I don’t think any of us could have anticipated,
finding ourselves short on quarters,” says Brian
Wallace,presidentandCEOoftheCoinLaundry
Association, which represents about 2,000
laundromats across the country.
Onlya fractionofthelaundromatsintheasso-
ciationhavewhatitcallsalternativepayment
systems; about 20% have laundry card options and
27% accept credit cards, Wallace says. “The peo-
ple that show up to the laundromat each weekend
are there for a purpose,” he says. “It’s an essential
service. Anything that impedes that progress cer-
tainly impacts tens of millions of families that use
vended laundry each week.”
Coinstar plays a role in the recirculation of
coins in America. Its green kiosks were respon-
sible for processing $2.7 billion of coins last year.
In the U.S., the company generally collects an
11.9% fee from customers, who take paper bills in
exchange for their coins, though it also offers to
pay in the form of gift cards with various retailers
without the fee. A spokeswoman for the company
says it saw coin volume decrease during the lock-
down, but is seeing it return.
ThecompanyalsooperatesinJapan,Canada,
Italy,andseveral otherEuropeancountries,
butdidn’tseethisproblemabroad.“There’s
somethinguniqueabouttheU.S.
thatwe can’tfigure out why
thishascome tothiscrisis,”
saysGaherity.
Oncea kioskis full of
coins,Coinstardepos-
itsthemina financial
institution,which can
recirculate the
coins to cus-
tomerssuch as
Boukas. But
he says a big
chunkofthe▼ Share of U.S.
consumer payments
in 2018,bypurchase
amount
Cash
Debit
Credit
Other
Less than $10$10 to $24.99$25 to $49.99$50 to $99.99$100 or more