Penny Discontinuation Guidance
The U.S. Treasury Department discontinued penny production effective December 31, 2025.
While existing pennies remain legal tender and can continue to be accepted, new pennies are no longer entering circulation and availability will gradually decrease over time.
To support continued cash operations, campus units that accept cash payments should prepare to implement rounding procedures when pennies are unavailable and encourage customers to use digital payment methods whenever possible.
Who Is Affected?
This guidance applies to all UC San Diego departments, units, and service locations that accept cash payments from customers, students, patients, visitors, or employees.
Cash Transaction Rounding
When pennies are unavailable, cash transaction totals may be rounded to the nearest five cents using symmetrical rounding.
| Transaction Total Ends In | Action |
|---|---|
| 1, 2, 6, or 7 cents | Round down to the nearest 5 cents |
| 3, 4, 8, or 9 cents | Round up to the nearest 5 cents |
| 0 or 5 cents | No rounding needed |
| Original Total | Cash Total Collected |
|---|---|
| $10.21 | $10.20 |
| $10.24 | $10.25 |
| $10.36 | $10.35 |
| $10.39 | $10.40 |
Important: Rounding applies only to cash transactions. Credit cards, debit cards, mobile wallets, and other electronic payment methods must continue to be processed for the exact transaction amount.
Required Actions for Departments
Departments that accept cash should:
- Post customer-facing signage explaining the cash rounding process.
- Train staff on cash transaction rounding procedures.
- Coordinate with point-of-sale (POS) vendors to implement rounding functionality and remove penny denomination options where applicable.
- Encourage customers to use card or mobile payment methods.
- Continue following all requirements outlined in BUS-49, Cash Handling.
Point-of-Sale System Considerations
Departments should work with their POS vendors or support teams to:
- Configure cash transaction rounding functionality.
- Accurately record any rounding adjustments.
- Remove penny denomination options where appropriate.
- Test transaction processing prior to implementation.
For assistance with payment systems or cashless payment options, contact Merchant Services.
Frequently Asked Questions
Q: Why is the penny being discontinued?
A: In May 2025, the U.S. Treasury Department announced the discontinuation of penny production. New pennies are no longer being produced, although existing pennies remain legal tender.
Q: Are pennies still accepted?
A: Yes. Pennies retain their full value and may continue to be accepted for payment.
Q: Will this change prices?
A: No. Product and service prices remain unchanged. Only the final cash transaction total may be rounded when pennies are unavailable.
Q: What happens if exact change is not available?
A: The final cash transaction total may be rounded to the nearest five cents using the approved rounding methodology described above.
Q: Does rounding apply to credit card or mobile payments?
A: No. Electronic payments must always be processed for the exact transaction amount.
Q: Will customers sometimes pay slightly more or less?
A: Yes. Symmetrical rounding may result in a transaction being rounded up or down by one or two cents. Over time, the impact balances out.
Q: How can customers avoid rounding?
A: Customers may pay using a credit card, debit card, mobile wallet, or another electronic payment method, which are not subject to rounding.
Q: How should departments update their POS systems?
A: Departments should work directly with their POS vendor or support team to configure rounding functionality and ensure transactions are processed correctly. Merchant Services can provide additional guidance.
Q: Where can I get help?
A: For assistance, contact Merchant Services or review the Penny Discontinuation Campus Phase-Out Guidance.