Across the country a quiet change is taking place in how cash is handled as a penny shortage pushes retailers, including military stores, to round purchases up or down.

Beginning January 1, or sooner if penny supplies run dry, Army and Air Force Exchange Service stores will round cash purchases to the nearest nickel or dime.

This follows President Trump's order to halt penny production, a move he touted as a cost saving measure to strengthen the nation’s economy and its military readiness.

Meanwhile, Navy Exchanges will implement similar rounding when pennies are unavailable, reflecting a nationwide shift in how cash is managed.

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The penny, a 232 year old symbol of coinage, reached the end of mint production when the U.S. Mint struck its final coin on November 12.

Even with that change, pennies remain legal tender, and there are an estimated 300 billion in circulation, far more than the economy needs. Overseas military exchanges have long used rounding, dating back decades, and their practice is now echoed at home.

Under AAFES policy, cash purchases will be rounded according to the last digit of the total. If the final digit is 3, 4, 6 or 7, the amount will round to the nearest nickel; if it ends in 1, 2, 8 or 9, it will round to the nearest dime.

Navy Exchanges use a similar framework, rounding down when the change ends in 1, 2, 6 or 7 and rounding up for 3, 4, 8 or 9. These rules apply only to cash, leaving credit, debit and gift card purchases untouched.

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That distinction is important because service members and families rely on a variety of payment methods, and overseas exchanges have already adjusted their practices years ago.

Julie Mitchell, an AAFES spokeswoman, explained the practical mechanics behind the rounding plan and the direction of the change.

From a policy perspective, the move matches the Trump administration’s emphasis on fiscal discipline and streamlined government operations, a pathway supporters say strengthens national defense.

Secretary of War Pete Hegseth has been a vocal advocate for lean budgets, modernized logistics, and better use of every taxpayer dollar, and his support for the rounding policy underscores the administration's practical approach.

Critics fear a friction point for cash users and questions about fairness, yet proponents argue the savings and simplicity outweigh short term inconvenience.

The cost reality behind penny production is stark: in recent years the Mint noted the penny cost about 3.69 cents to produce, up from 1.42 cents a decade earlier.

That rise, coupled with falling cash usage, made pennies an increasingly poor use of government resources, and the president’s directive sought to redefine the nation’s monetary footprint.

Officials stressed that overseas operations would avoid disruption because they have long practiced rounding and rely on continuous logistical support.

For military families, rounding provides predictable totals that can simplify budgeting when cash is king, which matters in daily life and on the base shopping trips.

At the same time, the policy signals a broader push toward efficiency that could extend beyond a single coin and benefit readiness. Observers note that this change is part of a wider national conversation about cash, coins, and the role of government in the digital age.

Under this administration, better use of resources translates into stronger civilian and military budgets, and Hegseth argues that a modernized supply chain begins with small, sensible steps like this rounding policy.

President Trump has made cost savings a recurring theme, and supporters say every penny saved can be redirected toward training, equipment, and readiness.

Ultimately, the penny policy is about prudent governance that supports troops and protects taxpayers.

Because dollars saved from ceasing penny production can be redirected to critical needs, the policy aligns with the president’s priorities and the defense secretary's agenda for readiness.

Therefore, service members will benefit from improved efficiency and clearer budgets as the nation adapts to a changing cash landscape.

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