The iconic ".99" pricing strategy—long a staple of American retail psychology—may be the next casualty following the U.S. Treasury’s decision to end penny production in early 2026.
As the smallest-denomination coin fades from circulation, the retail industry is being forced to reckon with how such a seemingly minor change could disrupt daily transactions, pricing models, and consumer behavior.
Used for decades to create the illusion of value and nudge consumers toward purchases, prices ending in 99 cents have become so ingrained in American retail culture that their decline would mark a major symbolic shift.
But with pennies soon to disappear, the practicality of maintaining this tactic—particularly for cash transactions—is being questioned. Retailers may find themselves rounding up or down to the nearest nickel, blunting the psychological edge of charm pricing and prompting a broader rethink of how prices are structured and perceived.
Impact Varies by Sector
The impact of the penny’s removal will not be felt equally across the retail landscape. Sectors that operate on high volumes of small, in-person transactions using cash—such as bodegas, dollar stores, and vending machines—will see the most immediate effects. Independent and cash-preferred businesses in rural or lower-income areas may also experience greater complications.
Conversely, large retailers and e-commerce giants like Amazon, Walmart, and Target are likely to experience negligible disruption. These companies already conduct the majority of their sales through digital payments, where precise pricing can be maintained without the need for rounding.
Subscription-based services and app-driven platforms like Uber and Instacart will also remain largely unaffected.
Cashless Trends Cushion the Transition
One reason the shift is not expected to cause widespread chaos is the already steep decline in cash usage. According to the Federal Reserve, fewer than 20% of transactions in the U.S. are now made in cash—a number that continues to fall, especially among younger consumers.
Credit cards, debit cards, and mobile wallets have become the norm in many parts of the country, making the penny increasingly irrelevant to daily commerce.
For retailers, the penny’s elimination may serve as another nudge toward accelerating their transition to cashless systems. Digital payments allow for exact charges and seamless processing, eliminating the need to manage coin inventories or explain rounding policies.
Some stores may even consider adopting dual pricing structures—charging slightly different totals for cash versus card purchases—to reflect rounding or incentivize digital use. However, such models would need to be implemented carefully to avoid appearing exploitative or discriminatory.
Retailers Face Operational and Technological Adjustments
In preparation for the change, U.S. retailers must begin updating point-of-sale systems to incorporate automated rounding functions for cash transactions. Staff training will be essential to avoid confusion and ensure consistency at checkout.
For businesses that rely heavily on cash—such as convenience stores, quick-service restaurants, food trucks, and farmers’ markets—the elimination of the penny could be a more disruptive adjustment.
In these settings, where speed and customer satisfaction are paramount, even small procedural changes can create friction. Managers will need to communicate clearly how rounding will be handled and provide customers with receipts that reflect the final, rounded total.
Transparency will be key to maintaining trust during the transition.
Rounding Rules and the Canadian Example
As cash transactions adjust to the absence of the penny, totals will need to be rounded to the nearest five cents.
Canada faced a similar transition when it eliminated its one-cent coin in 2013. There, the rounding is applied to the total purchase amount—not individual items—and is executed in a consistent and transparent way: totals ending in 1, 2, 6, or 7 cents are rounded up to the nearest five cents, while those ending in 3, 4, 8, or 9 are rounded down.
This method proved largely uncontroversial in Canada. Studies found no significant inflationary pressure and minimal impact on consumer spending. Many businesses appreciated the reduced time spent managing and counting pennies, while consumers quickly adapted to the small rounding variations.
The U.S. is expected to follow a similar path, but with a much more fragmented retail landscape and wider income disparity, the effects may be more uneven.
Challenges for Cash-Dependent Consumers
Despite the general move toward electronic payments, not all consumers have equal access to digital financial tools. Millions of Americans remain unbanked or underbanked, relying heavily on cash for daily expenses.
These groups are disproportionately represented among low-income and elderly populations, and often shop at retailers that operate in cash-heavy environments.
For these consumers, even small changes at the register can create confusion or anxiety. Retailers will need to maintain clear signage, consistent communication, and fair rounding practices to prevent misunderstandings.
Policymakers and consumer advocacy groups are likely to monitor this closely, particularly in underserved communities.
Toward a Post-Penny Retail Economy
Beyond customer-facing changes, retailers also stand to gain from operational efficiencies. Pennies cost more to produce than they’re worth and are cumbersome to store and handle. Eliminating them from circulation will reduce the burden of cash counting, bank deposits, and supply chain logistics related to coinage.
The larger implication may be cultural. Just as Canada moved on from the penny with little long-term disruption, the U.S. retail ecosystem is likely to adjust and benefit from a simpler, more modern payment environment.
The loss of the penny—and possibly, the iconic .99 pricing strategy—represents a turning point in how Americans shop, how businesses price, and how currency functions in a digital age.
Whether viewed as a minor administrative update or a symbolic milestone, the end of the penny will leave its mark on U.S. retail in ways both practical and psychological.
The coming year will offer retailers a crucial window to prepare, adapt, and reimagine how they connect value to price in a post-penny economy.
