What Tennessee Retailers Need to Know About the New Nickel‑Rounding Law
With the U.S. Mint ending production of the penny last fall, many Tennessee retailers are already feeling the impact. Banks are beginning to limit or stop penny distribution, and some stores can’t make exact change on cash transactions.

To help retailers navigate this transition, the Tennessee General Assembly has passed—and Governor Lee has signed—a new law allowing merchants to round cash totals to the nearest nickel when pennies are not available.

Click here to view The Tennessee state law (2026 Public Chapter 602)

Below is a quick guide to what the law does, how rounding works, and what it means for your store.
Why This Law Was Needed
  • Penny production has stopped, and supplies are tightening.
  • Some banks are no longer replenishing retailers’ penny inventory.
  • Without guidance, merchants risked losing money or frustrating customers when exact change wasn’t possible.
  • The new law gives retailers a clear, legal, and consistent way to handle these situations.
How the Rounding Works
When pennies are not available and exact change cannot be made, retailers may round the final cash total (after tax) to the nearest five‑cent amount.
Round down when the total ends in:
  • 1, 2, 6, or 7 cents
Round up when the total ends in:
  • 3, 4, 8, or 9 cents
This system is used in countries like Canada, Australia, Finland, and Italy. Over time, it averages out for both retailers and customers.
Key Points for Your Store
  • Rounding is optional. The law is permissive, not mandatory.
  • You may continue your current practice if you prefer—some merchants choose to always round in the customer’s favor.
  • The rounding applies only to cash transactions and only when pennies are not available.
  • Electronic payments are not affected.
What You Can Tell Customers
If a customer asks why their total was rounded, you can point to the new state‑approved protocol. A simple explanation works well:
“Because pennies are no longer being produced and banks aren’t supplying them, Tennessee now allows retailers to round cash totals to the nearest nickel when exact change isn’t possible.”
Most customers appreciate the clarity.
Posters to display at your store
Copyright © 202 Tennessee Grocers & Convenience Store Association​