Nickel costs more to produce than it’s worth

Daniel de Visé, Jennifer Borresen and George Petras

USA TODAY

Last year, the United States Mint pressed the last penny.

Penny preservationists warned that the death of the one-cent coin might seed dire consequences: coin shortages at checkout counters; confusion over how to pay bills not ending in zero or five; and higher prices, as retailers began rounding everything up.

Yet, apart from scattered penny shortages, American society appears to have survived the loss of its least valuable coin.

Is the nickel next?

President Donald Trump killed the penny because the government lost money every time it pressed one. Nickels are money-losers, too.

In fact, nickels are bigger losers. The Mint spent 3.69 cents making every penny in 2024. For every nickel, the government spent 13.78 cents, a loss of nearly 9 cents per coin.

Add it up, and the government lost about $18 million minting pennies in 2024. On the nickel, the Mint lost $85 million.

'The argument for getting rid of the nickel is that it costs more to produce – quite a bit more, actually – than its face value,' said David Smith, an economist at Pepperdine University.

Nickels cost more to make because they are larger than pennies and made of costlier stuff: 75% copper and 25% nickel. Pennies look like copper but are – or were – actually made mostly of zinc.

With the penny gone, coin experts reason, consumers and shop-keepers will lean more heavily on the nickel. The Mint will probably end up making more of them, and the losses will mount.

The Treasury pressed only 113 million nickels in 2024 but minted 3.2 billion pennies.

Many Americans regard both nickels and pennies as more nuisance than currency. The typical household is sitting on $60 to $90 in neglected coins, enough to fill one or two pint-size beer mugs, according to the Federal Reserve. Americans throw away millions of dollars in coins every year, literally treating them like trash.

The death of the penny leaves the nickel as the least valuable coin. Inflation erodes the coin’s buying power every year. A stamp hasn’t cost a nickel since 1968.

One unknown, following the death of the penny, lay in how retailers might handle the math of rounding off cash transactions. Would they round down, saving consumers a few cents, or round up, earning themselves a few cents?

A Common Cents Act, introduced by a bipartisan group of lawmakers in 2025, would round cash transactions to the nearest five cents. That bill hasn’t progressed, but some states are pursuing 'rounding' laws on their own.

If the nickel were nixed, the rounding debate would likely rise anew.

'Let’s say something costs $4.91, and you can only pay $5,' said Ute Wartenberg Kagan, executive director of the American Numismatic Society. 'That’s a difference of 9 cents. So, that is a lot of money if you add it up.'

Some observers foresee the nickel’s ultimate demise, given the steady march of inflation and the gradual erosion of purchasing power in a five-cent coin.

Following the death of the American penny, some observers predict the nickel will someday face the same fate.

Alex Wong/Getty Images