Now that the U.S. Mint has stopped making pennies, can an Arkansas store round cash transactions to the nearest nickel, including for SNAP customers paying cash for the non-SNAP portion of a mixed transaction?
Plain-English summary
The U.S. Mint stopped producing the penny in early 2026. Banks have suspended penny orders, leaving retailers without enough pennies to give exact change. Many businesses are rounding cash transactions to the nearest nickel. State Representative Matthew Brown asked the AG whether retailers can do that lawfully under Arkansas law, and whether the SNAP federal rules prevent it on mixed SNAP/cash transactions.
Attorney General Tim Griffin's three answers, in plain English:
- Yes, retailers can round cash transactions to the nearest nickel. Pennies are still legal tender (31 U.S.C. § 5103), but federal and state law don't require private businesses to accept cash at all, and they don't dictate how to make change.
- For mixed SNAP/cash transactions, the federal rule is no-discriminatory-treatment. Under 7 C.F.R. § 278.2(b), a SNAP-authorized retailer cannot treat SNAP customers differently from cash customers, and cannot single out SNAP users for special treatment. The cleanest way to comply is to round all non-cash transactions, including SNAP electronic transactions, in the same manner the retailer rounds cash transactions.
- Arkansas law does not require cash and credit/debit/check transactions to be charged identically. Some other states do; Arkansas does not. Penny rounding for cash, while charging the exact penny on cards, likely doesn't violate Arkansas law on its own. But retailers should still check sales tax rounding rules and any contractual surcharge restrictions in their card-network agreements.
The AG specifically noted that detailed federal SNAP analysis is outside the scope of an AG opinion and pointed retailers to USDA for direct guidance.
What this means for you
If you operate a retail store in Arkansas
You have flexibility. Specifically:
- You can round cash transactions to the nearest nickel. That's permitted under both Arkansas and federal law. Document your rounding rule (e.g., "round to nearest nickel; .01 and .02 down to .00; .03 and .04 up to .05; .06 and .07 down to .05; .08 and .09 up to .10") and apply it consistently.
- You can keep charging exact pennies on cards. Arkansas does not require cash and electronic payments to be identical at point of sale.
- For SNAP, the safest design is symmetrical rounding. If you round cash transactions, round SNAP electronic transactions the same way. That's the cleanest path through 7 C.F.R. § 278.2(b)'s no-different-treatment rule. The opinion explicitly notes this approach.
- Don't single out SNAP users. Don't impose a fee or different price structure on SNAP transactions, even an indirect one through asymmetrical rounding.
If you don't accept cash at all
You're fine. Federal and state law don't require private businesses to accept cash. (Some local ordinances do; the AG declined to reach that question. Check your city ordinance if you're in a place with a cashless-ban statute.)
If you're a point-of-sale software vendor
This is a configuration question. Your customers in Arkansas need:
- A "round to nearest nickel" option for cash that can be enabled with a single setting.
- A matching "round to nearest nickel" option for SNAP EBT transactions (the cleanest SNAP compliance posture).
- An "exact penny" option for credit/debit/check.
- Tax-rounding logic that handles the tax line consistently.
Audit your tax-rounding logic against state sales-tax rules. The AG flagged this specifically: sales tax may have its own rounding requirements separate from the gross-amount rounding.
If you're a credit card processor or merchant acquirer
The opinion notes that surcharge restrictions in card-network agreements are governed by federal law and the merchant agreement, not state law. If a retailer's "exact penny on cards, rounded on cash" arrangement creates a price differential that the card networks treat as a "surcharge," the network rules may apply. Whether nickel rounding is even a "surcharge" is a fact question outside this opinion's scope.
If you're a consumer
If you pay cash at a store that rounds to the nearest nickel, you'll sometimes pay 1-2 cents more, sometimes 1-2 cents less. Over many transactions it should average out. SNAP recipients paying with EBT for the SNAP-eligible portion of a transaction are charged the exact amount; only the non-SNAP cash portion gets rounded.
If you're a Tennessee/Texas/etc. retailer reading this
Several other states have cash-equivalence rules that this opinion notes Arkansas does not have. Don't extrapolate from Arkansas's permissive posture to your state. Check your state's cash-and-credit-equivalence statutes before adopting nickel rounding.
Common questions
Q: Are pennies still legal tender?
A: Yes. 31 U.S.C. § 5103 still designates U.S. coins, including the penny, as legal tender. The U.S. Mint stopped producing new pennies in 2026, but existing pennies remain valid currency indefinitely.
Q: Does Arkansas have a "cash equivalent" law that requires cash and credit to be priced the same?
A: No. The opinion is explicit: "Because Arkansas law does not expressly require cash and credit card transactions to be treated identically, penny rounding for cash transactions likely does not, by itself, violate other Arkansas laws."
Q: What's the SNAP rule, exactly?
A: 7 C.F.R. § 278.2(b) requires SNAP coupon payments to "be accepted for eligible foods at the same prices and on the same terms and conditions applicable to cash purchases of the same foods at the same store." And it adds: "No retail food store may single out [SNAP] coupon users for special treatment in any way." The AG's reading: don't make SNAP users worse off than cash users, and don't make them better off either.
Q: If I round cash up but charge cards exact, is that a "surcharge" on cash users?
A: It depends on how rounding works in practice and on your card-network agreement's definition of surcharge. The AG declined to answer this. Talk to your processor.
Q: Can a city ordinance require my store to accept cash?
A: Some cities and states have cashless-ban ordinances. The AG noted this question is outside the scope of the opinion. Check local law.
Q: Does this opinion apply to electronic SNAP transactions specifically?
A: SNAP transactions are charged at the exact electronic amount. The rounding question only arises for the non-SNAP cash portion of a mixed transaction. The federal "equal treatment" rule still requires that the overall point-of-sale treatment of SNAP and cash users be symmetrical.
Q: I round to nearest nickel and a customer complains. What's my exposure?
A: Under Arkansas law, low. The AG's analysis says nickel rounding for cash "likely does not, by itself, violate other Arkansas laws." Federal exposure under SNAP is also low if you round cash and electronic transactions the same way. Document your policy and apply it consistently.
Background and statutory framework
The U.S. Mint announced in early 2026 it was suspending production of the one-cent coin, citing rising production costs. The Mint's circulating-coin FAQ at the time of the opinion was the cited source. Existing pennies remain in circulation; banks, however, have suspended new orders, creating a coinage shortage at retail.
7 C.F.R. § 278.2(b) is the USDA Food and Nutrition Service regulation implementing the no-discrimination rule of the Food and Nutrition Act of 2008, 7 U.S.C. § 2013 et seq. It requires SNAP-authorized retailers to give SNAP customers identical pricing and terms.
Federal law does not require private businesses to accept cash payments. Some state laws and city ordinances do require cash acceptance (often called "cashless retail bans"); this opinion expressly does not reach those.
Citations and references
Federal:
- 31 U.S.C. § 5103, legal tender
- 7 C.F.R. § 278.2(b): SNAP retailer equal-treatment rule
Arkansas AG opinion precedents on out-of-scope federal-law questions:
- Op. 2025-069
- Op. 2025-010
- Op. 2008-112
- Op. 2005-170
- Op. 2003-094
- Op. 98-254
External:
- U.S. Mint, "Penny FAQs: Why is Circulating Penny Production Being Suspended?" (content last updated Jan. 7, 2026), https://www.usmint.gov/news/media-kit/penny
Source
Original opinion text
BOB R. BROOKS JR. JUSTICE BUILDING
101 WEST CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201
Opinion No. 2025-115
January 16, 2026
The Honorable Matthew K. Brown
State Representative
3010 Pheasant Road
Conway, Arkansas 72034
Dear Representative Brown:
I am writing in response to your request for my opinion on rounding transactions, given that the U.S. Mint no longer produces the penny.
You report that because "the U.S. Mint stopped production of the penny," several "financial entities have suspended penny orders," leaving retailers unable to provide exact change to cash-paying customers. Consequently, retailers have adopted different rounding practices, typically rounding up or down to the nearest nickel.
You also note that industry groups have sought guidance from the United States Department of Agriculture on whether rounding cash transactions may violate federal regulations concerning Supplemental Nutrition Assistance Program (SNAP) payments.
Against this background, you ask the following questions:
- Under Arkansas and federal law, may a SNAP-authorized retailer lawfully round up or down to the nearest nickel when providing change to a SNAP recipient during a non-SNAP cash transaction while charging the exact amount for the SNAP-eligible portion of the transaction? For example, when a SNAP recipient purchases both SNAP-eligible and SNAP-ineligible items, the transaction must be processed as two separate transactions. Because the SNAP portion of the transaction is electronic, the exact amount of the transaction is charged. However, if a SNAP customer chooses to pay cash for the non-SNAP portion of the transaction, may the retailer lawfully round the cash transaction to the nearest nickel?
Brief response: Neither Arkansas nor federal law specifically prohibits a retailer from rounding the cash portion of a mixed SNAP transaction to the nearest nickel, as long as the SNAP-eligible portion is charged electronically at the exact amount. The key federal requirement is that businesses accepting SNAP payments cannot treat customers who use SNAP coupons differently from those who use cash. To comply with federal SNAP law, a business may consider rounding all non-cash transactions (including SNAP transactions) in the same manner as it rounds cash transactions. But a detailed analysis of federal law is outside the scope of an Attorney General opinion.
- Under Arkansas law, is there a preferred method for providing change during a cash transaction with a SNAP recipient?
Brief response: No. Arkansas law does not prescribe any particular method for providing change to SNAP recipients during cash transactions.
- In general, are there any other laws or regulations which prohibit a retailer from rounding cash transactions to the nearest nickel while charging credit, debit, or check transactions to the exact penny?
Brief response: Because Arkansas law does not expressly require cash and credit card transactions to be treated identically, penny rounding for cash transactions likely does not, by itself, violate other Arkansas laws. Retailers should still review the applicable sales tax law and surcharge restrictions, if any, on credit and debit transactions to ensure compliance.
DISCUSSION
To answer all three questions together, this opinion examines the relevant laws governing rounding transactions at a point of sale. Although the U.S. Department of the Treasury no longer produces pennies, they remain legal tender. Neither federal nor state law (constitutional, statutory, or regulatory) requires private businesses to accept cash payments. While local ordinances may impose such requirements, a business in this State may generally create its own policies on whether to accept cash. If a business accepts cash, the next question is whether federal or state law governs rounding change for cash payments.
Under federal law, a business accepting SNAP payments cannot treat customers who use SNAP coupons differently from those who use cash: such payments "shall be accepted for eligible foods at the same prices and on the same terms and conditions applicable to cash purchases of the same foods at the same store." Further, "[n]o retail food store may single out [SNAP] coupon users for special treatment in any way." That means federal law prohibits retailers from giving SNAP coupon users discriminatory or preferential treatment.
While some states prohibit businesses from imposing credit card surcharges or charging cash-paying customers more than those who use non-cash payment, Arkansas does not. Additionally, Arkansas law does not prescribe a particular method for providing change during cash transactions with SNAP recipients. Because Arkansas law does not expressly require cash and credit card transactions to be treated identically, penny rounding for cash transactions likely does not, by itself, violate other Arkansas laws.
To comply with federal SNAP law, a business may consider rounding all non-cash transactions (including SNAP transactions) in the same manner as it rounds cash transactions. Ultimately, a detailed analysis of federal law is outside the scope of an Attorney General opinion. But even if uniform rounding prevents retailers from giving SNAP coupon users discriminatory or preferential treatment under federal law, retailers should still review the applicable sales tax law and surcharge restrictions, if any, on credit and debit transactions to ensure compliance.
Assistant Attorney General William R. Olson prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General