November 30, 2017
8 silly things retailers do with their cash
Retailers don’t always give their cash the attention it deserves. Whether you take a little cash in your stores or a lot, it can still present a challenge if it isn’t managed properly.
There’s no better time to break bad habits than the new year, which is right around the corner. Are your stores guilty of doing any of these silly things with your cash?
- Count it too much. Yes, you want totals to be accurate, but counting and recounting every day isn’t the way to get there. More cash touches mean more opportunity for funds to go missing, and it takes valuable time away from helping customers and making sales. Automation is faster and more accurate and reduces cash exposure.
- Face it. There’s no need to spend time flipping all your bills so they face the same side and same direction. Banks used to charge for this, and some back-office employees might still face bills out of habit. But if you have a clear picture of what’s happening in your stores, you can put practices like this to rest.
- Expose it. Anything that makes your cash more accessible and visible — from holding too much in the store to opening a self-checkout for service in the middle of the day — puts you at risk of theft and loss.
- Underestimate the cost of accepting it. Many retailers don’t realize the true cost of accepting cash. Did you know that in some verticals, it’s higher than the cost of accepting credit?
- Cross-ship it. Ever looked at a store report to see a change order and a deposit for the same denomination in the same week? That’s cross-shipping. Understand your cash needs each week to keep bank and transportation fees down.
- Keep the wrong combination of denominations. Bank of America Merrill Lynch says that determining cash levels by denomination can reduce the funds a store needs to operate by 30 to 50 percent. Store cash levels aren’t a one-size-fits-all situation — understanding each store’s needs and circumstances can reduce loss and idle cash.
- Let a register get too full — or too low. Letting registers go too long without a pickup leads to loss, and running short of a denomination can create a frustrating customer service experience. Integrations with your POS and devices like intelligent cash drawers can give store managers alerts when a register needs attention, keeping drawers at optimal levels.
- Have a “slush fund” in the cash office. I’ve seen this more than most executives would like to think. If a register is over or short a dollar, back-office employees sometimes try to “make it come out right” with petty cash. But cash that isn’t counted as part of your safe fund is never a good idea — even if it’s just loose change.
Thirty-two percent of transactions are in cash, according to the Federal Reserve. Understanding the cost of that cash, and keeping it down, is critical to brick-and-mortar retail success. The first step is to get visibility of what’s going on in your stores each day so you can work to clean up your currency management. Once you do, you’ll find that you have more control over your funds and that your stores have more time to focus on customers instead of cash.