March 29, 2018

Digging into retail deposit options



Shoppers making in-person purchases in 2018 have more payment choices at the register than ever before. They can pay with check, debit or credit, or by scanning their phone or watch. Or they can pull out their wallets and pay with cash — and despite convenient advances in payment technology, many do.


The Federal Reserve Bank of San Francisco’s 2016 Diary of Consumer Payment Choice says that cash remains the most frequently used method of payment, making up 31 percent of all consumer transactions. Even if cash doesn’t account for a large percentage of your sales – or if it primarily accounts for very small transactions – you have to reconcile and report on your cash, no matter what.


A crucial step — getting cash from your stores to the bank — is often more difficult than it sounds. At a 2017 retail treasury professional roundtable presented by the Association for Financial Professionals (AFP), some attendees called armored carrier services a “major pain point for merchants.”


Generally, the choices for stores looking to get cash to the bank are national armored car services, regional courier services, the U.S. Postal Service, or having an associate take it themselves. The 2017 National Retail Security Survey by the National Retail Federation reported that 86 percent of retailers use armored car services in at least some of their locations. But for stores located in small towns or rural areas, armored car service might not be feasible or available. In those locations, deposits are usually hand-carried to the bank.


Many retailers find deposit options daunting, particularly if they have a large, geographically diverse enterprise with many stores that have unique needs.

  • AFP roundtable participants reported that national armored car corporations are largely resistant to technological advances, which makes tracking cash difficult.
  • Regional carriers were generally viewed fondly by the participants, but there aren’t many regional choices – and they might not cover all store locations.
  • Hand-carrying cash to the bank can be just as costly as the other options, after hourly wages and mileage reimbursement are taken into account, and has the added risk to employee safety and the potential for loss of funds through error or theft.


Deposits via carrier service like the U.S. Postal Service are becoming increasingly popular because they strike a balance between cost, convenience and risk management. Insured carrier service deposits allow you to protect your funds and your employees, as well as consolidate your banking relationships, lowering fees and significantly reducing reconciliation and reporting.


Which deposit option causes the least headache for your stores is probably dependent on a variety of factors particular to each store, including how much cash a store accepts on an average day, the size of its metropolitan area, and its proximity to a bank. A software platform that lets you recognize your stores’ needs and adapt to them with different technologies can help relieve those headaches.


To get more details on choosing the best deposit method for your individual stores and insight into optimizing the deposit methods you’ve chosen, read our white paper, Deposit Tracking: Five ways poor deposit management hurts your retail business.




Image: iStock