Are you paying too much to manage and deposit your retail cash?

“It’s no secret that people used cash less and credit cards more in the early days of COVID,” said Sean Burke, CEO of Cash Depot. “But that trend quickly leveled off. Sadly, we can’t say the same about credit card fees or the cost of retail cash management.”

According to the Federal Reserve, over the past three years, cash has consistently accounted for about one in five transactions in the United States. Not surprisingly, about one in five Americans say cash is their preferred payment method when they shop in person.

Despite 7% of Americans having either dropped cash or having plans to stop using it, 93% of retail customers expect to keep using paper money indefinitely. Young consumers, especially, have been turning to cash as a way to stay on budget and avoid interest-based payments that could send them further into debt. Seventy percent of Gen Z use cash more than they did a year ago.

But cash also has a BIG benefit for retailers: No Swipe Fees.

Cash offers a substantial benefit for convenience stores: No swipe fees attached. “Retailers are all too familiar with credit card swipe fees,” Burke noted. These swipe fees cost the convenience store industry almost $20 billion in 2022 and it the networks seem all too happy to keep raising their charges or levying new fees.

Of course, cash has costs, too. “The good news is that [retailers have more power, options, and opportunity] to control these costs,” Burke said.

According to Burke, the three main ways that cash costs retailers are:

• Labor. This includes paying employees to count their drawers and extends up the organization as managers and others spend time on bookkeeping and reconciliation. Cash Depot research shows that manual cash management for a C-store can require about 13 hours of labor each week at the store level. So, a single location can spend over $1,000 every month managing cash.
• Bank fees. Financial institutions are charging more for cash handling. Deposits could cost up to $0.25 per $100 over $5,000. Then there are all the additional nickel-and-dime fees such as non-standard deposits, currency and coin collection, currency and coin orders, and processing.
  “Retailers don’t need the extra hassle of finding the right bank that will accept the right amount of cash the correct number of times” to avoid fees, said Burke. And moving to armored carriers just shifts the costs as “fees for couriers have reached $70 average per stop.”
• Crime, both internal and external. “A simple, practical way to limit exposure to crime is a cash management system that limits cash availability in the store. These systems can automatically count, verify, and record the store’s funds,” Burke said, “but otherwise keep it safely tucked away for deposit.”
  But an even better option is to get the cash out of the store completely. BANK IN A BOX by Cash Depot gives retailers that option, “by providing all of the benefits of a smart safe and cash recycler,” said Burke, “while also functioning as a financial kiosk and ATM. While the store’s money is digitally deposited, the physical cash literally walks out the door in the hands of customers.”

“A strong cash management program has many benefits. Containing rising costs is one of them,” Burke said.

The original version of this article was written and posted by NACS Magazine and is available here.

Interested to know how much money BANK IN A BOX could save you? Check out our savings estimator here!

TLDR: While not as expensive as other payment methods, retail cash costs are taking a chunk out of profits through labor, bank fees, and theft. Cash management systems like BANK IN A BOX can help retailers keep cash safer and get a handle on spiraling cash expenses.