How Automated Cash Management Systems Reduce Cash Exposure and Prevent Cash Shrinkage

Cash transactions are a major part of daily sales for many retailers, and reducing cash

exposure is a constant challenge.  Today, industry-wide losses due to theft have reached unprecedented levels— $112 Billion according to the most recent estimates. The National Retail Security Survey – 2023 lists cash theft as one of the four primary ways retail employees commit internal theft. Additionally, burglaries and robberies are on the rise, and cash is one of the prime targets.

Cash-heavy businesses need effective measures that:

• reduce manual processes

• enable fast and accurate reconciliation

• prevent theft

Automated cash management, or cash automation, is a solution that has been used for decades in the banking industry and its usage is growing among retailers. By using this solution to secure the flow of cash throughout the cash cycle, retailers can focus time and energy on other pressing challenges.

Handle cash securely with automated cash management

Because cash is a physical currency, most people don’t realize that it can be easily automated at a relatively low cost. Cash automation solutions have become more affordable and ultimately pay

for themselves as they significantly eliminate manual labor for cash processing and dramatically reduce shrinkage. All that’s required is a cash recycler or smart safe with the right cash automation software that suits your retail environment. This simple solution boosts security and lowers costs.

Manual processes and a traditional safe do not offer enough security to mitigate the cash risks today’s retailers face. Retail turnover remains high, so it’s more difficult than ever to maintain a team of associates who are adequately trained in the best practices for cash handling. Human error or negligence in handling cash are persistent challenges, even with the most experienced personnel. For example, there are countless stories of store managers taking bank deposits when they wish instead of in accordance with company policy. That potentially leads to cash exposure of thousands of dollars, while also posing a security risk to the store manager. There are also incidents of trusted associates skimming cash from the register and their theft going undetected for months.

With the soaring labor costs of today’s inflationary economy, any overtime required to manually count cash receipts during end-of-day/shift reconciliation hurts retailers’ bottom line. Another impediment of manual processes is the lack of real-time verifiable oversight of associates’ cash handling activities.

Audits are another challenge. Manual processes make them difficult to conduct, and reporting is another troublesome task. It’s hard to assemble the appropriate data quickly and data quality is often lacking. Often, audits are done months after the fact. If irregularities or security breaches are uncovered, it’s too late to sufficiently investigate the incidents.

Traditionally, retailers have been willing to accept a certain level of shrinkage because manual processes make it difficult to achieve precise reconciliation of cash receipts.

However, today’s cash automation solutions raise the bar on cash management, making it unnecessary to tolerate any level of loss.

Drastically reduce manual cash handling

Typically, in a retail location without an automated cash solution, cash from virtually every transaction is handled seven to 11 times, or more, before it reaches the bank as it’s counted, recounted and reconciled as accurately as possible.  The dual verification that’s required ties up two team members, usually a cashier and supervisor. In a busy retail environment, staff might take shortcuts, and cash might be exposed as it’s waiting to be counted or prepared

for deposit. There can be many opportunities for human error or internal theft.

Cash automation solutions solve the problem of cash exposure by providing an end-to-end vaulted system that takes care of counting and validation, while enabling cash accountability and audits.

The cash automation system can also prepare cash for bank deposits; so there’s no need to touch cash yet another time.

Improve Accountability and Process Compliance

Retailers have limited visibility into cash-handling activities when cash is managed manually. Clipboards, hand-written logs, and spreadsheets can lead to errors, obscure nefarious activity, and add to tedium of the job.

Cash automation technology, on the other hand, delivers accurate data that can be trusted. Ultimately it gives retailers visibility into where their cash is, who handled it, the transaction amount, the quantity of each denomination—all with a time and date stamp. As a result, retailers can ensure their processes are being followed and that the appropriate associates are involved. They can also take actionable steps when there’s too much cash on hand or when they lack the appropriate denominations.

Advanced cash automation systems enable remote monitoring of cash activities, giving retailers the peace of mind that their cash is not in jeopardy even when they’re not at the

store location. These systems also have sophisticated access controls to deter bad actors who may attempt to siphon off cash.

Associates value cash automation because it delivers peace of mind that a trusted and validated technology is keeping track of cash and can back up their activities. Depending on the setup of the cash automation system, associates will have a printed receipt to back up their cash handling activities.

Streamline audits and reporting

As part of internal controls, it’s a best practice to conduct cash audits, which help retailers understand how notes are being handled and pinpoint inaccuracies so they can take immediate action.

In manual cash operations, retailers cannot always conduct audits as frequently as they should. Sometimes these audits happen months in arrears. If issues are detected, there may be no recourse because of CIT provider or personnel changes.

With manual processes, a cash audit can consume up to an hour of a manager’s time. If a store is following best practices with daily cash office audits and random leadership audits, this essential control can be very time consuming. Plus, conducting audits takes a manager away from other essential tasks.

Automating this process, and providing leaders immediate access to audit results, significantly reduces human involvement while boosting speed and accuracy.

Cash automation dramatically improves internal audit capabilities by giving retailers  access to data that validates cash counts. The real time balance of cash on hand and chain of custody tracking make cash deposit reconciliations easy.   With automation, the cash on hand audits can be minimized to include only the small amount of cash in an external safe. With a simple report from the cash automation system, retailers can accurately account for all the cash in their business at a specific period of time.  

Enhance Physical Security With Cash Automation

The threat landscape in retail environments continues to evolve. Retailers are shutting down stores, reducing hours, and taking other extreme measures to offset losses of cash and goods. A strategic investment in cash automation can drastically reduce cash exposure and cash theft, freeing retailers to address other vulnerabilities or prioritize other essential business activities.

Are you ready to explore cash automation solutions for your retail stores? Reach out today to schedule a consultation.