Today’s labor shortages are making manual cash management even more challenging, expensive and risky for many retailers. Retailers have fewer associates to stock shelves, help customers, and perform other revenue-generating activities—let alone effectively perform back-office cash reconciliations and audits. Meanwhile, the rise in retail theft and fraud is making it imperative that cash intensive businesses pay attention to how cash is counted and prepared for deposit.
To that end, it makes sense to include cash automation as part of any productivity and security initiatives.
Cash Automation: The Definition
Cash automation is a solution that makes cash counting more accurate and secure.
The solution consists of:
A secure vaulted device that counts, accepts and dispenses currency
Software that drives the vaulted device and provides the interface that allows users to control the device, see currency it contains by denomination, access activity logs, manage users, and more
Financial institutions have used cash automation for decades. (Check out our white paper to get the historical background on the technology). Retailers, especially those with high volumes of cash transactions, have just started leveraging this technology to make cash management more secure and efficient. With the capabilities retail cash automation delivers—from making counting cash faster and boosting cash security to providing insights necessary to cut cash in transit costs—the solution pays for itself in 6 to 18 months.
Cash Is Still A Preferred Payment Form
Cash is no longer the dominant payment form, but it still makes up 20% of payments. Even as many consumers start using other forms of payment more frequently, they still expect their cold, hard cash to be accepted when and where they choose to use it. A merchant who refuses cash can send the wrong message to consumers and even be fined as the right to pay in cash is being codified.
Some states have passed laws requiring all merchants to accept cash to ensure that consumers of all economic segments can freely participate in the economy. Under New York City’s law, for example, stores are required to accept cash unless they have a machine that converts cash to a prepaid debit card.
While affluent consumers are less likely to use cash, their lower-income counterparts, particularly those without a bank account, continue to use cash for the majority of their purchases.
Many people who have bank accounts, debit cards and credit cards simply prefer to use cash. Part of this segment is the growing number of young adults who practice cash stuffing. Cash stuffers pay for most purchases with cash to help them control their spending so they can reduce debt, beat inflation and stay on budget.
Retailers of all stripes have to be prepared to accept cash. If their cash levels tend to be high, it's strategic to implement technology that automates cash management.
The Businesses That Need Cash Automation
Cash payments create a lot of work for businesses, and some retailers have greater exposure to cash payments than others. For example, in many grocery and convenience stores, a significant number of transactions are in cash. Cannabis retailers and dispensaries transact nearly 100% of their business in cash. These businesses have low margins, which makes it important to have a solution in place that makes cash management less labor intensive and more secure.
The Clear Benefits of Cash Automation
Cash intensive businesses that automate cash management can reap significant labor advantages. By freeing their personnel from the stressful work of counting and tracking cash, they can deploy them to more meaningful activities or projects.
Cash automation technology also helps retailers reduce cash losses. In the 2022 National Retail Federation Retail Security Survey, 71.4% of retailers reported a rise in employee theft since the pandemic. Depending upon the amount of cash a retailer brings in, cash losses can be a significant part of inventory shrink—so much so that a retailer may have to itemize the deficit on their P&L statement.
Cash automation empowers retailers to both reduce the cost and the risks of managing cash. When you consider that the average retailer spends 9.1% of cash receipts counting, securing and preparing cash for deposits, the need for cash automation becomes clear.
Here are a few key additional advantages the solution offers:
Makes counting cash more accurate and secure. In retail setting where cash automation solutions are deployed, cash on hand is accurately counted and secured in cash recyclers. These secure vaulted devices also identify potentially counterfeit bills.
Keeps associates happier and more productive. Associates and managers get overwhelmed by the need to manually count and verify cash throughout the day. This tedious work takes up valuable time and energy and eats away at job satisfaction. Cash automation solutions reduce the stress of managing cash.
Boosts process compliance. Cash automation solutions track cash transactions by day, time, user, amount, denomination, and more. This data gives key insights on who is handling cash and when. Viewing this data alongside other business data, such as POS data and bank deposits, helps general managers determine if cash management processes are being followed.
Facilitates better cash planning. Trending data from cash automation systems can help managers plan CIT services and change orders more efficiently.
Start Your Journey to Cash Automation
For retail environments that bring in a lot of cash, the business value of cash automation is hard to deny. The solution gives retailers one system to manage all aspects of cash management—from counting and securing cash to process compliance and cash planning.
Wondering how cash automation will work in your stores?
Read our ebook for more insights or schedule a demo with our experts.