As a retailer, you’re keenly aware of the challenges facing your industry and your store. Low profit margins and rising labour costs put pressure on your store to perform. Like other retailers, you’re always looking for ways to lower expenditures and improve productivity.
Cash handling may not be your first target when it comes to cutting costs, but it should be high on your list. Why? As these numbers show, cash comes with a high cost for the retail industry.
Cash Is Here to Stay
You might wonder if you should put much effort into reducing your cash-handling costs. After all, with the rising popularity of card payments and FinTech creating new ways to pay, cash may seem like it’s going away.
The numbers say otherwise. There are still billions of cash transactions worth billions of dollars happening every year in Canada.
In fact, one study found more than half of all transactions are still paid for with cash.
North Americans tend to prefer cash for smaller transactions, but cash is unlikely to disappear any time soon.
Canadians Trust Cash
Another reason you should focus on cash is because consumers still trust it. They make millions of withdrawals. Sixteen percent of 18 to 24 year olds, in particular, are heavy cash users spending, on average, $180 a month.
Many Canadians still say they pay with cash often or always. Unlike newer payment options, cash is almost universally accepted. Canadians know they can walk into almost any business and their money will be accepted. Cash is also private, safe, and convenient, and it allows for greater budget control.
With credit cards and FinTech, you may need to download a new app or be sure to carry two cards.
Cash also costs consumers less. There are no annual fees, transaction fees, or interest payments when you have cash.
Cash Costs Retailers
Cash still has costs, and it’s usually the retailer who sees those associated costs. In fact, cash costs businesses of all sizes approximately 30 cents per cash transaction.
Most of this cost is made up of labour costs. You have to pay people to accept cash, sort it, count it, and get it ready for deposit.
You can see how quickly the costs add up. It takes about 14 minutes to count a cash drawer by hand. If you have eight tills, your employee has just spent two hours counting drawers. While that person was counting, you had to have someone else on the floor.
Labour costs make up a sizeable portion of a retailer’s budget. What if you could reduce the amount of time it took to count tills? It could reduce both the cost of cash and your labour costs.
This is an important consideration for retailers like you. Small businesses often spend more on cash-related labour costs than their larger counterparts. Finding ways to streamline the process and improve efficiency is key.
Cash Automation Is the Answer
You might ask how you can reduce the amount of time required to count cash drawers. After all, if your customers pay with cash, you’ll need to count that cash.
You could improve the process with new cash management technology. A coin and bank note recycler, smart safe, or currency counter could speed up cash handling.
Cash management technology comes with a host of benefits for your business, such as lower labour costs and more accuracy. Another benefit is often improved security. Businesses that adopt cash management technology may even see higher productivity.
Cash has a cost for retailer, and controlling those costs is key for your business. The right cash management technology could help.
