Change Adds Up
Skyrocketing labor costs represent at least 30 percent of convenience store gross profits, enough to keep c-store operators awake at night. Huge hikes in wages and health insurance are sure to take an even larger chunk as new laws take hold.
Last year set a precedent, as a majority of states had higher wage rates than the federal minimum. Convenience store operators are looking for ways to combat labor costs, and many are finding operational efficiencies through technology.
"The only way to directly combat wage increases is through the greater use of technology or the reduction of hours," according to the 2015 NACS State of the Industry report.
While some in-store technologies can be cost-prohibitive and require serious capital outlay, there are affordable options that deliver return on investment in less than 60 days.
C-stores survive by making purchases fast and convenient, and by moving a high volume of customers during peak periods. Cash is still king, accounting for more than two-thirds of all c-store transactions under $10. Automated coin management can be a game-changer for c-store operators. If your employees are manually counting change, a cash transaction consumes a full eight seconds more than it would if using automated coin dispensing. Now multiply that 8 seconds by every cash transaction in your store every day.
Now consider shift changes and closings. With automated coin counting, you greatly reduce the likelihood that tills won't balance, which makes counting coins at shift changes and closings a largely obsolete practice. With more labor time freed up, including some by your store managers, your employees can move on to more productive tasks — like stocking shelves, cleaning the store, or alerting customers to sales or promotions that add up to bigger-ticket sales.
When coin inventory runs low, a prefilled coin canister can be installed in a matter of seconds, so there's never a bottleneck waiting for change. This adds up to four hours a week in labor savings, just by automating coin handling. Now we're talking a measurable increase in operational efficiency, and it can be achieved simply and affordably by automating the way you handle coin.
The National Retail Federation (NRF) cites that 56 percent of retail shrinkage results from employee theft and administrative error. When coin dispensing is automated, coin is 100 percent accurate every time, eliminating manual counting errors. And when coin is locked in a canister and triggered only by your point-of-sale system, it's less possible to skim coins, lowball a transaction or simply not enter it.
Conservatively, let's say that automating coin handling reduces your shrink by one or two dollars a day. That's a cost savings of $30 to $60 per month at one register alone. If you consider the savings with 10 stores — or an entire enterprise of stores — the automation of giving out change becomes a serious cost-saver.
What seems like a small adjustment, modifying the way you dispense coins has proven to yield significant operational impact. For a small cash outlay, c-stores across the country have documented return on their coin dispensing investment in as little as 45 days.
In addition to higher customer throughput, more productive employees and reduced shrink, they've cited faster cashier training, improved speed of service and a host of other benefits.
Delivering a faster customer experience is what c-stores are all about. If you don't deliver on that promise, your customers may not be coming back.
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.