Is It Time to Consider a New Cash Logistics Solution?

The past year has been transformative, but cash still remains a preferred payment method, especially at convenience stores.
$100 bills

In the highly competitive convenience store market, time is money. The more customers you can serve, the better it is for your bottom line. And a key way store owners can maintain their bottom line is by having sound cash logistics practices in place to help with budgeting, forecasting and time-saving measures.

Leveraging an all-in-one cash logistics solution has many benefits. Beneath the surface, the right solution can help support longer-term profitability, and prevent security issues that individual methods may not be able to deter. Given that most convenience stores are round-the-clock operations, they assume a greater risk when it comes to the safe handling and transport of cash, so these methods should be evaluated regularly to identify options to increase security and limit on-premises cash. An all-in-one solution can provide services ranging from cash forecasting and armored carrier management to smart safes, creating a soup-to-nuts support system.

The past year has been transformative, especially for those in the cash logistics industry, as we have seen rapid adoption of new technologies, changing consumer behaviors, and evolving payment preferences. But cash still remains a preferred payment method, especially at convenience stores.

A recent Cash Connect study found that 40 percent of respondents prefer to use cash for their purchases and, on the business side, 39 percent of business owners said they have a cash-only policy for purchases less than $20 (with 43 percent of those businesses’ purchases being less than $20).

With all the learnings of the past year in mind, now is an ideal time for convenience store owners to evaluate whether their current methods still suit their needs, or if it is time to consider a different option. When evaluating your cash logistics practices, consider the following:

Cash Handling Time & Costs

By nature of the business — high volume of transactions with lower priced items convenience stores run a high risk of threats, including cash shrinkage (a.k.a. internal theft) and inefficient cash handling.

Identify the amount of time you and your associates spend handling cash. Once that amount of time is calculated, determine the labor costs to support just cash handling efforts alone. For example, a smart safe or other device can save about an hour a day of an employee’s work time, and with the minimum wage increasing to $15 per hour, this could result in a $450 savings per month.

Soft and hard costs can add up and can typically justify implementing a cash logistics solution like a smart safe.Smart safes enable businesses to deposit money directly into a secure safe that automatically calculates the amount of money deposited, removing human error from the equation. The money deposited is then available in the business’ bank account the next day, without having to visit a bank in person.

Cash to Local Bank Branch

If you or one of your employees are physically taking cash from your business to a local bank branch, you must consider the associated risks, especially if they follow a routine for this process. A full-service partner will not only ensure you have the appropriate amount of cash on hand based on current activity and trends, but can safely handle transport without risk of harm to your employees or cash loss.

Armored Car Service

Speaking of transport, if you have an armored car service, it will typically require more frequent pickups to ensure you have consistent cash flow (generally three to five times a week). This can become expensive due to frequency, indicating the need for a Remote Cash Capture (RCC) solution with provisional credit.

RCC is the deployment of secure, validating currency-accepting and recycling equipment — like smart safes and cash recyclers — at merchant locations, coupled with armored carrier transportation, remote device management, information reporting and provisional credit systems.

Smart safes and RCC devices allow merchants to have the benefit of the daily credit, while only having the armored carrier come out weekly or even every other week, creating an instant return on investment.

Reporting, Business Intelligence & Reconcilement

If you are experiencing reconcilement challenges, implementing cash automation technology with reporting features can provide critical business intelligence, especially when managing and monitoring cash flow across several locations. This frees up more time for your employees to be assisting customers.

Now could be an optimal time to rethink your cash logistics solutions and consider whether an all-in-one partner could help you better compete in the market, or if some new à la carte options could solve the individual challenges you’re facing.

Suzie Ricci is the chief operations officer at Cash Connect. A division of WSFS Bank, Cash Connect is a national provider of ATM cash management and deposit safe services.

Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.