What the Increase in Cash in Circulation Means for Retailers

Despite recent headlines about retailers and restaurants shifting to cashless payments, the need and use for cash is not going away anytime soon. However, cash now faces an increase in competition with the development of new payment methods—such as credit or debit cards, gift cards, mobile phones, online payments and other services like PayPal. These new financial services are giving customers new ways to conveniently pay for their purchases.

It’s easy to misunderstand cash usage with the contradicting reports about the world moving to a cashless society. While commercial banks and credit card companies may think they have won the war on cash, research conducted by the Federal Reserve shows otherwise.

Below are the key findings from the Fed’s report and shows that cash remains resilient, regardless of the new technologies that have been introduced to consumers.

Key Findings:

•   Cash continues to be the most frequently used consumer payment instrument;
•   Cash also dominates small-valued transactions with over 60% of transactions under $10;
•   There is more cash in the world today than a few years ago.

So what does this growth mean for retailers? Since many products sold by retailers can typically be purchased with smaller bills, the growth leaves many businesses nationwide looking for better ways to efficiently manage their cash flow.

As of July 2017, more than $1.57 trillion was in circulation
— up 35% from the $1.1 trillion at the end of 2012

cash in circulation retail

Manual cash handling increases your risk of losing profits

One of the main priorities for retailers is to provide quick and convenient service to their customers. However, retailers are faced with accountability issues, risk of theft, counterfeit fraud, and accounting errors when they manage their cash manually.

Combining the challenges above with limited resources, time and the fast-paced environment, often results in poor cash handling procedures.

When retailers use manual processes, human error is inevitable. It opens the door for double counting or having too much cash on hand, which can lead to lost profits. Not to mention, leaving cash exposed in the store also increases the probability of theft.

Additionally, businesses struggle with the amount of time spent on their cash handling. Retailers can spend 5 or more hours a day preparing drawers, pulling excess cash between shifts, going to the bank and reconciling deposits. As the time it takes to manage cash continues to add up, essential employees are pulled away from performing customer-related tasks. Plus, duties like making trips to the bank not only pull employees away from serving customers, it also puts them at risk of external theft.

Further, when funds are managed manually from the transaction to the bank deposit, it leaves little visibility for management into cash flow, store totals or to identify any discrepancies.

Retailers are looking solve these challenges and protect their cash without increasing the amount of time, cost, or labor to manage it. Fortunately, with the development of new technologies and services, retailers are able to automate much of the previous manual tasks.

Automated Cash Management Systems

By pairing well-trained employees with automated cash management systems, businesses can increase employee efficiency and productivity, while lowering costs and profit losses. Retailers can now integrate cash management solutions such as armored trucks and smart safes to provide quality service to customers without having to compromise the safety and protection of their employees or cash.

Armored Car Services

Deposit pickups by armored trucks not only protect the retailer’s cash, coin and other valuables, the service also protects employees. Trained professionals securely transport deposits to the bank and in return can deliver change orders right to the retailer’s door, mitigating any risks of theft. The service completely removes the need for employees to transport currency to the bank enabling them to focus more time on running the business.

Smart Safes

Cash management devices, such as smart safes, are compact and can be placed directly at the point of sale to ensure effective cash handling begins immediately after the transaction. Before employees are able to deposit funds, the safe requires a personal identification code which increases accountability and visibility so management can track safe activity. Additionally, smart safes validate every bill deposited checking for counterfeit currency. Smart safes minimize the risk of internal and external theft, while automating tasks typically susceptible to human error.

Smart safes can also be integrated into other cash management services such as armored pickup and access to daily credit with partnering banks.

Daily Credit

When retailers partner with services such as smart safes and armored services, they can also receive access to daily credit. Smart safes are able to wirelessly communicate with retailers’ banks to accelerate the availability of funds. And when adding armored services, retailers can order their change to be delivered directly to their business – eliminating the need for risky trips to the bank, reduce banking and processing fees, and time spent on statement reconciliations.

Cash Visibility and Reporting

Finally, incorporating an all-inclusive cash management solution, with armored pickups and smart safes, enables retailers to increase their visibility into their cash flow. Through comprehensive dashboards, retailers can track every dollar passed from customer to cashier at the point of sale until it is safely deposited into their bank account.

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See how a leading apparel chain manages an unusually large volume of cash-based transactions with
Dunbar’s Cash Management services.