Closed Loop Cash Handling Technology at the P.O.S.
The Buck Stops Here
In retail, cash is still king, but businesses must consider modern technology to help deal with the many pressures and problems of cash loss prevention.
Cash is not dead. Those who claim that it will be swept aside by a range of payment alternatives fail to recognise that according to the recent ‘The Way We Pay 2010’ survey by The Payments Council, cash is still popular in six out of ten transactions; and despite the growth in card transactions, shoppers still prefer to use cash to pay for their goods. Across a variety of retail sectors from quick service retail, convenience retailers and forecourts through to the traditional high street stores, cash is still used in the majority of retail transactions.
Convenient for customers, but not so convenient for retailers, cash has always been a problem to manage through the business. Cash handling is expensive and time consuming – time for the cash transaction itself, time for the correct handover of the till when changing shifts, time for counting and sorting notes and coins, and time for packing and booking cash in the back office. On top of all this, cash must be transported to the bank and ATMs must be replenished.
And cash is vulnerable; retailers constantly look to reduce their losses from shrinkage and burglary. According to the 2009 Global Retail Theft Barometer, Professor Joshua Bamfield discovered that the level of global retail theft reached $114.8 billion. This represents a significant increase of 5.9% over last year’s total of $104.5 billion.
This survey also found that retailers decreased their spending on loss prevention and security by $900 million, no doubt in response to their general need to trim budgets in tough times. However, the correlation between $900 million in decreased security spending and a $10 billion increase in theft is very significant. This highlights the importance of continued advancement and improvement of loss prevention programmes.
Businesses can ill afford to view retail crime as a harmless or intriguing social phenomenon or simply as a ‘cost of doing business’. This ignores the impact of the cost of retail crime to the general public, which, in 2009, cost 553 million families in the 41 countries surveyed an extra $208 on their shopping bill.
With these startling figures in mind, retailers should look at solutions that limit the unnecessary handling of cash and the benefits of closed loop cash handling. Unless securely managed, a retailer’s cash is continuously at risk. Retailers should consider technology that reduces the access that criminals could potentially have to cash within the store. A retailer that accepts and passes on counterfeit cash, no matter how unwittingly, faces not only economic loss but also, and perhaps more damagingly, a sharp decline in customer confidence.
There are a host of advantages to having closed loop cash handling technology at the POS. It allows customers to pay easily and quickly using notes and coins, and receive their correct change.
Automated cash processing is gaining ground and retailers are continuously reviewing their processes, looking at the checkout, back-office and transportation routines in search of time and cost savings. If retailers rely partly or entirely on manual processing, cash handling can be labour and cost-intensive. By implementing closed loop cash handling technology, retailers can better use their resources because they spend less time on cash management tasks and more time on activities that generate sales such as assisting customers and completing sales transactions.
As cash is not exposed with closed loop cash handling, retailers also reduce losses from shrinkage and burglary, which greatly improves security. Closed loop cash handling not only limits the access that criminals may have to cash but also helps minimise the risk of counting errors and theft by staff, a problem that many retailers wouldn’t like to admit having. In an industry where seasonal staff are essential to ensure that customer demand is met during peak periods, there remains an opportunity for less honest members of society to take advantage of busy periods in-store for their own gain.
Cash will continue to flow into the retail sector. Paying with coins and notes is as popular as ever. The challenge for retailers is to handle these volumes without higher costs for both cash processing and increased security. The discussion on introducing measures to prevent loss needs to be had at board level to ensure businesses continue to thrive.
Tuesday, January 25, 2011