The Evolution of Cash Management

Smart safes are getting smarter and so are the convenience store operators who use them.

By Howard Riell, Associate Editor

It’s all about the money, so handle it intelligently.

Having a smart safe—and training employees to use it effectively—relieves a lot of the traditional headaches associated with handling cash, according to Los Angeles-based retail security expert Chris McGoey, president of the Crime Doctor security group.

“It just takes a lot of the old issues out of the equation with regard to dropping money in safes, and shift managers having access to the safe. Before this technology was available, if a robber came in he could literally hold a gun to a manager’s head and threaten his life if he didn’t open the safe. With this type of safe even robbers know that they can’t do that anymore.”

Making change is a huge part of any store’s day-to-day activities. New technology is arriving in convenience stores that allows bulk coin and note dispensing. This system allows a cashier starting his shift to get all of the change he needs with just a couple of keystrokes.

As cashiers needs change during the day they can go back to the machine and get, say, $1 in nickels or $5 worth of pennies. This is a welcome feature for the retailer, who has to keep track of it all. Every detail has to eventually get keyed into the computer manually in order to determine whether or not that employee was over or short at the end of the shift, based on their cash register sales.

Protecting Cash
The other component of an effective cash management system is giving clerks the ability to drop money immediately, and then retrieve additional funds if they should need it.

“The new equipment has just made cash drops easier, better and faster,” McGoey noted. “It aids in creating deposits and those kinds of things.”

For example, in typical cash management practices, a big question that is often asked is, “How many times was that dollar bill touched from the time a patron gives it to a cashier until it gets to the bank?”

Retailers excelling at cash management have been able to reduce that number to just one or two. But to get to where they need to be, a majority of c-store chains are still in need of technology upgrades to include items like smart safes.

“You can go into the independent stores and mid-sized chains and you’ve still got the owner putting change in the cigar box. He is a big-time target,” McGoey said. “That’s what these safes are—high-tech cigar boxes. The function is pretty much the same. You take the money in and put it in a secure place. But this way you limit the amount of handling once the money goes in the safe.”

Features and Benefits
A smart safe feature for which retailers are increasingly opting is one that permits check cashing, a relatively new application that is growing very rapidly in convenience stores. For example, a customer may walk in with an $800 check and the desire to wire $100 to family overseas. That means you need to have access to $700. If you try to keep that money in the cash register you become vulnerable and a potential target for theft. Keeping the money out of sight and accessing it on an as-needed basis dramatically improves store safety.

Yet another feature helping convenience retailers stay competitive is giving customers debit-card cash back. C-stores that don’t want to keep large amounts of money in the till have been losing business to supermarkets that do this routinely. “This feature gives c-stores the power to satisfy the customer who hands a clerk a debit card and says, ‘Oh, by the way, give me an extra $20; I’m going to lunch.’ There is no risk to the store financially because it is a transfer from the customer’s bank to the merchant’s,” McGoey said.

Another smart safe feature of value to c-stores involves lottery payouts. In states like Texas, retailers must hand up to $600 in cash to lottery winners. Keeping that much cash on hand for lottery winners is a dangerous practice.

“If retailers put that much cash in the drawer or in a safe somebody in that store is going to have a gun put to his head and told to open that safe,” said Ed Grondahl, executive vice president for Tidel Engineering in Carrollton, Texas. “This is the kind of information that gets out to thieves and can be very dangerous for employees.”

Still more savings—this speaks directly to return on investment—come from not having to purchased rolled change from banks. One national convenience store chain was reportedly able to save more than $1.5 million a year in rolled coin expense, Grondahl said.

Provisional credit has evolved into a major issue for retailers that routinely need to have armored car cash pickups in order to have cash available and to get large amounts of cash out of the store for security reasons. Today’s smart safes can transmit the amount of money in the deposit to the bank—for example, at 2 a.m.—while the money stays in the store safe. Instead of seven armored car deliveries a week at roughly $50 per pick up, stores can schedule just one, saving hundreds of dollars. Multiple that by 52 weeks per year and the ROI alone pays for the system.

“Most every bank in the U.S. that has more than 20 branches is offering provisional credit because Bank of America, Wells Fargo, Chase and all the big boys offer it,” noted Grondahl.

Other Considerations
The major mistake many c-store operators tend to make even with smart safes is not using the technology as designed. “They still have to manually insert $20 bills into the machine, for example,” McGoey said. “They still manually have to work with deposits or armored car transfers, if they have them.”

The location of the safe has also been a source of ongoing disagreement over the years. The issue hinges on whether or not the safe should be visible. “I’m of a school that believes safes should be completely visible from the counter where the customer stands,” McGoey said. “This way, customers can see that it is a substantial safe. When that’s the case, potential robbers know that when a sales clerk gets a large bill like a $20 or a $50 that the bill gets immediately dropped in the safe. There is also signage on the safe saying that the clerk cannot open it.”

Relieving managers of cash-handling chores also leaves them more free time to service customers. “When you’re hiring a store manager what are the two or three key things you’re looking for in order to know it’s the right manager? I’ve always asked folks, ‘Is accounting a skill you want them to have? Or is it more training, creating a customer-friendly environment; making sure the bathrooms are clean, that the coffee is fresh because it hasn’t been sitting there too long?” Grondahl said.

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