CSP Exclusive Study: Hard to Handle
Effectively controlling cash top concern for retailers in study
"Money can’t buy me love," The Beatles sang. But a little TLC when it comes to cash management can buy you more peace of mind. And strategies to curtail worries such as miscounted moola, sticky fingers in the till and funny-money flimflam artists can carry a lot of currency among retailers, many of whom are vexed by these and other woes that occur along the money trail that begins at the register and ends at the bank.
To identify these legal-tender troubles, CSP recently conducted its fourth annual cash-management study, which generated input from 200 c-store respondents who operate and/or influence decisions related to cash flow/banking/cash management. Corporate Safe Specialists/FireKing Security Group commissioned the study, which was completed in February. Most of those polled operate a single store (44%), followed by two to nine stores (29%); 10 to 49 locations (13%); and, finally, 50 or more outlets (14%). (Participants in the 2014 survey may vary from respondents to the 2013 survey.)
Among the findings from the study:
▶ Mishandled money and internal theft continue to plague operators. For the fourth consecutive year, the two most serious cash handling/management problems facing c-stores are:
- Inefficient cash handling, which includes counting, recounting, reconciling discrepancies and making bank deposits. Seventy percent indicated it was a serious issue, up from 62% in 2013; 30% say it has increased in seriousness;
- Cash shrinkage. This year, 55% called it a serious issue, down from 64% in 2011; 28% said its seriousness has increased.
▶ Counterfeit currency placed third as the most serious concern (31%). That’s up 5 percentage points from 2013; 40% say the seriousness of this issue has increased over the past year.
▶ Bank-deposit discrepancies involving fees, time and effort to resolve rose from the No. 7 most serious issue in 2013 (20%) to No. 4 this year (25%, up 7 percentage points from 2011), with 19% indicating its seriousness has risen over the past year.
▶ Burglaries and robberies decreased this year (ranking No. 5 vs. No. 3 in 2013, at 24% vs. 27%, respectively), especially among single-store operators (a most serious issue for 18% vs. 28% last year).
▶ Only 15% of respondents chose lack of information for cash forecasting as a serious issue, down from 25% in 2013; also, this issue dropped in seriousness among multiunit operators (10%, a 13-percentage-point decrease from last year).
▶ In a reversal from last year, more multi-unit operators selected inefficient cash handling as a top issue than operators with one store (73% vs. 65%, respectively, in 2014 compared to 59% vs. 65% in 2013).
▶ At least 75% of all respondents, across all four years of the study, indicated that the seriousness of each cash-handling management issue identified has increased or remained the same each year compared to the prior year.
▶ The top five cash-management devices, tools or processes that respondents have in place are low cash in registers; secure business-rated safes; manual drop safes; separate coin/bill storage and access; and remote visibility and/or monitoring of safe activity. The latter ranked No. 7 in 2013, but the first four have ranked in the same order four years in a row.
For the second consecutive year, inefficient cash handling topped the survey list as the most serious cash handling/management issue for c-stores.
John Rhoads, senior vice president of product channel development for Fire- King Security Group, the New Albany, Ind.-based parent company of Corporate Safe Specialists, says inefficient cash handling often has a lot to do with the high cost of labor today.
“Maintaining and hiring employees is costly,” he says. “Often, for cash-handling procedures, a c-store manager has to pull someone off the floor to be able to count or manage money in the back room, and that can be expensive over time.
“So anytime you can replace manual processes with data, it’s a good idea.”
Toward that end, Bruce Kayal, vice president and head of sales for Garda World Cash Services, Boca Raton, Fla., encourages operators to adopt technology solutions such as smart safes that “take a lot of the day-to-day manual requirements out of the equation.”
|Cash-Handling and Management Issues||Most Serious|
|Inefficient cash handling (employee productivity loss: counting, recounting, reconciling discrepancies, making bank deposits)||70%|
|Cash shrinkage (internal theft)||55%|
|Bank deposit discrepancies (fees, time and effort resolving)||25%|
|Robberies and/or burglaries||24%|
|Inability to track cash flow between POS and safe||18%|
|Cash exposure (cash not held in a business-rated safe)||16%|
|Inability to transfer data between safe and back-office systems||15%|
|Lack of information for cash forecasting||15%|
|Lack of detailed safe transaction data to resolve cash discrepancies||11%|
|Safe not linked to bank allowing for provisional credit||10%|
Source: CSP/Corporate Safe Specialists/FireKing Security Group 2014 cash management study