It’s a cash drawer – not a business!

A LinkedIn discussion recently contemplated the question, “Should cashiers be required to pay back shortages?” Here are some snippets of the excellent dialogue:

  • “Yes (They should pay back the shortages.) provided . . . only they had access.”
  • “No! This creates a condition where the employee can take a short term loan from the register.”
  • “Yes, maybe and no. A bank or financial setting, absolutely yes.” 

An unjust accusation cost the company over $400K!

 In the most egregious case, a cashier was forced to pay a $20.00 shortage which she maintains was not her fault. It led to her taking action to recoup that loss. Once she figured out how, she proceeded to steal over $400 thousand in the ensuing 8 years. 

Tills and wallets should not be interconnected

 If a cashier feels an association between the till and his wallet, you have a problem. A thousand $1 bills looks like a million to someone not used to being around cash. The quicker the employee starts looking at company cash as just another SKU, the better off you are. Until then, we recommend you treat overages and shortages as you would any other inventory problem that can be tied to an individual.

Cash is immediately fungible unlike stolen product that has to be fenced. Therefore, until management can train people to be honest, make sure to have significant controls in place, and procedures to limit the amount of exposed cash.

  • Audit new employees, often.
  • Verify turn-ins from new cashiers at the end of their shift, until they earn your confidence.
  • Reduce exposed cash by implementing technology to accelerate drops, or smart-safes that allow for the immediate verification and securing of cash.

A very wise and successful cash vault operator once told me, “We don’t hire honest people. We just hire people!” Prevent. Trust. Verify.

Can we cycle-count cash?

Retailers have learned that cycle-counting . . . the process of counting something often, but seldom everything at once . . . actually decreases shrinkage. That’s because they spot problem areas quickly, and can take action sooner. Would it work for cash?

Is “Z” just an old key?

 If like me you have saluted the “Z” report flag for years, this might seem like sacrilege. But the “Z” report, so named because mechanical registers used to have a Z-key to read and delete totals, may be archaic in our data-rich world. POS systems are highly-configurable. And solutions such as smart-safes make short work of the process of actually counting cash.

  Here is an approach you might consider:

  • Categorize everyone who handles cash by tenure, and Over/Short history.
  • Daily counting – Short tenure. (End of shift, if possible.)
  • Daily counting – Long tenure + bad history of differences.
  • Weekly or monthly – Long tenure + good history of differences.
  • Random checks on everyone.

 What would happen if you then just aggregated the remainder of the cashiers or lanes into one large declared total, and balanced against that? We’ve seen versions of this – grocers balancing by lane;  Even some c-stores accounting for the weekend as just one day.

 Sometimes the juice isn’t worth the squeeze. If you are spending too much time, chasing too few dollars, you might give this a try. What do you think? Heresy . . . or common sense?

Have we marginalized Loss Prevention?

When one side moves, they all move.

 Any engineer will tell you, “Cost, Specifications, Schedule. It’s a triangle. Adjust 1 side, the other 2 sides move. ” For example, adding more features means your product will be developed later, and cost more. The same goes for Loss Prevention, especially in this economy. We define the LP Triangle as, “Loss Tolerance; Organization; and, Controls.”

What level of cash loss is okay?

“None!” would be the politically correct and unrealistic response. But we are setting ourselves up for disaster. I recently worked with a retailer who used to have a staff of 3, handling LP and Safety. Now, it’s just him . . . and he has the added responsibility of Training! Sound familiar? Talk about skimming the waves . . .

No good choices.

Some say that the 2 steps between honesty and dishonesty are NEED and OPPORTUNITY. No one would argue that “need” is up. Unfortunately, LP staff reductions have also increased “opportunity.” Looking at our triangle’s moving sides, what are the options?

  • Accept higher losses. This may seem more like a consequence than an option. But unless you take deliberate steps, that side of  your triangle will grow. When the bad employees figure out the floor of your investigation threshold has moved, say from $5.00 to $10.00, watch that $500.00 monthly number rise. They may be testing you even as you read this.
  • Protect your assets with technology.Smart-safes and single-control cash procedures limit exposure at store-level. Investing in the most secure, tamper-evident bags to protect cash deposits and shipments will pay big dividends, especially when you communicate to other parties a strong understanding of the protection you pay for. Saving a few pennies to buy bags known in the industry for pre-voiding and false-positives may land you in an indefensible position.
  • Protect your people with training. It’s a chain of custody, not a rope! “Give a signature/get a signature.” Your signature says you accepted an in-tact package with no signs of tampering. Rushing at the check-in window without spending a few seconds in inspection because you are understaffed, or accepting a change order delivery at a store without verifying the integrity of the package is like driving with your eyes closed. You may have accepted the responsibility for any loss associated with a evidence of tampering.

“Shore-leave cancelled until morale improves.”

Lastly, we encourage LP directors to regularly communicate to other senior managers,  factual data that reflects the implications of cut-backs. It’s going to take a while to turn this economy around, with more folks switching from plastic to cash. Are you ready?

Unbundling Remote Cash Capture

Whose problem is it?

The market for bundled smart-safes has exploded, as more banks offer in-store provisional credit from smart-safes. End-users and even service providers want options. Banks, armored carriers and technology providers are painting the landscape with “mix-and-match” options that allow considerable vendor-independence.Currency pile

Many problems never see the light of day, from the customer’s perspective, so long as a single provider has access and control over the smart-safe, including its audit trail, technical support, deposit verification and information. The service provider has a vested interest in keeping the noise level low.

With freedom comes responsibility!

Unbundling can result is situations where problem-solving is really complicated. Users will expect quick resolution, especially if there is a possible cash shortage. Someone will eventually have to play referee, chairing a multi-vendor corrective action committee or assuming a product management role.

Improve your chances of success.

You might consider some of these approaches in your pursuit of excellence:

 1. Limit yourself to a single bundled solution by market.

2. If possible, establish a “standard” for the way you receive safe totals and deposit verification & settlement reports. New middleware solutions are being introduced to facilitate this.

3. Consider separating sales audit from your banking timeline. Wow! This is a major paradigm shift, but one that simplifies things while opening windows of opportunity.

4. Maintain a seat at the table with your multiple vendors, by appointing a specialist.

5. Put in place contract language that spells out roles and responsibilities for working through disputes.

Any approach should maintain the fundamental priorities – First, balance; then, get the job done without adding back-office hours; and, only then look for added value.  By embracing this new freedom with realistic expectations and goals, you’ll enjoy the best of the best!

Forget virtual vaults – go vertical, go deep

Important – not always strategic!

All clients are important. But, not all clients are strategic. Let’s talk about that 10 to 20% of your client base that delivers 80% or more of your fee revenue. Setting up virtual vaults to serve strategic clients outside your footprint is important. However, it is a horizontal solution to a geography problem.

We need depth.

You are being challenged to differentiate yourself from competitors. One sure way is to add value beyond basic deposit gathering. You can achieve this by vertically integrating your money room services with your client’s daily operations. The first step is to understand your own capabilities, so you had better plan to spend time with your vault operations group.

Next, consider the client’s store and your money room as part of the same process. Understand how cash, coin and checks circulate into, around and beyond his location. Then, find ways to remove cost. Lots of it! Remember the “Re-engineering the bank” era of the nineties? Banks wanted to reduce costs by 15, 20 and even 25%. Take that same approach on your client’s behalf. You are looking for major savings. Here are some suggestions:

  • Change funds - If your client has added non-standard pay-points such as self-checkout, how does he load cash and coin? Can you tailor the way you deliver change to reduce labor at his end?
  • Deposits - Has his world evolved from traditional cash drawers, to pay-points that produce batches of unsorted notes? If so, perhaps strapping up the deposit is an extra and unnecessary step, provided you have the technology in place.
  • Checks - You probably have him on RDC. Have you secured they checks post-imaging to avoid the embarrassment of having them reappear?
  • Information - Is your technology sophisticated enough to provide information below the DDA level? Can you provide register, lane or even cashier balancing?  If the answer is, “Yes,” then you may be able to help him shut down his cash offices.
  • Logistics - A client whose cash is strapped and accurate might be a candidate for strap- or bundle-bags. Get an agreement to extend the cycle for reporting a difference . . . a couple of extra days . . . and you might avoid verification in your money room, if you intend to use that same cash at a branch. Again, we are looking to eliminate wasteful effort. Your savings might be his gain.

We hope you can find savings that add so much value to your clients, that fee reductions aren’t a consideration. Your client is running lean on labor, and fighting for “capex.” Now is the opportune time to leverage your investment in technology while creating a strong, product inter-dependence.

Is your cash physically fit?

Cash on CRTMore cash, more loss.

The NRF  Tuesday released a study saying cash or debit will be the payment of choice this season for 71% of shoppers. The good news is that cash still has the lowest, per-transaction cost. The bad news is that unlike electronic payments, cash grows physically as volumes increase.

Automation is at its best when volumes increase.

When you count manually, even a marginal increase in the number of notes taken adds to your counting time, especially since many notes are counted 3 and even 4 times. Not so when you use automation. When you count at 20+ notes per second, volume increases have little impact. In this regard, we coincidentally last week learned of the next big advancement in desk-top currency counting technology, from Cummins-Allison Corporation. This blog doesn’t endorse any manufacturer, but this is a significant step forward. The i100 series JetScan iFX digitally reads the denomination and captures an image of the serial number at 1200 notes per minute. 2 things about this technology are germane to this discussion:

  • Capturing the serial number brings an entirely new level of evidence, if your chain-of-custody is up to par. More cash equals more differences (aka, “shortages.”)
  • The cash does not go into a cassette. Desktop solutions are less impacted when volumes increase.

5-Point Check-up for Better Currency Health:

  1. If you skim your registers based on the clock, rather than dollar limits, consider increasing the schedule.
  2. Review change funds and change orders. More cash transactions might demand more change.
  3. Look at any physical constraints you experience in your environment.  If you use technology that counts and immediately stores cash in a cassette or drum, look at your higher volume locations. You may have to increase capacity. Are your deposit bags able to handle your increased volume without going to additional deposits? If you pay a fee for each deposit slip, it may be less expensive to go to a larger bag . . . and more simple to reconcile your bank and sales audit.
  4. Look at your armored car schedule, and the amount of cash kept in the store.
  5. AND THE BIG ONE – Keep a close eye on cash refunds. More cash transactions . . . more temptations.

Smart-Safe: Just a reverse-ATM?

Banks are catching the wave, but

 Often, a complex concept is more easily understood when compared with a known product or service. Many times when explaining the ATM with cashconcept of a cash-counting safe to which the store has no access, bundled with armored transportation and cash processing, the retailer or banker says to me, “Oh, that’s just like a reverse ATM. Now I get it!” As that Hertz™ ad says,

“Not exactly!”

This technology reads and secures cashier drops in cassettes. But it also accomodates other transaction critical to the store, and which have to be reconciled. Two examples are envelopes containing cash that cannot be read, and possibly change fund payment transactions. The differences will likely push you outside your comfort zone.

  • Smart-safes probably won’t have the kind or transaction-level communications with the bank you experience with ATMs.
  • The content has to be proven in total. Cassette Cash + Drop Envelopes makes reconciliation a “many-to-one” process, similar to Wholesale Lockbox. An ATM looks to us more like Retail Lockbox.
  • There may be a Change Fund transaction built into the system, which posts separately from the deposit. Now you have two credits, and multiple debits.
  • Banks are unlikely to process the contents because some cash is exposed during removal, so revenue opportunities rest with providing credit, including provisional-credit-from-the-safe. The common methods of removing cash are cassette-swap, or on-site cash extraction from the cassettes. Drop envelopes might be removed by at store employee, but they may or may not go into a separate, tamper-evident bag. For these reasons, the carrier is more likely to verify the contents.
  • The smart-safe is inextricably tied to the store’s sales audit process. Information has to be timely, accurate and available at a granular level so that the store or restaurant can resolve problems of cash-shrinkage.

The bank brings great value to this service. The challenge is to identify where you add to most value, and the least complication.

Payment methods can enhance customer experience

Pay-island kiosks create a win-win

An article just published in CSP Magazine (October 2009 – see link) amplifies the value of payments complementing the customer experience.

For several years, convenience store retailers have attempted to implement bill acceptors on gas pumps. It has been a tough sell.  I once evaluated this on behalf of a major armored carrier and the leading supplier of bill acceptors. The study concluded it was logistically impractical for an armored carrier to service bill readers at each pump. “Pay-island kiosks” (PIKs) proved to be a practical and successful solution. The kiosks, located to accomodate payment without having to enter the store can be configured to also accept debit and credit card transactions.

Cash usage at c-stores  rose 3.8% in 2008

Cash represented 46.8% of all payments at convenience stores last year, at the expense of plastic. Retailers provided price incentives for cash purchases as they dealt with the reality of credit and debit card fees. Those fees averaged $58,903 per store, the second-largest expense next only to labor! According to the article, more than 4000 PIKs are installed, processing $3 billion per year in cash. Everyone wins:

  • Customers enjoy pay-at-the-pump convenience.
  • Security is less of an issue since they are serviceable by armored carriers.
  • Merchants can drive more sales to cash, their least expensive form of payment relative to cost per transaction.

Have you approached payment methods as a marketing tool?

 Consumers value the purchase experience, not just the purchase. Does your approach to payment acceptance meet your customers’ desires?

 

Texting at POS – Payment methods affect your business

TextingIs ”checkout rage” next?

 A driver last evening edged half-way into my lane. A quick toot of the horn fixed things. You guessed it – Texting while driving! What if that same situation occurred, not in the protective environment of a car, but shoulder-to-shoulder in your checkout lane? As someone who quickly gets “lost in space,” anytime he holds his PDA, I think that the phone- as-a-wallet concept is great for a vending machine. But, should we risk turning our checkout into a social media spot?

Payment methods should enhance the customer experience.

They do so when they are harmonious with the broader scope of the transaction. Some transactions have inherent wait times. The payment process can be conducted simultaneously with other activities like wrapping or bagging the purchase. And, they allow the merchant to offer payment types that have lower transaction fees.

  • Drive-thru restaurants tell you the cost of your meal immediately after you order. You have time to get your cash ready while you move forward in line.
  • A gift shop can even have you fill out a check, while they wrap your purchase.

Here are two recent examples I experienced where the payment method made for a great experience. I was last week in Canada and had a lightning-fast transaction at a coffee shop. I tendered a $5 note, and received back NOTHING BUT COIN!!! (Canada  replaced $1 and $2 notes with coin, years ago.) Coin was easier than currency for the cashier to pick from the drawer, and I just dropped it in my pocket.

At dinner that same day, our server brought to our table a wireless payment unit, complete with printer. I swiped my card, entered the tip myself and my card never left my hand. Fast. Secure. Nice.

Back to that checkout line: The name says it all – “CHECKOUT.” The customer is there to finish his shopping experience, not conduct business or enter the world of social media. I would suggest that very few checkout environments are improved by a customer interacting with his PDA. But, then . . . I’m a Cash Advocate.

Contactless payments: Get the FULL value!

RFID chip

Any time you change your payment mix, make sure to look at how you handle cash.

There they were! I was grabbing a coffee at my local bagel shop, when I saw them: 2 contactless payment terminals. And why not?! The speed and convenience are obvious, especially where you have commuters standing behind you, need their caffeine fix.

Suppliers of contactless technology say the QSR industry is “the next killer app.”

It is reported that there will be 80 million contactless cards in circulation by 12/2009. Here is a payment method that might just pay for itself.

The SmartCard Alliance says contactless payments are 21.2 seconds faster than cash, and 14.2 seconds faster than the average card transaction. I’ll leave it to the industrial engineers to argue about what constitutes the beginning and end of a transaction, and the impact of simultaneous activity. But, let’s face it – fast!

Some say that 6 seconds of savings in a drive-thru adds 1% to sales.

(There are experts that argue on both sides of that 1% argument, though.) If that holds true for my bagel shop, this would offset the transaction fees. Here is a technology that provides benefits to both the consumer and the business owner, and I expect it will really start to change your payment mix.

If contactless payments are starting to affect your cash volumes, you owe it to yourself to revisit the way you handle cash. Deposit frequency, change fund size and armored car schedules should all be reviewed. This is the logical extension of implementing contactless payments. If you don’t, then your expense of having cash in the business just grew as a percentage of sales.

Is your cash suffering from expense-creep?

(SPECIAL EFFECT VIDEO – IT’S NOT YOUR COMPUTER!) It’s state-fair time. Going to the Indiana State Fair reminded me of the shock I had doing a re-engineering study on a huge amusement park. It had all the latest rides, games and talking animals.But, progress hadn’t found its way to the back end of the business. With each step of additional revenue, they  added one more piece of cash-counting equipment. Years of innovation and savings had passed them by.  New technology, legislation affecting checks, plus the establishment of virtual vault networks by banks all are good reasons to take a close look at YOUR backroom.

Have you captured economies of scale?

 Counting cash is probably not a core competency of your business. It’s easy for costs to creep up disproportionately. This is especially true for money rooms, since the activity is hidden and few businesses employ in-house experts.  Changes in volume should be paired with new, back-end technology and legislation.

Here’s a 5-step health check for your cash:

  1. Go back 5-years and compare your volume of cash deposited, with your bank deposit fees. Don’t forget to look at store labor, too.
  2. If you have added self-checkout systems, have you re-engineered your backend to handle unsorted notes?
  3. Do you deposit 10 or more checks each day, taking them to the bank? Most major banks offer outstanding products that  eliminate the need to move this high-value paper to the bank for deposit. Some solutions can be combined with guarantees. And, by converting them to electronic items, checks move more efficiently through the banking system, reducing the chances of you eating a bad check.
  4. Do you deal with more than 1 financial institution per market? Ask your bank or armored carrier about their “virtual vault” service.
  5. Is your armored car schedule the same as it was 5 years ago? Compare it to the amount of cash you handle and see if it makes sense.

A CEO told me just last week that he is looking to save every possible dollar. How about you? Get behind that money room door and take a look!


 


“That’ll be $4722.00. Welcome to retail!”

VW3

Only you can truly protect your assets.

My car got slammed last week by a hit-and-run driver. You get a feeling of  helplessness when you realize the chances are slim to none of having a “Perry Mason” investigation in the name of justice. It made me think of retail cash shrinkage.

Baseball-sized hail riddled our neighborhood recently. Roofing, siding and window crews came from as far away as Texas and my car had to be parked on the street during the work. Although there were over 30 witnesses to the accident, the policeman was right when he said, “You will never see that truck in the neighborhood again.”

A Loss Prevention Manager for a major petroleum company shared with me that at least once per year, a dishonest employee steals all the cash he takes in during a holiday weekend. The employee enters the drops in the POS system, but since he doesn’t have a smart-safe, the drops aren’t verified. The crime goes undetected until the armored car company shows up to empty the safe.  As my friend explained, when he reports the crime to the police, they ask, “Anyone hurt?” When he tells them, “No,” the police inevitably say they are too busy to investigate, and “Welcome to retail!”

What can you do?

  1. Get away from entering drops manually.Look into implementing cash-verification technology that reads and secures the cash, AND electronicaly reports the drops to your back-office or POS system.
  2. Be suspicious whenever an employee volunteers to work extra shifts over a long weekend.
  3. Watch for patterns. My experience has been that employees steal a little, before they steal a lot.

If you start with the assumption that no cash loss can be recovered, you have taken the first step in truly protecting your assets.

Has your cash gone viral?

How many people know the amount of cash you keep in the business?

“Coincidence” is an over-used word when investigating cash losses. Isn’t it odd? Your safe was robbed at the point of maximum exposure. Somehow the bad guys knew your armored car schedule, and when the safe would contain the most money. Heck, they even knew which safe held held the deposit and where to attack the lock!

The dynamics of “social networking” is a great lesson in why you need to protect your cash information. Twitter, blogs, websites and emails are effective because once released, they begin to have a life of their own. An email may be deleted, only to be retrieved months later. Or, it immediately gets passed on to others. In the same way, present and past employees speak about your business. Make sure they aren’t talking about your cash! You might consider following these guidelines:

  • Minimize the printing and displaying of cash totals. If you use a smart-safe or other automated cash accountability, see if “totals” information can be restricted to management-level reports.
  • Don’t expose cash, especially in volume. Even 500 singles can look like a million dollars to someone not used to seeing cash.
  • Minimize the number of eyes that see your armored car paperwork. (That goes for change fund orders, too.)

Lastly, secure your change fund. I’ll never forget going into a store to buy a soda and seeing nearly $1000.00 in boxed coin on the floor beside the safe! The value of each box is printed on the outside. ”$500.00 Quarters” in bright orange caught my eyes . . . and everyone else, I’m sure.

Keep it safe!

Don’t be a specialist in trivia!

“Learn the difference between spending time and investing it.”

My morning devotional had a great application for all businesses. Dr. Robert A. Cook went on to write, “Once you have determined your life goal, make every moment count in some way toward its attainment. Don’t be a specialist in trivia.” Wow!

Do your managers understand the difference between spending time and investing time?

Here’s a fun habit I’ve adopted, that you might use when you are out and about. When I go into a store or restaurant that is really run well, I seek out the manager. I ask him to consider comparing his location to one that doesn’t perform as well, and ask him this:

  1. What 3 things you do that make this  a GREAT location, and a  not poor-performer?
  2. Where does cash handling fall into that category?

Great managers always impress me, with their responses to the first question. The answer to the second question is almost always that it is a non-core, utilitarian function.

2 questions for senior management:

  1. Do you train your managers to invest time, or spend time?
  2. Do they have a clear understanding of tasks that fall into each category?

Why not brainstorm this with your managers at your next monthly meeting? Publish it and make it part of your coaching.

Remember: Counting cash adds no value to the business.

Have a great day!

Embarassing moments: Before virtual vaults.

One of life’s joys is to look back and laugh at yourself.I’ve had plenty of embarassing moments. But the one that sticks out most was when we first introduced automated cash settlement.

The year was 1979. I represented Brandt, Inc. .  My world  consisted of re-engineering money rooms primarily in banks, retail and grocery stores. I had the privelege of being one of the first 5 sales people to launch their new, 16K computer (not a typo!) interfaced to a currency counter and coin sorter.  Not much computing power?  We  guaranteed labor reductions of at least 50%!

A large retailer in my home city ran a central vault, processing receipts from about a 12 stores. Sales associates would turn in 1 envelope per shift. Today, they would use a virtual vault. Our business process was simple: Do an operational study. Test for 2-weeks. If we prove out our savings, the proposal was accepted.

The power of the technology became immediately obvious to management and staff. Of the ~40 tellers, about 10 co-operated. We agreed I would be given the opportunity to work 1/2 day as a teller, to establish a bench mark . . . since I was “experienced” on the system. Speed conquers all!!!

Simple process. Tellers would sign for a batch of work, balance by envelope and cross-foot. Strapped cash, coin & paperwork was then sold to the control teller.

Trouble! One day, the room was short roughly $700.00. Nobody was allowed to leave. The overtime was no consolation, since everyone dreaded having Loss Prevention come on-scene.  Managers recounted the straps and reworked the paperwork. Suddenly, someone said, “That’s roughly the amount of an envelope.”

You guessed it! After diving into the trash they found one unopenned envelope. Fortunately, the offending teller wasn’t scheduled to work there any longer. He just went on his way selling cash-handling systems. (BTW, they implemented the systems and savings exceeded expectations. ;-)

Too often when implementing a new process or technology, we focus on the good stuff and forget the basics.  So, I’ve adopted a discipline:

Priority list for rollouts:

1) Focus on balancing. Otherwise, you’ll lose buy-in. 

2) Get the job done in the time alloted. Employees that work late won’t support the change. Then,

3) Deliver extra value, like time-savings and quality-of-life.

Now that was my most embarrasing moment. But, not the funniest . . .


Deploying Smart Safes: What can go wrong?

The AFP interviewed interviewed me for an article called, “Tips for getting the most out of your Smart Safes.”

The article appeared in the AFP’s February 2009 edition of the “Payments.”My experience has been that these rollouts can be like making sausage . . . great when you are done, but the process can be difficult to watch. Here, paraphrased is the first   7 considerations to help you have a successful rollout.

  • Find an in-house expert.
  • Appoint an in-house trainer.
  • Start slowly. Do it properly.
  • Follow the money, and the information.
  • Get outside the box. Work with your armored carrier and whoever is processing the deposits. Look for win-win opportunities to wring out cost.
  • Find out if minor changes to armored schedules would lower cost.
  • Remember the importance of physical safety.

After the article was published, several other considerations came to mind:

  • Where do you go for help? List the possible issues (recon., missed stops, equipment failure, deposit discrepancies, etc.)
  • When the government issues a new series of notes, how will your technology be upgraded? At what cost?
  • We live in a web-based world. What tools are at your disposal to make it easier to get information like audit trails?
  • What’s the back-up plan? Have you built redundancy into your design?
  • Is the solution scalable? If cash volume increases 50% over the system’s life, what has to be done to accommodate the growth?

You will never have all the answers. As Colin Powell, in his “18 Lessons for Leaders” said, “Once the information is in the 40 to 70% range, go with your gut.” Careful planning and brainstorming will move the percentages in your favor.

Are you asking all the right questions?


Smart-safes and POS Integration.

Moving back-office functions to the front counter has its risks.

Most retailers would like to “electronify” their cash ASAP. Authenticating and securing your cash as part of the retail transaction is a great idea and several smart-safe manufacturers have stepped up to the plate.  But, just as ACH check-conversion at POS was found to slow things down, reading currency within the transaction can have negative consequences unless you do it properly.

An article in Convenience Store Decisions, July 2009 did a great job outlining the operational and loss prevention benefits. (See “Other blogs of interest, Safe at the store.”) But the article doesn’t discuss transaction time, which is a key benchmark. Bill-reading technology is significantly more effective today than it was 10-, and even 5-years ago but it still adds a step to the transaction.Man paying cash

Considering integrating your smart-safes with your POS? Weigh it out.

Advantages:

  1. You can really enforce cash drawer limits. This has obvious security and safety advantages.
  2. Brief periods without transactions can be used productively. Hopefully you will configure your safe network to allow for dropping cash in close proximity to the POS registers.
  3. Improve your odds of getting paid for what you sell! Counterfeit detection can be enforced for higher denomination notes. And, you might require drops before issuing lottery tickets or money orders.

What if the customer hands you multiple notes, or notes that can’t be read?

Your transaction time will suffer. And, while your cashier is focused on dropping cash, he disengages from the customer.

Consider these guidelines when writing your application:

  1.  Have your drawer limit dictate drop frequency, instead of dropping within  the transaction. This let’s you put customer service ahead of cash counting.
  2. Require bill validation on higher denomination notes. 
  3. Plan for failure. We never recommend a location have only a single bill reader, regardless of cash volume. Also, if  you configure a single bill-reading safe for each register, make sure cashiers can share a safe if one fills up, or fails.

Remember, technology should support the core business, not be an interruption.

Provisional in-store credit. Worth it?

A reality!

 That dream is becoming a reality!  A number of banks now work with armored transportation companies to accelerate the usefulness of your deposit. Remember, to use your cash you have to move it to your main bank account . . . where you write checks, borrow and invest. 

 Just like squeezing a balloon, though, every action causes a reaction. You might consider these points before allowing a single feature to drive your decision: Top of envelope Provisional Credit

When will I get use of my  cash and what’s the value proposition?

  •  Find out exactly when cash customers give you on Monday will be available for use. Lay out on a spreadsheet a full month’s revenue, with and without provisional credit. Compare today’s cash flow with all your vendor options. (I say, “all your vendor options,” because they might vary in when you actually see the funds post to your main bank account.)
  • Will your carrier adjust your schedule, if you wish to reduce service days? One big benefit to provisional credit from the safe is that you don’t necessarily have to move the cash as often. Find out how that will impact your price per stop.
  • Is there a negative impact on life safety? Does the additional cash make a location more vulnerable?
  • Do you have sufficient cash storage capacity in your smart-safes to make this work? Make sure you look at your peak periods, and the longest spread you have between pickups. More importantly, plan for failure!
  • What adjustments have to be made to your change funds? Assuming you adjust the frequency of pickups, how much additional change do locations need, and will this impact your bank fees?

There are soft benefits to provisional credit, too. Consider snow storms and freezing rain. You will worry less about your armored carrier showing up late since your cash will already  be on its way to your main bank, electroncially . 

Is it worth it? 

Do the old “Ben Franklin T-account” you learned in accounting class. Your decision should include the financial analysis. Before any one feature drives your decision, make sure to look at the numbers.

Smart-Safe do-over – Take your time!

“Do-overs” can be just as difficult as implementing a new technology or service for the first time. In some ways, more difficult.

If you 4 or 5 years ago installed CompuSafe™, CashLINK™, SafePoint® or Cache$ystems® from one of the major armored car companies, chances are your contract is up for renewal.

It takes discipline when reviewing a decision you made years ago. One pain could have driven your project, such as cash drawer shrinkage or wanting to free up your manager. You solved the issue. In fact, it might feel like you never had a problem! But be careful or the pain you solved could come back.

You are now an educated user. Why not write the specification and have the vendors work to your wants and needs? Here is a guideline to make your present situation even better.

Do a level-set:

Gather the original, decision-making team plus any proposals and notes.
- Why did you invest in the present solution?
- Are those reasons still valid?
- What implementation issues did you experience? Take preventative action this time.

What new criteria are important?

I’ll bet plenty has changed in 5 years.
- Have you reconfigured your stores or restaurants? If so, does today’s safe configuration still make sense?
- Has your cash volume changed? If so, make sure to review your armored car schedule and the capacity of your safes.
- Do you run the business differently? Do the old user permissions and reports make sense?

Find the “unexpected delight.”

What new technology is available? (Touch screens; multi-language; bill readers that accept more than one note at a time.)
- Is the technology able to be expanded if hopefully cash volumes increase over the life of the new agreement?
- Are there new web tools available for downloading audit trails, pushing out new series of currency or software?
- Can you get provisional credit for cash that is still in the safe?

Lastly, factor in the cost associated with removing your present safes and installing new ones. They could be substantial.

Next, we’ll discuss provisional credit . . .

If you just did a do-over, we’d love to hear what you learned.

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