It’s a tedious ritual for many store managers and cashiers: At the end of the workday they count the cash from the day’s sales, try to fix any errors and put the money in a store safe. Every couple days an armored car company stops by to pick up cash, or an employee takes it to a bank.
Now, some banks are pushing technology to make handling cash easier — and potentially less dangerous.
They’re rolling out so-called “smart safes” and “cash recyclers” for use by retail businesses that take in a lot of cash, such as restaurant chains, service stations, grocers and superstores. Their sales pitch: the devices enable stores that have them to cut labor costs and paperwork, reduce theft, and make better use of cash.
For now, the costly machines are being used by a relatively small number of large, cash-intensive retailers. That could change if lower-cost automation and competition among the banks and armored car companies continues to drive down the cost of the service.
“The light has gone on for (retail businesses),” said David Clothier, treasurer at service station chain Pilot Flying J.
He said Home Depot, Kroger and Wal-Mart have all visited the Knoxville company after it turned to Cincinnati-based Fifth Third Bancorp to install and manage automated cash recyclers at almost all of its 500-plus stations over the past three years.
Home Depot said it is using the labor-saving machines in a few stores as a test.
“We’re always looking for efficiencies that remove tasks so we can allot more time for our associates to spend serving customers,” spokesman Stephen Holmes said.
Automatic counting
Smart safes automatically count cash and immediately credit the money to the store’s bank account. Cash recyclers like those in Pilot Flying J’s stations also allow employees to withdraw money from the machines to set up registers for the next shift, keeping track of withdrawals and deposits like a mini-bank inside the store.
Even though shoppers’ use of debit cards and other electronic payments has grown tremendously in recent years, cash payments still account for 40 percent of all transactions, according to a 2014 study by the Federal Reserve Bank of San Francisco.
“Automating these (cash-handling) tasks allows merchants to significantly reduce labor and redeploy back office employees to other areas of the store,” said Federal Reserve analyst Eric Cheng in the study.
Meanwhile, for some banks, the automated cash-handling service offers a chance to attract new business clients and revenues.
“It’s our fastest growing product in treasury management,” said John Bultema, executive vice president of Fifth Third Bank’s treasury management division. He said the Fifth Third is the biggest player in the business of setting up and managing the automated devices, with about 8,500 currently in customers’ stores. He expects that total to go to about 10,000 by year-end.
“You just have everybody trying to become more efficient,” he said.
The operation, less than two years old, generated more than $30 million in revenue for Fifth Third last year.
Clothier, with Pilot Flying J, said the move to cash recyclers allowed the company to replace store managers at about two-thirds of its stores with lower-paid shift leaders, since managers spend less time handling and accounting for cash.
‘Huge expensive waste’
“The most expensive person in our store was spending the most time with cash,” he said. “It was a huge expensive waste of resources.”
Clothier said the move also freed up about $20 million of cash — enough money to open up two new travel centers — because cash that was previously sitting idle in the company’s 500-plus store safes is now credited daily to the company’s bank account.
Robberies also have gone down, he said, because would-be thieves soon learn that employees can’t open the smart safes and cash recyclers.
On paper, the move wasn’t a slam-dunk. Clothier said Pilot Flying J pays Fifth Third roughly $1 million a month — about the same as its labor and other savings — to manage the complicated business of maintaining the machines, arranging armored car pick-ups, and replenishing cash at its stores.
But the switch over has paid big dividends, he said, by simplifying finances, improving employee safety and freeing them up to deal with customers.
“It sets the tone that you should be on the sales floor talking to people. That is a game changer in retail,” he said. “That translates into real live sales dollars.”
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