Loss prevention focus in the recent years has been shifted to security such as CCTV systems and how to tackle inventory shrink, but cash security seems to have fallen off some business agendas.
A recent NRF survey on pandemic-led trends in loss prevention showed that apprehensions and prosecutions of dishonest employees are down, but cost per dishonest employee case is increasing. Half of the respondents reported an average loss of at least $1,000 compared with 29 percent in 2019.
Retailers see the threats, and they are willing to invest in resources to protect their employees, customers and operations.
Of the retailers surveyed, 53% said their companies are allocating additional technology resources and another 50% said they are allocating additional capital specific to loss prevention tools and equipment.
While we typically think of CCTV and security measures as go-to loss prevention strategies, cash management and cash automation is a low-cost way to make big and quick gains in this area. It can positively impact your operations, provide an audit trail and maximise your efficiency with the staff you have.
Gary Smith LPC, Senior Director for Asset Protection at Walmart, told Loss Prevention Magazine that cash management is, “still an important piece that loss prevention and asset protection should be looking at. It’s still an area where you can make a quantifiable difference in the expense piece.”
Automating cash management tasks, such as cash counting, helps to streamline processes, and solves several business problems such as:
Having a clear oversight of current cash handling activities and the associated costs might not be a core part of the loss prevention role, but understanding the costs involved is an important part of the overall business profitability story.
Tony Lawson, Director of Asset Protection for Goodwill of Southeast Wisconsin, estimates that his organization is saving two to four hours per day per store by switching from counting all cash by hand to the use of a Tellermate intelligent Money Counting Machine.
The advantages which come from these time savings will very much depend on your business model. Even where there is no opportunity to reduce headcount directly, time savings do represent significant ROI for the business.
Conducting a pilot study is the best way to assess the time savings and subsequent ROI that could be achieved from faster and optimized cash handling.
It is most important to consider the risks, resources, cash intake and a host of other factors when thinking about investing in a cash handling solution.
Mike Keenan, CPP, CFI, LPC, an industry veteran makes the point that there isn’t always one “right” answer: “Different retailers will need different solutions,” he told Loss Prevention Magazine.
Cash counters, for example, can reduce the time it takes to reconcile a cash drawer to under a minute – and significantly reduce errors. A cash recycling machine can help to reduce bank charges, and make it easier to track the reconciliation process, but are costly and could be replaced by other solutions. Smart safe technology adds a further layer of benefits by enhancing cash security and could reduce the amount of CIT pickups and safe bags used.
Identifying where costs could be cut and speaking with key stakeholders across the business, will help to identify which solution will be best for each situation.
Before investing in cash handling technology, quick service restaurant Panda Express undertook a detailed analysis, as the chain’s director of audit explains:
With more than 1,600 restaurants across the group, these efficiencies add up to a significant labor saving.While these labor savings for the cashiers and managers have resulted in direct cost savings for the company, Panda Express also credits the cash handling technology with enhancing its security and cash controls.
One major problem the cash management technology has directly addressed is the tendency of staff to leave cash drawers uncounted at the end of a shift because end-of-shift cashing up was taking so long – a situation that was causing significant management frustration.
While repeated time savings are easy to give an ROI figure, automated cash handling solutions also deliver savings that are less easy to quantify.
Superdrug credits its cash handling technology solutions with helping to combat in-store shrinkage. And the portable cash counters have also enabled spot audits to be carried out quickly at the point of sale should a discrepancy arise protecting both customers and cashiers from change disputes.
Similarly, fashion retailer Schuh has found that using cash handling technology solutions has helped to create a better working environment for staff. It uses the technology to carry out spot audits, prepare floats and reconcile cash across its UK stores. This has delivered cash management efficiencies and improved accuracy for the business.
However, it has also had a more important – and unexpected – impact, as Josh Puck, an Assistant Manager at Schuh, explains:
It is hoped that this reduction in stress will contribute to improved staff retention, delivering additional cost savings and loss prevention benefits for the business.
Automating cash management can have a positive impact in terms of efficiency, loss prevention, customer service and staff morale.
While the Loss Prevention magazine article does highlight the need to understand the options and how they map to your own retail operations, it also points to a whole raft of benefits that are still being underexploited by retailers.
Which cash automation solution fits your store, staff and space?
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