What is the cost of handling cash?

Factual Questions
21

Most credit/debit systems will give you totals automatically now, a big difference from the days when you had to tally up the swipe slips. If your cash register disagrees with your swipe terminal fairly often, then you’ve got some interesting problems.

Where my wife has worked, procedures said things like “look for problems only if the register count is out by $25 or more.” It’s not worth it for us." Mind you, the registers were typically not out by much if anything in cash, it’s a rare day when she had to say more than $10 was missing. With fast food and younger more confused workers, the cash problems were more common.

Most places take the cash to the back when it hits a certain level, if they are careful. So a robber holding up a cash register may only get a few hundred if that; the 7-11 stores I’ve been in have time-release safes. If they don’t have change, it’s a minute or more to put the bill in a capsule, insert it. and wait for the change capsule to pop out, and you can only get so much out of the safe at a time - probably less than $100.

22

What entertainment value is there in counting cash? Frankly, the best part of my business is separating and counting large stacks of currency every week, roughly $80,000 a year. The only down side is when the local ATM machine runs out of $20s.

23

Yes, but too many businesses will obsessively check for even a 1 cent shortage.

24

It only takes 30 seconds to count the money. That’s the easy part.

Recording the sales in QuickBooks usually takes 10 minutes but it might take an hour.

The problem comes from the fact that we have 3 systems which don’t directly talk to each other electronically, and it’s possible that none them match reality.

A is what the POS says we sold that day (theoretically talks to QB but doesn’t work for us).
B is what the cash register recorded (dumb, stand-alone).
C is what Quickbooks says we sold (important for inventory and accounting)

On a good day, all 4 answers agree with each other and it’s done in 5 minutes.

On a really bad day, the POS says 18 transactions, of which 8 are cash totaling $312 but the register says 9 cash transactions totaling $362 and there’s actually $358 in the drawer. So the manager and assistant manager spend an hour trying to figure out what to put into QuickBooks.

My points is that, if we didn’t take any cash at all, we could just take the information from the POS and put it straight into QuickBooks and boom we’re done. That would save us a couple hours each week. That’s 100 hours per year of the manager’s time and the assistant manager’s time. Therefore, time spend counting the cash and reconciling it with what goes into the computer, plus the time spent going to the bank, costs us MORE than the 3% fee we pay for Visa and MC. YMMV.

25

Large discount chain here. The majority of our transactions are in cash, as our customer base is notoriously under-served by banks.

Cash mainly slows down self-service checkout turnover (customers have to insert one bill or coin at a time); a semi-decent cashier at a normal checkout is quick at accepting cash and making change (with maybe a slight delay when cashiers need to break open stubborn coin rolls). Cash is still faster than check, and often on a par with most credit/debit users who are slow as molasses on following prompts on the terminals they use. Probably the most time-intensive thing done now is dealing with baby formula checks, WIC, and coupons, which severely slow things down.

Our cash office typically has two employees on hand for 8-12 hours a day. Figure $160 to $480 in payroll for that service per day, giving varying hourly pay rates. Some of that time is in counting cash, but they also consolidate the counting-down and refilling tasks that normally would have to be done by individual cashiers and/or management in years before (and probably recouping hourly expenses with just this, given how many cashiers would have to be doing this). They handle nearly every monetary I/O in the store, including vendor accounts, vending machines, repair contractors, utilities, etc. Did the overnight manager call in a snow-plow service? They’re dealing with that. Nearly all of the cash procedures are semi-automated, so the bulk of their payroll goes into dealing with all the other stuff, so cash doesn’t cost much on the back end.

With operating our own ATMs, check cashing at any register, and financial services center, we recycle a lot of the cash that comes into our store, turning an additional profit on it without having to send it out of store and reducing the amount of armored car service needed. Much of the cash coming into the store per day goes right back out as check cashes, wire transfers, ATM withdrawals (all of which give a few dollars in profit each) and cash-back debit transactions and government check cashing (which are free for the customer). The biggest cost of supplying money to the store is probably in rolled change; few customers pay in coins, coins go out in nearly every cash transaction, so we still have to supplement our supplies with frequent coin deliveries.

Before all the financial services went into place, the “shrink” on cash through all losses (fraud, theft, miscounts, counterfeits, etc., plus cash-handling expenses) was about 3%, about on par with credit/debit transactions, and lower than checks (~5%). Now it’s closer to 1%, lower than credit/debit. Shrink on coupons, on the other hand is closer to 10%, sometimes far higher when big forgeries spread online before they’re caught.

26

Great post, thanks. I hadn’t thought about coins. When we talk about getting rid of pennies or swapping dollar bills out for coins, we typically talk about the user experience and savings to the government. Stores could feel something too.

27

The OP’s question has no answer. The cost of counting money depends on how much money there is to be counted, and that was not specified in the question, nor could it even be estimated from the context. A retail business employs personnel to perform various tasks, and one of them includes counting and handling money, among other duties expected from the same employee during the work day or week or year… It’s like asking what it he cost of turning the lights on and off, or making name tags for the employees.

My answer was that the cost is just an incidental, among the many things that employees are hired to do, as needed, with varying circumstances from day to day. You would still need to hire the same people, to work the same hours for the same salary, regardless of the amount of cash that needs to be handled in any day.

28

Your answer is incorrect.

29

Cash is usually counted and deposited by a manager, who gets paid a salary. If you eliminate the 5 minutes counting the cash and the 15 minutes to take the deposit to the bank, the manager’s salary doesn’t change (unlike an hourly employee, who’s salary would change). Therefore the savings from eliminating cash in most cases would be limited to theft loss, which is usually fairly small in my (admittedly limited) experience.

A good example that proves the cost difference between cash and credit is gas stations giving a discount for cash. Gasoline is an extremely low margin product. Most stores make very little money on the gasoline and instead get most of their profits from the snack shop. These stores are willing to give customers a discount (usually about 3 percent or so) for cash because that’s how much the credit card costs their store. The cash cost is low enough to be negligible.

While cash purchases are portrayed in credit card commercials as causing the credit card well oiled machine to come grinding to a halt, the exact opposite is true in real life. Cash purchases are completed faster. When you use a credit card, you swipe your card, select credit or debit, often answer a few questions (often you have to enter your billing zip code, sometimes the machine will ask if you want cash back before selecting credit or debit, asking for cash will force the transaction to debit), wait for the transaction to go through, and sign. When you pay cash, you hand the clerk the cash, they punch in the number on the register, count out the change the register tells them to, and hand it back and you’re done. If you get a customer who is really slow they may fiddle for a bit getting out the cash and fishing for coins, but in most cases the cash transaction is faster.

While I’ve seen people fiddling with cash on occasion and fishing for coins, it’s pretty rare and I’ve never seen it cause enough of a delay to significantly affect the line or require more employees, except in stores that use automated checkouts. The automated lines pretty much require credit or debit cards.

30

Also, to counterbalance the individuals who are fumbling with cash you have card customers who are confused by the prompts, have trouble reading the card reader’s screen, swipe cards such that they fail to read, spend a fair amount of time digging through the 20 cards they have stuffed in their wallet (after the total is announced) to find the one they want to pay with, or attempt to pay with a card that isn’t accepted by the store. In my experience as a cashier while these don’t individually take as much time as someone hunting 19 cents in pennies out of their coin purse they are far more common.

31

Not only theft loss, but preventing theft loss, and insuring for theft loss.

Those safes for cash drops aren’t free.

Yes, but gas stations have many small purchases. This increases CC fees.

And they also refuse bills larger than $20.

Also out here the discount is nowhere near 3%, it’s about 2 or 3 cents per gallon.

That works out to be .075%

You’re also forgetting the fees banks charge for cash handling. That’s about 1%.