The times necessitate that store systems do more–and few store systems are more crucial to a retailer’s success than cash handling and security.
While retail technology has focused on point-of-sale (POS) systems that integrate everything from transaction accounting to inventory management, one of the most recent areas of opportunity involves the integration of cash handling with the POS system.
Some ahead-of-the-curve c-store operators have already replaced traditional drop safes with cash management systems that incorporate all of the benefits of a safe and bill and coin handling technology and its own operating system.
The newest cash management systems connect to corporate networks to facilitate data exchange and remote management of the system. Among the benefits: internal theft is decreased, detection/rejection of counterfeit currency is improved and armored car requirements are reduced.
Additional cash savings are coming through ‘provisional credit’ for funds in the cash management system, but not yet deposited in the bank. Non-cash savings include a reduction of management time previously required to reconcile the transaction log with cash and preparation of bank deposits, plus instant accounting and deposit preparation.
Today’s cutting-edge cash management systems offer such features as bill validation, loss-prevention software, remote monitoring/access, POS and back-office interface and video event monitoring. One innovative system on the market adds a number of powerful communication capabilities, including the ability for the safe to host a Web site of its contents, email reports to authorized parties or send FTP packets to a corporate back-office system. It can also allow c-stores with multiple distant points of sale to capture the deposits at each POS and track all of the activity on one set of reports.
Structural features include a quarter-inch steel plate body and self-locking vault door; three 1-inch chrome-plated locking bolts protected by a drill-resistant hard plate and a spring-loaded relocker; an interlocking back flange to prevent hinge attack and more.
Something too often overlooked is the fact that implementing a cash management solution invariably impacts an entire organization from finance (for example, eliminating cash shrinkage by linking the safe and POS) and operations (providing instant access to all information pertaining to cash in the safe) to IT (must interface with POS at transaction level to stay in balance), security (must interface to store alarm systems and store camera systems) and loss prevention (balance every transaction with POS, so no chance of cash shrinkage). Each department’s needs must be considered early in the process.
Monitoring the Store
For the past three years, Flash Foods in Waycross, Ga. has been using its cash control system to, among other things, help identify shrink. “We look at the events that happen on our point-of-sale system, which are fed into a business-intelligence tool. It helps us evaluate whether or not we have theft going on in our locations,” said Jenny Bullard, the chain’s chief information officer.
Among the warning signs: too many voids from a particular cashier, or a number of merchandise returns that seems out of the normal limit. “We look at anything that gets red flagged,” Bullard said.
Beyond that, Flash Foods’ POS system captures events at the pumps, such as running out of paper, as well as safe drops where employees take the cash out of the drawer and put it in the safe. “That data is then pushed up into our corporate business-intelligence warehouse database every five minutes, so it’s real time for us,” Bullard said.
This was a marked improvement for the 174-store chain (all in Georgia except for 16 in northern Florida), whose previous system was limited to store-level tools designed to generate printed reports for managers. What was missing, Bullard said, was a “way to drill down into that data, and it was just there at store level.”
Now that information is electronically forwarded to the operations people at headquarters and a theft and cash control department that uses the gathered information to keep employees honest. “They actually work with this business-intelligence tool to drill down into the data and find out whether we have an internal cash or theft problem going on,” Bullard said, adding the actual savings are hard to estimate, “but it not only helps us control cash, but on inventory problems. We have been able to reduce a percentage on our inventory shrink.”
Bullard, who spoke at the NACSTech show on POS integration, said she and her colleagues have been pleased with the system’s ROI. “We got our ROI within the first year. Not only does it give us a better handle on controlling cash and theft, but also we can use it in our marketing department with market-basket analysis, reporting what we sell, and which products sell with others. It also ties into the items that sell as part of a loyalty promotion.” The system includes a reporting tool that can create so-called dashboards for quick viewing.
“We’ve been tossing around, at our operations level, the idea of interfacing our safes,” Bullard said. “Today our safes are the old manual models, where you take the money out of the register, put it in the envelope and drop it in the safe, then record on your point of sale how much you dropped. But you could drop $20 and report you dropped a hundred, so you can still have theft there because it’s not integrated.”
Mark Conan, chief financial officer of 99-store Plaid Pantries Inc. in Beaverton, Ore., installed a Brink’s CompuSafe cash handling system a year ago so that, among other things, store managers don’t have to carry a bag of cash to the bank anymore.
“Obviously, there is a safety benefit there, but there is also the time that they don’t have to spend counting money, since there is an automatic counter,” Conan said. “It also gives us more control.”
The system, which Plaid Pantry pilot tested in a pair of stores for two months before authorizing the rollout, includes a Web-based reporting tool that allows executives to download information and run their own reconciliation reports.
Tesoro Refining and Marketing Co. in San Antonio opened discussions with representatives of manufacturer Tidel in late 2006. “We were looking to find equipment and technology that might help us be a little bit more efficient in the management of our cash,” said Michael Miller, general manager for its 2Go and Mirastar c-store brands. The company operates just over 200 stores, with another 130 under the Shell brand in southern California and 25 in Salt Lake City under the Tesoro 2Go label.
While he viewed his company’s cash control systems as “very good,” Miller conceded that Tesoro was using a “very old-school technology, kind of first-generation safes where you have tubes that you fill to dispense,” he said. “We had very good controls around that process, and that equipment and technology was designed primarily to deter robberies, but it’s very inefficient. It takes an awful lot of manpower to operate that system, so you end up spending an awful lot of labor on it.”
What management wanted was a new technology that would give the company the same level of safety and security, but would also help reduce operating costs on labor, such as getting store managers out of the back room counting cash and on the sales floor to interact with customers and supervising employees.
Tesoro began a two-store pilot in May, with one unit in southern California and the other in Anchorage, Alaska. “While getting to that stage took a little bit longer than anyone had anticipated, it is proceeding well,” Miller reported. “The unit’s validator system has proven accurate.”
Yet to be tested is the systems safe-POS integration. “We’re hoping if it works as advertised it will help reduce the time associated with back-office accounting,” Miller said. “Typically, with safes you have to sort envelopes and count cash, and so with all your other reconciliation processes it probably takes on average of two or three hours a day of a manager’s time. We’ve been able reduce that by at least an hour just from not having to sort cash. That has been a huge savings for us.”
Tesoro is hoping it can get the time store managers spend doing accounting work in the back office down to under an hour by having that interface in place.
“Truly, the safe is the cash management system,” Miller said. “The way the system works, it not only receives cash but accounts for all the cash every employee handles with the safe. Every time you do something with the safe you have to put in a unique PIN code that identifies you. Then the safe keeps track of all the money you put into it and take out of it, so it really is your cash control system.”
The interface is where retailers can reduce management time. “The interface provides communication between your POS device, your register and the safe itself, so there is no opportunity for cashiers to manipulate data,” Miller said.
The system also can send information to a home office via the Internet.
Systems that do more, thus freeing up labor, are clearly the way to go forward, something more operators are coming to realize all the time. CSD