Cash still king in the retail industry
Merchants have long relied on cash as one of the most important forms of payment. Retailers are investing in cash counting machines that will speed along money management processes and encouraging shoppers to use currency rather than credit cards. There are several reasons why cash still reigns supreme for retailers across the country and why it has a range of advantages for small-business owners and patrons:
• No surcharges. In recent months there has been plenty of news surrounding the "swipe fees" retailers must pay when a shopper pays with a credit card. These expenses can add up, particularly if the majority of a retailer's transactions are completed in this manner. With cash, however, merchants don't owe any processing charges and get to keep all the profit associated with a transaction, rather than pay a percentage to a credit card company.
• Lower risk of fraud. Credit card fraud is becoming more prevalent and businesses are experiencing significant repercussions when they inadvertently accept stolen cards for payment. Merchants may never receive the payment they anticipate if the card's owner reports it missing, which can lead them to lose profits. Cash, on the other hand, is not used fraudulently as frequently as cards and allows business owners to rest assured payments they received with paper currency won't be damaging in the long term.
• Simplicity. Some consumers may not remember to pay off a credit card bill each month or fear accumulating interest. Relying on cash means shoppers don't need to search for a monthly statement or risk not being able to afford the minimum payment on a card,
• More accessible for consumers. After the long recession and tumultuous recovery, many customers lack the credit history necessary to apply for credit cards. Bankruptcies, mortgage defaults and other unavoidable circumstances could have damaged shoppers' credit histories, especially if they were out of work or took pay cuts that made it difficult for them to pay their bills. Because credit histories don't have an impact on the amount of cash consumers can use, individuals with low credit scores may rely on cash, especially as they work to rebuild their histories.
Whether consumers choose to rely on cash out of necessity or personal preference, retailers that only accept cash or prefer paper currency payments need to optimize processes to ensure all procedures run smoothly. By relying on the most up-to-date cash counter machine, a merchant can find it easier to process these transactions and improve internal procedures.
July 29, 2013