Accepting cash as a form of payment was unquestionable a decade ago. However, several Canadian companies like Air Canada have had a cashless policy for years, and more Canadian companies are going cashless every day. The main reason behind the major switch from cash to credit or debit card payments only by several companies is clear, accepting cash costs too much money.
According to a report by IHL accepting cash payments can require hundreds of hours of labor because handling cash is such an inefficient process. In addition, often the most valuable employees at a retail store such as the store managers must focus on handling the cash instead of on other important tasks. In fact by some estimates using cash can cost up to 15% of the cash that is being handled. According to the report at the very least handling cash cost 4.7% of the cash being handled. The IHL report indicates that optimizing the payment processing through automation can save hundreds of hours of labor per month that can be used to improve the customer’s overall experience and the buinsesses’ profit.
As a store owner you may be able to calculate the cost of managing cash by tracking hours spent by you and your employees counting money, making deposits at the bank, manually entering revenue into your accounting system and any other activity that is related to processing cash payments including giving change to customers. Based on the retail segment your in, you may find accepting cash as a payment is just not worth it.
The IHL report might be a further catalyst for retail stores to further move towards a cashless model in order to reduce inefficiencies and increase productivity. It is possible to imagine a Canada where credit card processing becomes the only form of payment as cash becomes to costly to use.
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