You might think that working with credit cards involves paying a plethora of processing fees and small expenses that could ruin the profit of your business. In reality, the hidden costs of accepting cash payments are much higher than accepting credit or debit card payments. Whether you run a gift shop, a small boutique, or a similar business, you need to be aware of these costs as soon as possible.
That's because these small costs can pile up at the end of the month and you'll be wondering how you lose money. Keep reading to learn the hidden costs of accepting cash payments and how you can solve this problem.
Cost of Stolen Cash
Although it rarely happens, this possibility is still there. Some employees might not have the best intentions in the world and they would decide to treat themselves with the "five-finger discount". On top of that, counting cash can also leave an opening to human mistakes when giving back the change and so on. If just a few of these unfortunate incidents happen every month, you could lose hundreds of dollars or more.
Cost of Counting Money
This type of cost is not always visible, but it is there and it can add up at the end of the month. If you work only with cash, the amount of money received always needs to be counted by your employees. Counting money happens immediately after a transaction but also at the end of the day. This also means that your workers waste more time when they could get busy promoting products or interacting with clients.
Accounting operations are more costly for cash payments in comparison with credit card payments. Remember that it all boils down to manual work. Accountants who can quickly see a spreadsheet of credit card transactions that contain the name and other customer details have less work to do. On the other hand, working with cash payments and having to manually take each transaction by hand and verify its details takes longer. As a result, you'll pay more for your accounting needs too.
Cost of Losing Customers
On top of all other costs associated with accepting cash payments only, there is also the added cost of losing customers who are already in your store. This happens because of cart abandonment. Simply put, clients get tired of waiting in line and they simply leave without buying anything. At the same time, it has been discovered that customers who know that they will have to queue for a long time in a certain shop will simply avoid it altogether. You will not run into this type of problem if you decide to accept credit card payments.
As you can see, it can cost more to run your business by accepting cash payments only. At some point in the future, you should consider adding credit card payments, especially if your business develops. Contact Millenium Payments today to learn more about how to safely implement card payments within your business and eliminate costs associated with cash payments.