Why Paying for Banking … Can Break the Bank

The cost of cash management can be substantial.

May 23, 2024

This article is brought to you by Cash Depot.CashDepot-logo-for-in-text-(1).png

Money makes the world go ’round. For c-store operators, money often means cash.

Nationally across all businesses, about one in five transactions occurs via cash, while about one in five consumers prefer to pay in cash. From the standpoint of retailers, paper money has the added benefit of no swipe fees eating into margins that are already, in many cases, thin.

But money isn’t free and cash comes with costs. Two of those costs are bank fees and armored carrier fees. “What we see is that these have become accepted parts of the smart safe landscape,” said Sean Burke, CEO of Cash Depot. “The more frequently that money is picked up, the larger the armored carrier fee is.”

Bank fees are also a reality for retailers when it comes to cash handling—whether it’s manually dropped at the bank or picked up from the smart safe. The average retailer is spending around $37 in bank fees for deposits over $5,000.

And then there are the nickel and dime fees that retailers, even very large ones, are familiar with. After all, banks need to make money, too, and face some of the same challenges on the expenses side as other retailers.

Trying to limit your costs can mean you end up limiting your options. “Retailers should see if they can negotiate a better rate, or even look for a different bank to see if they can limit their fees,” said Burke. Another option is to eliminate some of the services that are causing those fees, like smart safes. “The problem there is that smart safes also solve a lot of cash management problems. Retailers may decide that the benefits are worth the costs.”

Retailers should also evaluate their cash management system, said Burke. “Even if they don’t end up using a service like Cash Depot’s BANK IN A BOX, they should be aware of the pros and cons of whatever system they have in place.”

Burke said that BANK IN A BOX can help c-stores eliminate the majority of bank fees by recycling cash for use through its ATM and financial kiosk functionality. Rather than sending cash to a bank’s vault and incurring fees, the retailer’s money is digitally deposited the next day via ACH. As for CIT costs, the BANK IN A BOX’s multi-functionality rolls cash pick-up and drop-off into a single, all-inclusive service. “But there is far less cash to get picked up,” said Burke, “when the physical money is walking out the door with kiosk and ATM users.”

“It’s not likely that banking or CIT will become less expensive,” said Burke. “BANK IN A BOX lets retailers get ahead of armored carrier and bank fees by becoming more self-sufficient with their cash management process.”

Dive into more content about cash management sponsored by Cash Depot. Read about cash management and recycling, the hidden costs of cash management, and how to save on cash management and provisional credit.