3 Ways to Mitigate Shrink in Cash Management

A hands-off cash approach can help reduce loss.

March 27, 2025

Cash Depot LogoThis article is brought to you by Cash Depot.

Across the retail industry, U.S. retailers lose over $60 billion in profits per year due to cash shrinkage and mishandling, according to a report from Retail Knowledge.

Similarly, research from the National Retail Federation survey shows that 16% of retail cash loss is due to human and accounting errors, while 28.5% of retail shrink is due to internal theft. When it comes to cash alone, the average loss from internal theft is $2,180 per investigated incident.

“The solution is to have a hands-off approach—meaning it is much safer to limit the time and number of hands on in-store cash. In fact, it makes sense to come as close to eliminating manual cash management processes as possible to aid in reducing loss,” said Sean Burke, CEO of Cash Depot.

Burke suggests three ways operators can reduce loss by improving the cash management process:

  1. Limiting hands on cash with the right equipment: Cash recyclers and smart safes reduce the amount of time employees spend handling cash. But not all hardware is created equal.

Many of them have single-note acceptors and, considering employees have to add the bills one at a time, this can be “clunky, time-consuming and often leads to store management simply hand-counting the cash and waiting until later to perform the deposit, leaving the door open for continued errors and temptation for internal theft,” said Burke. “Multi-note acceptors, however, address this problem—Cash Depot’s BANK IN A BOX counts, verifies, and records up to 300 bills in 60 seconds or less.”

  1. Make cash management more visible: Retailers might assume that keeping cash management hidden in the back office will reduce theft, but it actually has the opposite effect, said Burke.

“Keeping it hidden provides too many opportunities for shrink. However, having cameras on cash management activities and equipment has been shown to increase accountability and improve behavior by 50%, while having real eyes on cash management improves behavior by an additional 20%. Why? Because knowing you could be observed and even judged by real people reinforces the need to do the right thing.”

  1. Increase backend software security: A lack of employee accountability leaves the opportunity for theft and error open for manual cash counting and even some smart safes.

“BANK IN A BOX offers robust employee accountability by assigning each staff member a designated login code and PIN, controlling which locations and machines employees have access to, providing cash permissions down to the type of bill and dollar amount, and adding and removing employees at the push of a button,” said Burke. “Retailers can also see all of their employees’ cash management activity in real-time with a web-based portal, giving them a full picture of their store’s cash management.”

This is the second in a two-part series from Cash Depot. Read part one about labor and cash management.