This article is brought to you by Cash Depot.

“There’s a false sense of comfort around ‘safe’ cash,” said Doug Marquis, chief revenue officer for Cash Depot. “Secured doesn’t mean optimized, and idle cash could in fact be costing you money. Retailers should focus less on cash volume as their goal and more on cash velocity.”

According to Marquis, there are three hidden costs of idle cash that are eating into retailers’ margins:

Opportunity cost. Cash that sits in a safe doesn’t generate returns, said Marquis. Instead, provisional credit fees (loans on money that’s been “deposited” but not yet cleared) mean retailers pay interest on their own money. Smart safe deposits can take up to nine days to fully settle, which can cost $250-$300 per site, per month for the average retailer depending on its weekly deposits, according to data collected from Cash Depot partners.

Operators can generate additional fees if there is more or less money in the final settlement than originally reported. “You’re paying for money you already own,” said Marquis, “simply because it isn’t moving. These costs can add up quickly.”

Security risk escalation. Cash sitting in your store, even if it’s stored in a smart safe, can make your business prone to both internal and external theft and make your store more of a target. “When cash keeps moving, it stops being a liability and starts becoming an asset,” said Marquis. Recycling cash through ATM withdrawals, for example, means cash leaves the store with customers instead of sitting idle—and vulnerable.

Operational inefficiency. A poor cash management strategy impacts retailers’ largest expense—labor. Cash Depot research shows that manual cash management for a c-store can require about 20 hours of labor each week at the store level. Managers need to prep registers at the start of shifts, coordinate couriers and armored carrier pick-ups, as well as reconcile multiple bank accounts at locations that offer services such as lottery or money orders.

Cash Depot’s BANK IN A BOX not only reduces costs and eliminates common fees that erode operator profitability, said Marquis, but it also generates revenue for retailers.

Folk Oil Company, a Midwestern convenience retailer, implemented BANK IN A BOX to reduce its idle cash and simplify operations. “It’s done exactly what we need it to do and more,” said Megan Ashby of Folk Oil, adding that managers are able to stay in the store and the company cut unnecessary banking complexity.

It uses next-day ACH deposits to eliminate provisional credit fees, reduces cash accumulation through in-store cash recycling and generates additional revenue through consumer financial services, such as ATM and bill pay services, bitcoin purchases and banking and deposits for local businesses.

“The most effective cash strategies don’t just protect money, they put it to work. Retailers who recognize that shift are finding new ways to reduce risk and reclaim and improve profitability,” said Marquis.

This is second in a two-part series from Cash Depot. Read about how your cash management system could be interrupting your business in part one.

Read the full case study to learn more about how BANK IN A BOX helped Folk Oil Company manage its store cash.