Wednesday, May 27, 2009

Fight Back When Cash Flows The Wrong Way

The economy’s downturn brought with it a double whammy for retailers: a drop in sales and a rise in theft. Who knows when the former will correct itself, but retailers have already begun efforts to combat the latter.

Cash shrinkage has been particularly troublesome for retailers during the recession, largely because shoppers are turning to cash for their retail purchases. There are several reasons behind this trend: consumers are tightening their budgets, using cash to limit their spending and their credit card debt; North America has experienced a population increase among cash-centric cultures, such as those from Latin America; and there has been a rise in "unbanked" consumers — those who spend cash because they don't have a bank account — particularly at convenience stores.

"We're seeing an increase in cash transactions at all types of retailers in all of the major retail economies of the world," NCR industry marketing director John Saccomanno told me.

With that as a backdrop, I recently spoke to several top loss prevention experts about the rise of cash shrinkage and how technology can help combat it. They included Saccomanno, Tellermate president Rick Bellerjeau, Epicor Software executives Diane Neaven (director of product management) and Darlene Bogusz (product analyst – audit and operations management), and Loomis VP of business and product development John Rhoads. The story will run tomorrow on our website; feel free to comment here or to e-mail me as well.

4 comments:

  1. the Wall St. Journal had a piece a few weeks back about the decline of credit card usage in retail, the writer was Robin Sidel, not sure the headline but it was a good article

    ReplyDelete
  2. Great article - Many retailers just look at cash, and its verification as a necessary evil. One manager told me, "It's like cleaning the store. Just something we have to do. Counting cash doesn't add value." Too bad he didn't look at cash losses as bottom-line dollars. As stores automate cash counting, there are so many interested constituents (treasury, marketing, loss prevention operations) that the best solution might be overlooked due to a decision made in a silo.

    ReplyDelete
  3. Hi,

    If you’re facing a cash flow dilemma, you can use your accounts or good receivable to get over the problem. Did you know that you can actually sell receivables? In a way, you’re not going to incur debts because you’re simply converting the invoices (assets) into instant cash. With immediate cash on your hands, you can expand or continue your production without waiting for the sales or earlier invoices to be fully paid.

    ReplyDelete