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Cash. It was once a requirement for shoppers but is now just one of many payment options. According to The Economist, “…cash, after millennia as one of mankind’s most versatile and enduring technologies, looks set over the next 15 years or so finally to melt away into an electronic stream of ones and zeros.” In the United States, particularly, this trend is evident. According to the Nilson Report, Americans now prefer to use non-cash payments for their purchases. Cards account for more than half of all transactions, up from 29 percent a decade ago, and the average house-hold has more than 10 credit cards. In addition, “smart cards,” automated payment systems that use wireless technology to enable consumers to make a fast payment without initiating a formal transaction, continue to emerge in a variety of marketplaces. One example of this technology is the E-ZPass, which allows drivers in the northeast United States to pay highway tolls wirelessly—without having to stop. Drivers simply drive past a scanner and are automatically billed the appropriate toll on a prepaid account. And while cashless payments aren’t necessarily increasing at the same rate worldwide, it’s safe to say that, in general, cash usage is on the decline.
It should be of particular interest to retailers that this trend applies to self checkout transactions as well. According to Selfserviceworld.com, 50 percent of retail consum-ers surveyed prefer to use credit cards for self checkout transactions, 25 percent prefer to use debit cards, 15 percent don’t care and only 10 percent prefer cash. Therefore, up to 90 percent of respondents either prefer or don’t mind using cash-less payment methods.
With this growing trend, retailers now have the option to offer cashless self checkout to satisfy their customer base and reduce cash-handling and main-tenance costs. Depending on your retail business, cashless self checkout solutions can be a very smart choice. What’s more, now when you’re ready to implement or upgrade your self checkout systems, you can choose from more self checkout options than
ever before. This paper will examine key considerations when deciding between cash-accepting and cashless self checkout solutions, along with the potential business benefits of going cashless in the right retail environment.
Retail environments vary widely—and so do the consumer transactions they process. That’s why, when considering a cashless self checkout solution, it’s important to assess the key characteristics of your specific retail environment, with particular attention given to the following issues.
First, it’s important to understand the preferences of your customer base. Look at the number of debit and credit transactions, rather than the percent-age of debit or credit sales. A retailer that generates 95 percent of its sales from debit and credit transactions still might not be a good candidate for cash-less self checkout, if that 95 percent of sales comes from only 50 percent of its customers. Also, examine how your customers’ payments break down by order size as well as by number of customers.
Next, look at the volume of cash handled by your operation on a daily basis. Specifically, examine what percentage of your debit customers get cash back on their transactions and how your customer service would be impacted if this option is not available in every lane. Also, look at your cash handling costs and figure out how you could implement the right mix of cash-accepting and cashless self checkout models to reduce these costs while still offering your customers the choices they want.
Lastly, carefully evaluate your store and checkout lane layouts. Retailers whose stores have large front ends and lots of lanes are excellent candidates for cashless self checkout solutions. Such checkout lane configurations can offer you the flexibility to utilize both cash-accepting and cashless lanes and help increase your customers’ choices. The exact mix of cash and cashless depends on your customer base and customer preferences.
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