5 Hidden Costs of Accepting Cash and Cheques at Your Business
Cash and cheques may seem great. Customers come, pay, and it’s done. No fees for you or customers, no chargebacks, no contracts, no disputes with payment processors. But you may have overlooked the major hidden costs of accepting cash or cheques at your business. In fact, extra accounting time and trips to the bank may be costing you more than $4,000 per year!*
So you see, accepting cash and cheques is not as efficient as it seems.
Is cash still king?
Not really. In fact, that mentality can cost you, big time.
Cost of Losing Card-First and Cashless Customers
According to a national study we conducted this year, the way Canadians prefer to pay affects where they choose to buy, with over two-thirds of Canadians (69%) saying they would be more likely to buy from a local business if they can pay by card.
79% of Canadians report that they try to pay with a debit or credit card first when making purchases, and two in five Canadians (41%) describe themselves as ‘card-only’ buyers who never use cash to pay for their purchases. In fact, 75% of Canadians are carrying less cash than in the past and admit they haven’t visited a bank or ATM to withdraw cash in more than two weeks.
In 2017, over two-thirds of small and medium-size businesses reported accepting card payments. Customers invariably desire speed and convenience. With more and more Canadians abandoning cash in favor of mobile and card payments and more businesses willing to accept cards, your business stands the very real chance of losing out on cashless customers. Adopting a digital payment processing method like Square means everyone who wants to pay can do so, and you will never miss a sale.
Cost of Slower Checkout Lines
Cashless customers aside, cash slows down your business considerably. Long checkout lines put you at risk of losing customers who run out of time or patience. Plus, time counting cash and providing change at the register take away from the number of transactions you can process. Square makes it easy to speed up your checkout by not only allowing you to accept cards, but also by making it easy to accept contactless cards and mobile payments like Apple Pay and Google Pay. According to Payments Canada’s 2017 Payment Methods and Trends Report, the number of contactless transactions increased 81% in 2016, illustrating the heavy demand to pay with faster contactless payments.
Cost of Inefficient Accounting and Poor Data
More time spent in the back office means less time for you to serve your customers. Accounting for cash and cheques is difficult. Your business needs to train employees in proper cash handling techniques and to balance the cash register daily. You also need secure cash drawers, which can add a significant up-front cost to your business. Counting up cash everyday, keeping a record of each transaction, and combining it with your other payments and reports can take a ton of time, which is one of your most valuable resources and costly when paying hourly accountants or employees.
By accepting cards with Square, this is one headache you don’t need to worry about. Square tracks your payments for you and presents all your reports in one easy Dashboard. This means no additional training or time required to balance your sales each day. Even more, Square can manage your inventory to keep your listings up-to-date, calculate sales trends using your POS data, and provide you with customer insights in real-time. Our Chief Financial Officer explains that cash, in comparison, is anonymous meaning it doesn’t capture any data, and “data is the new oil”. With the sales and customer data provided in your Square Dashboard, you can better understand your business and make valuable decisions that will help you grow.
Cost of Cash and Cheque Deposits at your Bank
On top of the extra time spent doing your reporting and accounting, consider the cost of making regular cash and cheque deposits at a financial institution. Going to the bank requires time and money (gas, parking, etc.). Taking these costs into account, each trip to the bank may be costing you $25 or more!* Sometimes banks charge fees for these deposits or it takes several days for your money to be available in your account.
By accepting card payments with Square, your money is automatically deposited into your bank account as soon as the next business day. No more trips to the bank, especially in the cold of winter.
Cost of Theft and Fraud
Theft should be a major concern for a cash businesses. Unlike credit card payments, cash can be physically stolen by employees or criminals who enter your business or home. With cheques, it’s impossible to know if they are going to bounce until your customer is long gone. The most common risk of theft is caused by unscrupulous employees, especially because they can keep your customer’s cash without ever recording the transaction in your point-of-sale. It’s very hard to track and pinpoint this type of fraud. When your cash is gone, it’s gone.
No need to worry about security with Square. Accepting credit cards with Square guarantees you a paper trail. Square’s systems constantly monitor for suspicious activity. We have advanced data models and a team on the ground dedicated to monitoring fraudulent behavior to help you avoid lost goods or sales. We worry about security so you don’t have to!
Stick With Square!
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Square takes the five hidden costs of accepting cash or cheques and makes them a thing of the past. Grow your business by accessing more customers and allowing them to pay the way they prefer. Speed up your checkout lines with tap and mobile payments. Save time and money going to the bank and receive your funds in your bank account as soon as the next business day.
Where cash and cheques make accounting and reporting a headache, Square’s integrated software and hardware make it easy to get paid fast. All the accounting and financial data you need is accessible in real time—no more waiting until day’s end to access your sales data.
Digital payments protect you from theft. No cash to take makes everyone safer and reduces opportunity for human error. Square’s fraud protection and dispute management use a mixture of machine learning and human expertise in the fight against fraud and keep a constant eye out for unusual activity.
Most importantly, we retain the human element where it matters most—customer service. Our dedicated teams of fraud and dispute management agents are actively working to keep you and your income safe.
Stick with Square and watch your business grow!
Calculation based on $1.12/liter for gas, 17km avg. distance to nearest bank branch, $2 parking fee per trip, 1 bank trip per week at $20/hour, 2 incremental hours per week in bookkeeping/accounting at $30/hour
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