The South African Reserve Bank tells us that cash in circulation passed the R119 billion mark in December 2013 and reports from across the world reinforce the reality that the use of cash continues to outgrow all other forms of payment. 84% of global transactions are still made with cash.
The reasons for the popularity of cash are the ease with which it can be used, its anonymity and its integrity. These attributes appeal to the consumer who remains increasingly concerned about card and Internet crime.
But for the same reasons cash will remain the primary target of theft and robbery for a long time to come and given that criminals seek to find the line of least resistance, it follows that they will seek out where the highest amount of cash is easiest to steal.
Through the ’90s and into the first 10 years of this century armed robbery was rife within the banking and cash in transit industries with reported incidents climbing to over 600 a year at one stage. Their response to this gave rise to improved technology and greatly improved processes that reduced the size of the target and a hardening of its defences. The effect of these strategies was significant with the 2012/13 year recording the lowest number attacks in 11 years; seven attacks on banks and 145 against the CIT industry.
But this performance simply redirected the criminals to softer, easier targets within the business community. Over the same 11 year period, armed robbery (distinct from burglary) grew from 10 incidents a day to over 45 attacks a day. Last year we recorded an unbelievable 16 377 armed robberies against business in South Africa.
The incidents are violent. The robbers organise themselves in groups averaging 15 in number. They use R5 and AK47 rifles, and 9 mm pistols with confidence and ease. On almost every occasion they seek the cash and they seldom ever execute a robbery without careful planning and accurate intelligence. In most cases they obtain information from participating or unwitting insiders relating to how much cash is available, when and where it is accumulated and what processes the store follows to manage its cash between the point of sale and the bank.
The attack is fast and efficient. The objective is to hit and run within 3 minutes creating confusion and fear so as to maximise the opportunity to disappear without trace. Any kind of resistance during the attack itself is met with immediate and ruthless assault that often leads to death.
The modus operandi in burglaries is very similar. The constituents of an ideal target are the accumulation of cash stored overnight in a soft safe and an ineffective or inoperable intruder detection system. The latter, more often than not, is easily disconnected by someone on the inside or a visiting technician that nobody bothered to authenticate. It is an interesting and concerning fact that over the past five years we have not heard of one break-in related attack on our cash vaults that was stopped by an armed response to an alarm.
The cost of managing cash includes the costs associated with armed robbery and burglary and it’s a fallacy to believe that insurance in isolation is a solution. It is equally a misconception that automated cash management services that are designed to provide an effective solution, will add cost to the business.
The cost of managing cash is made up of the following elements:
* Cost to count and manage cash.
* Cost of cash shrinkage.
* Cost to insure cash.
* Cost to transport cash.
* Cost of receiving value at the bank.
* Cost to trading.
* Cost to life and limb.
On the basis of industry averages, the sum of the first five cost components on a typical R4 million a month cash turnover business is R33 000. The cost of an equivalent automated retail cash solution will be in the region of R23 000 per month – a saving of over 30% and the delivery of a string of superior benefits.
Invest in a stable psychological bank account
When all of the elements of a robust automated retail cash management solution are in place, a positive psychological bank account is achieved. This is a trading condition where cash is no longer accessible and the threat of armed robbery is virtually eliminated. The staff are no longer intimidated, consciously or subconsciously, by the fear of becoming a victim of a robbery and they become much more disposed to practicing techniques designed toward service excellence and the promotion of sales. Such an environment encourages a positive and pleasant atmosphere that stimulates customer attendance and spend.
The following principles remain fundamental to delivering a dependable psychological bank account:
1. A minimum category 4 cash vault capable of resisting any attempt to cut it open or removing it entirely from its mountings in less than a couple of minutes. Anything less hasn’t got the necessary level of robustness to withstand a determined and moderately equipped attack.
2. Real time GPRS communication required to transmit all of the financial and technical activities at the cash vault to the central server.
3. Same day settlement.
4. An unequivocal contractual commitment by the supplier that the risk of the cash is transferred immediately upon it being deposited into the cash vault.
5. The regular skimming of the points of sale of value over float and the depositing thereof into the cash vault.
6. The elimination of any form of third-party intervention such as a back office supervisor.
7. The use of a professional cash in transit company to collect the deposits from the business daily and transport them to the bank.
The benefits of a professionally constituted service to the retailer are significant:
* Removal of cash risk and the creation of a powerful deterrent to attack.
* Protection against armed robbery and burglary.
* Stable trading environment for staff and customer.
* Cashier accountability – no third party required.
* Major reduction in cash shrinkage.
* Control of fraudulent banknotes.
* Improved cash flow.
* Detailed cloud based, management information.
* Tangible cost savings.
The adoption of automated retail cash management technology and services by the market is growing rapidly and as the individual stores embrace the solution we can expect that the criminals will continue to be deflected from the hardened targets to the more vulnerable and exposed. This is not a time to choose to be a victim either by virtue of doing nothing or by buying into cheap solutions that don’t have the capacity to deter, deflect and defend.
© Technews Publishing (Pty) Ltd. | All Rights Reserved.
printer friendly version