Holy Franklins! Businesses Lose How Much in Paper Cash Each Year?
It's an age-old problem that technology may be able to help solve.
Small and medium businesses lose a whopping $80.6 billion each year as a result of human error or theft, according to accounting, payroll and payments software company Sage.
Sage today released its sixth annual Payments Landscape report. It includes the results of a poll of more than 2,000 U.S. consumers and businesses regarding their experiences with lost cash.
Thirty-seven percent of respondents admit they have lost cash as a result of human error, while 29 percent of organizations say that they have been the target of cash theft by a staff member, Sage found.
Cash isn’t just risky to manage -- it’s also inconvenient. Nearly two thirds of small- and medium-business leaders say they spend an hour or more each week counting cash and transporting it to the bank, according to a survey by research agency Viga cited in the Sage report.
Of the consumers whom Sage surveyed, 90 percent say it is important for businesses to offer a range of payment methods. In fact, 58 percent of them claim they would be more apt to shop at a store with multiple options. The question is, for how much longer will one of those options be cash?
Given the risk involved, 36 percent of respondents believe that cash will become extinct within the next 20 years, and that contactless payment -- credit and debit cards, smartphones, and RFID and NFC technologies -- will be the most popular method as soon as 2020.
Those shifts have already begun, and alternatives to cash keep cropping up. In September, Entrepreneur interviewed Gadi Amit, president and principal of NewDealDesign and designer of the original Fitbit. NewDealDesign recently created a copper-colored concept gadget called Scrip. A functional version would hypothetically store funds, exchange them via NFC and ultimately replace cash. Meanwhile, the handheld device would preserve the tactile feel of money.
Amit explains that the reason cash persists this far into the 21st century is because it is anonymous, untraceable and universal. Cash transactions also make people more mindful of their spending, whereas research shows that virtual transactions don’t seem as consequential and aren’t as emotionally affecting.
If you’re a business owner who’s misplaced a stack of cold, hard cash, chances are you can attest that the loss felt very real.