By: Michael Hanson, Star Micronics
Although digital and alternative payments continue to grow in popularity, a 2024 study by Empower found that 52% of Americans still believe “cash is king.” This research also reveals that 27% of U.S. consumers carry cash every day, and 42% point to economic uncertainty as the reason they hold and use cash.
Cash transactions have advantages for retailers and other merchants. The most obvious is that funds are transferred immediately. There’s no waiting for banks to transfer funds for payment card transactions or for checks to clear. Also, the risk of fraud decreases. Although counterfeiters are growing more sophisticated, the prevalence of payment with counterfeit bills is far less common than digital payment fraud or unsubstantiated chargebacks from credit card transactions.
Another major benefit of accepting cash is that it doesn’t cost merchants anything to do it. It eliminates payment processing fees that usually range from 1.5% to 3.5% per transaction. In fact, the cost savings associated with cash transactions are driving more merchants to offer cash discounts in dual pricing schemes to lower their operating expenses.
Moreover, many consumers rely on cash for reasons beyond preference. Some don’t own a smartphone or a credit card, making digital payments inaccessible. Others are unbanked or underbanked, meaning they don’t have reliable access to traditional banking services. Additionally, many immigrants and international visitors use cash due to differences in banking regulations, foreign transaction fees, or personal financial preferences.
For some businesses, operating on a cash basis is a necessity. Industries such as food trucks, flea markets, and small local vendors may find it more practical to accept only cash due to high transaction costs, unreliable internet access, or a lack of feasible payment infrastructure. Tipping-heavy industries, such as barbershops and salons, also tend to rely on cash to simplify payouts for employees.
So, overall, many businesses continue to have physical currency come in, some in high volumes, which begs the question: How do you manage, accurately account for, and securely store all that cash?
Keys to Effective Cash Management
The answer is a cash management system tailored to the unique operation. The best systems are a part of the business’s overall point of sale (POS) or retail management system that tracks and records cash sales for efficient drawer balancing and end-of-day reporting. However, cash management requires specific POS hardware, namely a robust cash drawer, to physically organize and secure cash payments.
Using a cash drawer that doesn’t match cashier or sales associates’ workflows or streamline transactions can lead to inefficiency and even financial losses, making the choice of cash drawer consequential. Cash drawer features to consider include:
- Keep it Simple
Effective cash management often means keeping it simple, as the goal is to ensure quick, accurate, and secure transactions. Technologies that weigh bills and coins or require self-service for cash transactions often fail to function efficiently.
- Size Matters
Historically, the 16-inch-wide cash drawer has been the most popular, but today, cash drawers come in a variety of sizes, allowing businesses to choose the best fit for their needs. Businesses with higher cash volumes may benefit from larger cash drawers, while those that primarily accept digital payments can opt for a smaller model. The ideal cash drawer size also depends on the available counter space, POS system design, and brand image. In some cases, mounting the cash drawer under the counter can be an excellent space-saving solution.
- Till Configuration
When selecting the right cash drawer for your business, it’s important to consider that bill sizes and available coins vary by country. The number of compartments for bills and coins should be adequate to simplify counting change and balancing drawers. If bills or coins have to “share” a compartment, accuracy may suffer. A cash drawer that allows bills to lay flat and properly organized improves accuracy and ensures quick, seamless transactions.
- Compatibility & Security
A cash drawer should be fully compatible with your POS system and printer to support smooth operations. This setup ensures the drawer opens automatically when needed and confirms it is securely closed after each transaction. One of the biggest security risks occurs when a cash drawer is left open, creating opportunities for employee theft or fraud. At the end of the business day, cash should be removed, and the drawer should be left visibly open to deter break-ins.
- Durable Design
Merchants also need to evaluate cash drawer construction and reliability. Businesses with a high volume of cash transactions require cash drawers made of all-steel construction with ball-bearing rollers for smooth operation. Cash drawer reliability is measured in cycle counts, which represent the lifespan of the drawer based on the number of times it opens and closes. Durable, purpose-built cash drawers play a crucial role in keeping cash secure and minimizing losses.
- Accessories Matter
When considering the right cash drawer, make sure you also select the proper accessories. Under-counter mounts provide flexible installation options, locking till covers ensure secure cash handling during shift changes, and spare tills allow for quick and efficient drawer swaps between shifts.
- Training is Important
One of the most overlooked aspects of cash management is staff training. Sales associates may not be familiar with handling cash, so cash-friendly businesses must train employees on how to properly accept and announce the cash they
receive from customers. They should also be taught to use the Count Up or Reverse Count method to courteously and accurately return change.
The Right Tools for the Job
Savvy business operators understand that the right tools, when properly implemented, lead to greater efficiency and a healthier bottom line. Cash management is no exception. With time and security at stake, choosing the right hardware for cash management to complete a point of sale or retail management solution is key. As long as cash reigns as king, deploying a cash drawer tailored to the operation will deliver definitive ROI and long-term reliability.
About the author
Michael Hanson, Executive Vice President of Star Micronics America, has dedicated his career to the retail technology industry, with over 25 years of experience driving innovation and growth. At the helm of Star’s operations in North and South America, he focuses on long-term strategies, emerging market opportunities, and new product development. Under his leadership, Star Micronics has strengthened its position as a market leader in point-of-sale solutions.
