It costs 6.5% to Handle ……….credit cards? NO CASH!!!
One of the companies represented at the Temecula Parking Group had done an extensive study on what it costs to take and process cash in parking operations. Their goal was to compare the costs of handling cash to the fees charged by credit card companies. The result, the cost to handle cash was 6.5%, much higher than any credit card fee.
Some of the group members thought the number was low but we were told that in its efforts to be fair, the survey always rounded down and took the lower estimates when loss due to theft and carelessness were considered. Did you know that banks charge a fee to take cash deposits? When you have large cash receipts, you need armored cars, vaults, and often guards that would be unnecessary if there was little or no cash involved in the process.
Cash acceptance means that cashiers probably have to be present. Sure you can accept notes and coin at POF machines, but there is usually a fall back person in a central location to step in when machines fail or the customer cannot negotiate the process. A tremendous amount of auditing time and energy is put forth dealing with and accounting for cash transactions. Consider the difference in cost of a POF that accepts only credit cards and one that accepts cash and gives change. That number can be in the $40K range.
Often owners see a line item that says “credit card fees” and balk. They don’t see that cumulative costs of dealing with cash.