Credit, Debit Comprise 60% of Dollar Sales: Study
Credit and debit payments now exceed 60 percent of dollar sales, followed by cash at 23.1 percent, according to a new study by the National Grocers Association (NGA). And while check usage in the grocery channel has fallen to single digits as a percentage of sales, it continues to have the highest average transaction value at $63.21.
NGA and Balance Innovations have published the results of their joint 2013 Grocery Retailing Payments Study, which is designed to create understanding of industry payment practices relative to cash, check, debit and credit management, payments automation and other payments-related topics, such as coupons and e-commerce.
"There is a lot of uncertainty about the technical future of payment processing," said Peter J. Larkin, president and CEO of Arlington, Va.-based NGA. “While consumers have the most say in the success or rejection of future payments innovations, retailers must also keep a watchful eye on their costs. Costs related to employee handling can be an indication of the need to improve payment processes and remove inefficiencies, such as the more streamlined handling of cash and checks."
Added Shelley Bosler, SVP of strategic initiatives for Balance Innovations: "Understanding the latest trends helps retailers optimize their own internal payment mechanisms to reduce shrink and inefficiencies and to meet payment processing needs."
Among the report’s findings:
- The average transaction size across all forms of payments stands at $27.65, with weekly transactions per store averaging 11,000.
- The most commonly used payment technologies include a point-of-sale at the service desk, check cashing and Western Union, offered by at least half of grocery stores.
- Two-thirds of grocery retailers do not yet image checks. Among those that do, check imaging in the back office is more common than in-lane.
- One-third of grocers have some kind of online ordering system in place. An additional 8 percent are planning to add online ordering in the next two years.
- At 71 percent of companies, cashiers are involved with counting tills. The majority of companies (94 percent) have a second person counting the drawers as well, typically bookkeepers or front-end managers. About half of stores benchmark and track the time it takes to count drawers, which averages 7 minutes.
- Six in 10 companies have automated over-short reports that they share throughout the company to limit and prevent shrink: 80 percent share the findings with store operations; 53 percent with loss prevention and 47 percent with internal audit.
- While 12 percent never do store cash audits, most companies do them either weekly (20 percent) or quarterly (28 percent). The chosen methods vary: 38 percent conduct surprise store cash audits and 33 percent conduct both surprise and planned ones. Companies spend three hours to conduct an audit.
- Seventy-two percent of checks in the grocery channel tend to be ACH with the remaining 28 percent being payroll, WIC or other checks. Slightly more than three-quarters of stores cash payroll checks.
The NGA is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. The independent grocery sector is accountable for close to 1 percent of the nation's overall economy and is responsible for generating $129.5 billion in sales, 944,000 jobs, $30 billion in wages and $27 billion in taxes.