Cash drawers allow nearly anyone to operate a small store or business from almost anywhere in the world. All you need is money and a place to put it. These repositories are not regulated by any laws and do not need to be registered in any way. Because of this, they are the go-to for everyone from children selling lemonade to a small business’s booth at a trade show.
Uses for Cash Drawers
Bright and cheery, a farmer's market is a staple of American spring and summer, where you can buy locally made honey, soaps, home-grown vegetables and, depending on your area, fair-trade coffees and teas. Some of these markets operate by purchasing tokens, some leave the taking of payments to the sellers and others require that cash be used. As you wander the market and make your purchases, your change will all be made from money sitting in a box or small drawer in front of your seller.
Whenever you happen to go shopping at a local market, craft show or art walk, you have probably seen a cash drawer. Odds are you’ve operated one either through school clubs, sports-team fundraising or raffles. Even though many small-scale sellers use card readers, the cash drawer is still widely in use and does not show signs of going away anytime soon.
Maybe you’re starting your own business and are going to get your start with small-scale selling at places like craft fairs. If that’s the case, it may have been quite some time since you operated a cash drawer. Because of the analog nature of a cash drawer, they haven’t changed much at all since their inception, so with a basic understanding of stocking a cash drawer and chain-of-custody procedures, you can easily get your small-scale operation off the ground.
When to Use a Cash Drawer
If you intend to sell in any open-market environment, you’re going to need a cash drawer. Even if you don’t anticipate using much cash, you would be surprised how many people choose to use cash only at events like this. Using cash alone is an excellent way to monitor your spending (once the money is gone, it’s gone). Many people also enjoy the tactile nature of cash.
The best rule-of-thumb for when a cash drawer is needed is “better safe than sorry”. If you don’t own a cash drawer, there are countless models that you can purchase. You can find a variety of models for sale online that can vary in cost from around $20 to over $200. Which drawer will work best for you is dependent on what sort of security you want to have for your cash.
Choosing a Cash Drawer
In most cases, sellers do not need to have an expensive cash drawer. While expensive models might look the most impressive, unless you are handling large quantities of cash (like at an auto or storage unit auction), a simpler model will do. If you are working for yourself and do not have people working under you, your personal preferences are the only consideration when choosing your cash drawer.
If you are working a multi-day event and have volunteers or employees helping you, you should look into a cash drawer that locks securely with a key. This extra level of protection is not because you should not trust your employees or the staff at events you attend. Instead, this protects them in case anything is miscounted or if they have to leave your booth to handle an emergency elsewhere. In short, if you aren’t going to be directly with your cash box the entire time that you are working, you should be able to lock it.
Cash Drawer Setup
When you are preparing for an event, you will need to consider how much cash you will need to have on hand for the event. Will you be doing any shopping for supplies? Are you going to purchase food and drinks for yourself and your staff? Could an emergency crop up?
To figure out how much cash you will need, you should start by sitting down with a pen and paper. If you’ve never attended an event like this or are new to an area, you will need to look up prices for the basics that you will need to purchase. Calculate how much money you will need to handle the odds and ends that might come up, such as food, drinks or parking.
Your next step should be to consider your stock and its prices. Ultimately, you should have enough cash in the drawer to make the change for your least expensive item if a customer pays with a 100-dollar bill. From there, consider how people purchase at that specific event. Remember that you should have more money in smaller notes because you may need to count back change during a purchase.
Be Ready to Deposit
All the planning that you do may not yield the proper cash drawer amounts regardless of how much you know about the venue and event. Sometimes, for instance, the weather changes and drives a lot of traffic or keeps people home. Or you may end up with more money than you are comfortable having within your drawer, or if you run out of change, you or a representative may have to run to the bank. In this instance, you should have cash-handling policies available.
Setting Policies for Cash Drawer Use
How are you going to manage your money? Cash drawer policies should not be too in depth or complex. A simple chain-of-custody procedure is the best method for handling money transfers from the bank to your cash drawer and vice versa.
A chain-of-custody procedure is typical with cash, medical information and evidence in a criminal investigation. With money, the procedure could be to count down the drawer on a regular interval throughout the day, and if the cash goes outside of a threshold, you go back to the bank to get proper change and handle deposits.
Cash-drawer policies should also include what to do with credit card receipts and other legal proofs of purchase. While many transactions occur using cell phones and do not create paper trails, many systems require a signature and provide physical receipts for customers. You should have your copy of the receipts in a specific location within your drawer. Most cash drawers have a simple slot that you can push the receipts through without opening them.
How to Do a Bank Deposit
Smaller operations may not require you to dictate who cashes out your drawers and takes money to the bank. In that case, all you need to do is take out whatever money and receipts you want to deposit, place it in a secure bank bag or envelope and drop it off. Many banks have night-deposit drawers that are secure in case you need to access a safe way to deposit your funds outside of business hours.
If you have a staff that will be handling this for you, then you will need strict policies for who handles that cash and when. Key-holding employees are typical in the restaurant and retail sectors. These employees are responsible for managing the cash and do not need to be full-fledged managers. Instead, these are people you trust to handle depositing money and collecting small bills that you will use to make the change for your customers when they purchase an item.
Sample Cash-Drawer Policy
- Only key-holding employees may cash out a drawer.
- Count out the drawer every two hours and only during non-busy times.
- If the amount of cash in the drawer exceeds $1,000, take $500 in the largest bills to deposit.
- Ensure that there is at least $20 in one-dollar bills and $20 in five-dollar bills on hand.
- Place deposit money in a secure envelope or bag.
- Deposit it in a specific bank.
- Ensure that you have enough one-dollar bills, five-dollar bills, and coins to make change.
Safety When Using a Cash Drawer
Because cash drawers are analog and are easily able to be picked up and moved, you must keep your safety and your staff’s safety in mind with your cash-drawer policies. Since you are responsible for your cash drawer, these policies are up to you. They should be tied to your chain-of-custody procedures:
- Never count out money alone.
- Always follow deposit procedures. This could include making sure that there are always two people doing deposits and withdrawals from the bank.
- Never leave deposit bags or envelopes unattended. This could include making sure that you never leave them visible in your car if it is parked.
Preventing Robbery of Cash Drawers
Unfortunately, you will also have to protect yourself and your employees in case of a robbery or theft. In all cases, you want to protect your employees and yourself before you protect the money in the drawer. The cash and even your stock can be replaced, but you can never replace a life. Some examples of safety in the case of theft or robbery include:
- Never attempt to fight a robber.
- Listen to the robber’s instructions calmly and quietly.
- If the drawer is easily moved and you cannot unlock it, hand over the whole unit.
- Remove yourself from the situation before you call for help.
- Under no circumstances should you argue with the robber.
- Prioritize your safety and the safety of those around you.
Getting Small Bills and Coins
On occasion, you may find that you can no longer make change with what’s left in your drawer. You’ve likely seen signs at small restaurants, retail outlets and conventions that say, “Need Fives and Ones" or “Need Quarters.” A sign like this is one of the ways that you can get more small bills for your drawer.
Asking your customers and fellow sellers is the most common method for gaining small bills. In seller situations like craft shows, there is usually a sort of camaraderie and team spirit among sellers. If someone needs small bills, sending a volunteer around to ask is an easy method. If you do this, you should also reciprocate whenever possible.
Another way to get small bills is to take large bills from your drawer and go to a bank to get the small bills that you need. During the holiday season, it is extremely common for retail establishments to make more than one bank run a day.
Adjusting Your Policies
Regardless of how you establish your cash and change drawer policies, you may have to adjust them for specific events. Keep track of how difficult or easy your cash management has been for particular functions. Look back on these notes to plan other events.
Danielle Smyth is a writer and content marketer from upstate New York. She has been writing on business-related topics for nearly 10 years. She owns her own content marketing agency, <a href="https://www.wordsmythcontent.com/">Wordsmyth Creative Content Marketing</a>, and she works with a number of small businesses to develop B2B content for their websites, social media accounts, and marketing materials. In addition to this content, she has written business-related articles for sites like <a href="https://www.sweetfrivolity.com/">Sweet Frivolity</a>, Alliance Worldwide Investigative Group, Bloom Co and Spent.