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Armored Car Issues: Retail Treasurers Face Slim Pickings

  • By Andrew Deichler
  • Published: 7/17/2015

Armored-car usage is a top concern for retail treasurers, if the recent AFP Retail Roundtable in New Orleans is any indication. Because cash is clearly still an important part of retailers’ business, securely transporting it via armored cars is a necessity for many merchants. But many retail treasurers face significant problems with their armored-car carriers.

The big problem: Not enough choice

Perhaps the biggest issue retail treasurers run into is that there are not very many armored carrier services out there to choose from. Craig Martin, executive director of the Corporate Treasurers Council, expressed interest in how retailers actually negotiate terms with the carriers to get the most out of them. “How do you pressure, leverage or push on the car services? What do you do?” he asked.

One retail treasurer noted that her company switched its armored carrier because it didn’t pick up cash when it was supposed to. “And if that happens again, we’ll switch again,” she said. “But what was explained to me was that what we’re really paying for is security, and this service is very, very secure. They have a hard job; they carry guns, they put their lives on the line. But they’re really not that great at getting there all the time.”

Indeed, sometimes simply changing providers can help. Matthew Alston, senior consultant for Q&A Payment Solutions, a consulting agency that helps retailers reduce the cost of armored-car collections, relayed a story of two national retailers that switched armored carrier services. “One was with carrier A, and the other was with carrier B, and they both hated their own carrier,” he said. “So they switched, and now they both say their getting good service from their carriers.”

Managing the armored carrier service brings its own headaches. A treasury director for a major retailer explained that her department recently took over handling armored carrier services from the loss prevention (LP) department, and that has created its own issues. “The LP department was focused specifically on the service and what they were going to pay for,” she said. “We’re in the midst of going back and negotiating with the carriers and finding out what the LP department actually didn’t pay for. We want to get zero.”

Once this issue is resolved, the treasury director will be in a better position to negotiate and make sure that her company is not paying for services that it’s not receiving. “We want to be able to say on a monthly basis, ‘You’re charging exception time,” she said. “You’re charging extradite time, and we can tell by the phones that you’re not. That’s unwarranted.’”

Still, taking over from LP ultimately has been a “big benefit” for the retailer, she added. “We were overlapping constantly on front end service, issues with the stores—who they are supposed to call, how we get the information back and forth—and it’s just been so much easier,” she said.

Benefits of treasury management

A treasury manager from the same retailer elaborated on just how much taking over front-end operations has benefited treasury. “We now own the front end of the store completely, from the armored carrier perspective to the sales audit piece of it,” she said. “From every single transaction that occurs in the store to the treasury operations side of it; we own that. So it’s now this one-stop point for the store. We have one group email, and whenever anything that happens on your front end, you just go there. There’s 12 people watching that email.”

Seeking outside help also is a good idea. After the retailer’s treasury function took over its armored car services and the front end, it partnered with Q&A Payment Solutions to see if it could reduce costs. “It’s one of the best things we ever did,” the treasury director said. “We cut our armored car costs by $350,000 a year.”

The treasury manager explained that the retailer is very cash-heavy in some areas, and its in-store safes have a $50,000 limit for cash. “We outsource all of that analysis to Q&A, and have them come up with the armored car schedule for all of our locations,” she said. “Some of our stores are at the $50,000 limit every day, so they need daily pick-up. But other stores are very credit card-heavy and don’t need pick-up more than twice a week. So we just shifted, based on demographics and tender.”

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