Hacker News Reader

Comment by raincom | Hacker News Reader

The cost is not so much about paying armored trucks, but most banks don't want to deal with small businesses that deal with cash.

View on HN

In the UK the banks are happy to deal with businesses paying cash, but there are fees, and if your holding cash on premises then you’ll need insurance, which means you’ll need a safe…

The reason supermarkets offered cash back was that this allowed them to massively reduce the amount of cash held on site and thus reduce their insurance costs.

Large chains, large businesses have no problems accepting cash, nor do they have problems depositing cash with banks. Even if a mega bank, say, Chase/Bank of America in the states, doesn't want to deal with cash deposits from a large retailer, the latter can indirectly 'own' a credit union or another small bank that accepts cash deposits, as this bank can still follow AML regulations. Big banks consider cash deposits/withdrawals and money order deposits to be a big headache, and also back office costs for enforcing AML can be reduced by not dealing with cash/money orders (in other words, any untraceable monetary instruments).

> The reason supermarkets offered cash back was that this allowed them to massively reduce the amount of cash held on site and thus reduce their insurance costs.

But wouldn’t this increase the amount of cash you need on hand to ensure you can make change and now give cash back?

Nah. Cash back is all comparatively large notes (£5, £10, £20) and it’s mostly smaller stuff you need for making change. It vastly reduced the amount of cash they needed on site, though it didn’t really help with the need for coins to make change with.

I’m not sure they even offer cash back these days, it has been so long since I asked, and the number of cash transactions has dropped massively over the last few years.

I swear money handling cost will be reduced by one simple thing that some countries like Canada and Ireland have done (and can be improved): ditch the smaller coin denominations (and maybe add higher denomination coins like $2 like EU and UK have)

Anything under 10 cents gets rounded down/up accordingly

It doesn't matter. Minting and transporting it, even in your pocket costs more than you'll ever get in dealing a more "precise" denomination

That's an awful idea. Especially the "down/up" part.

They ditched pennies in Canada and round the cent. Works fine.

This already happens with cents. Your tax frequently comes out to a fraction of a cent, and it gets rounded to the nearest cent.

The US used to have a half-penny coin. It stopped being minted in 1857.

The purchasing power of the half-penny at the time was about as much as a quarter has today.

It wouldn't be crazy to get rid of all coins worth less than 25¢ and round all purchases to the nearest quarter.

Obligatory CGP Grey: https://youtu.be/y5UT04p5f7U

That doesn’t stop theft by employees or robberies.

You don't have to tell me that ;) https://news.ycombinator.com/item?id=9563474

Reply on news.ycombinator.com