Volumatic is the UK’s leading manufacturer of intelligent cash handling equipment, supplying a range of cash handling solutions that are more relevant than ever to retail, banking and leisure industries.
Volumatic’s products count and protect over $1bn of cash every day, worldwide. In the UK, economic uncertainty has created tough conditions on the high street, pressing retailers to balance tight budgetary constraints with the need to find increasingly innovative ways of protecting and generating profits. Not only that, forgery is a growing problem that Volumatic can also help retailers handle. Volumatic’s range of cash counters, sorters and transport and storage products are simple and quick to use, improving efficiency and security of cash handling. Volumatic’s Commercial Director, James Harris spoke to The Grocery Trader.
The Grocery Trader – First of all, James, as Commercial Director, what does your job involve?
I’m responsible for global sales and marketing and all commercial matters. We operate worldwide, but the UK generates 60% of turnover.
We’re a UK-centric business: this is where we started, and our technologies have a dominant position here. That said, they can all be adapted easily for use elsewhere, and we expect our exports to grow.
GT – What’s your professional background?
I graduated in Law then joined Walkers Snack Foods as a graduate trainee, going on to various jobs in sales and marketing. From there I went into data technology with Cable & Wireless, then into high-level engineering with a North Eastern group. Most recently I joined Halma p.l.c.’s safety devices business, leading to this job.
GT – Do you get involved in developing solutions for major retailers?
Yes, I do. I spend as much time as possible with customers, as this is where our feedback comes from for future innovations.
GT – We hear a lot about cash being on the way out in the UK. Is there any truth in the rumour?
There‘s a lot of talk about cash being dead or dying, but much of it comes from the people who stand to benefit from charging for using cards. Cheques are definitely dwindling, but cash remains strong. £48.6bn of notes were in circulation in February 2009, up 37% from 2005. We’ll always have multiple means of payment.
GT – How does the cost of handling cash for a supermarket compare with card transactions?
The BRC’s latest Cost of Collection survey states that each cash transaction costs the retailer 2.1p, each debit card transaction 8.5p and each credit card transaction 34p. It also revealed cash is used in 54% of retail transactions, representing 33% of total sales value. Given the value of big-ticket items bought in retail, that’s a lot of cash!
GT – Tough conditions are driving people to retail crime. How bad are things compared to ‘normal’ times?
Heavy job losses and stretched budgets are resulting in fewer customers in stores and more people making bad choices by committing crime.
All available measurements show retail crime growing. The BRC’s January 2010 report said retail crime was worth £1.1bn, up 10% on 2009. Looking at the global measure, 34% of retail crime is attributed to employee theft. Stores don’t recruit thieves, but if staff get opportunities to make bad choices, they can be tempted into dishonesty.
GT – What can retailers do?
In these difficult times, you can’t always make customers spend more money but you can prevent unnecessary losses by handling cash intelligently.
Retailers and law enforcement are working closely, collaborating and sharing information about CCTV and other security techniques. A recent BRC Report shows 17.8% of cash shrink is down to administrative error: cash is often touched many times from the moment customers hand over money to when it goes to the cash centre, and at each stage there’s the opportunity for error or malicious intervention.
GT – What difference can Intelligent Cash Handling make to retailers’ profits?
Taking control of cash to deliver reduced shrinkage and greater process efficiencies can impact significantly on profits, for surprisingly little investment.
If every till has an average error per day of £5, a retailer with 3,000 tills will have to deal with errors of £15,000 every 24 hours. That places a massive burden on cash handling and administrative processes. We have case studies showing our systems reducing the cost of money handling by 75%, by removing cash processing. We’ve also seen total elimination of cash errors, and 100% detection of forgeries.
GT – When was Volumatic founded, and who owns it now?
Volumatic was founded in 1972 and bought by Halma in 1982. Halma p.l.c is a FTSE 250 company with a market capitalisation of over £1bn. Halma is made up of around 40 subsidiary companies that specialise in security, safety and analytics.
GT – Where is Volumatic’s global HQ? How big are you worldwide?
Volumatic is based in Coventry. We have a US sales office in New York, and distributors in over 20 European countries and a growing number of territories elsewhere. We have strong language skills in our head office, and are well placed to expand our exports.
GT – Where do you develop your technologies, and where do you manufacture the products you sell here?
We develop our technologies in-house in Coventry, but engage third parties as appropriate, for example we developed the CounterCache Intelligent (CCi) with Japan Cash Machine.
We’re a virtual manufacturer: Coventry is the location for design and marketing, and final assembly and testing, but the bulk of manufacturing takes place in China and Eastern Europe.
GT – What different cash handling solutions do you offer for retailers?
Volumatic’s history is in cash storage, embracing secure storage at point of sale and cash counting. All our current products are for POS or desktop use in the back office: we don’t make cash recycling kit or ATM’s. We supply count by weight and friction note counter technologies. We also produce forgery detection equipment, and secure trolleys and cassettes for moving cash.
GT – Which are your biggest selling items?
The Volumatic CounterCache range of robust POS security products has 80% of the UK market. Our CountEasy cash counter is number one in its sector: since launch in 2004, it has established itself as the most reliable count by weight machine available, and the preferred choice of many leading retailers and banks.
GT – Which items of kit would a solution for a supermarket comprise?
A typical supermarket would have CounterCache cash storage at point of sale and some means of transporting cash, such as cash trolleys and cassettes. The back office would have CountEasy cash counters and coin sorters, and a data transfer system into their treasury management set-up, either through a simple printer or a networked data solution.
GT – Which are your newest products?
Our newest launch is the CounterCache Intelligent®. The CCi brings note validation, data capture and secure storage to the front line at POS, allowing cash processing to be faster, less expensive and more secure. Once a banknote is deposited into the CCi, it doesn’t need to be touched again until it reaches the cash centre. In tests, CCi detected 100% of all known UK forgeries. With a JCM note validation head, this performance level can be maintained continually. The CCi captures every cash handling event and provides both live data and a full audit trail of all cash handling activity from the POS. The CCi is mounted beneath the till counter for “out of sight” secure storage, and either networked or interrogated via PDA.
Volumatic’s CounterCache intelligent machine
GT – What size retailer is CCI aimed at?
CCi is ideal for any size retailer, with 2-70 tills. Wilkinson is currently installing CCi at 3,500 till points, and it’s on trial in Tesco, ASDA, WH Smith Travel and others.
CCi revolutionises cash handling at point of sale, and is approved by banks and cash in transit services.
GT – What’s so revolutionary about it?
With CCi, you automatically know how much cash you have and notes are stored in a tamper-evident pouch. You can split that data out and streamline the cash handling process. We’re now looking at adding further value: typically when a cash centre receives retailers’ takings, all the retailers using that cash centre want it counted as soon as possible, which gives the cash centre a spiky work load, to say the least. If the cash centre knows what’s coming, they can credit the retailer for that amount on the spot, then handle the cash on a more efficient working profile.
GT – What are your solutions like for store staff to use?
Our solutions are simple and quick to use, improving efficiency and security of cash handling. Many of our products are plug-and-play and take seconds for operators to start using them: training managers takes a matter of minutes.
ASDA is extending its trial to more stores, and say one attraction of the product is that it involves virtually zero training.
GT – How much overseeing and monitoring of staff do your systems need, for security purposes?
Our systems don’t need any overseeing or monitoring. They stop store staff handling cash: it’s in a sealed unit from the moment the customer hands it over until the cash in transit people collect it.
GT – What kind of reductions in shrinkage and increases in process efficiencies are we talking about?
It’s a matter of record that with one major retailer the CCi has saved individual stores over 20 cash office hours per week, eradicated cash errors and stopped all forgeries.
Wilkinson, one of our biggest customers, achieved a 75% reduction in cash processing and stopped forgeries dead. Another major retailer targeted a 20% reduction in fraud and cash losses, but achieved an 87% reduction within three months.
A further efficiency gain is that CCi removes the need for skimming of notes by store management, eliminating till downtime and letting staff carry on working.
GT – What levels of investment are involved?
Investment can be anything from a few hundred pounds for a small retailer, to six or seven figures for a large retail estate.
GT – How many pieces of your traditional mechanical counter cache equipment have you supplied here to date?
We have over 500,000 mechanical cash devices currently operating in UK retailers, including the Co-op, Somerfield, Boots, WH Smith, HMV and Wilkinson.
GT – How big is the problem of forgery in the UK?
Worsening economic conditions are likely to make more people attempt to pass forgeries. The Bank of England announced that 686,000 counterfeit notes were seized in 2008 with £14m face value, 140% up on 2007.
GT – How easy are forgeries to detect?
Forgery is a constant battle between the Bank of England and the criminals. It’s increasingly sophisticated, needing infra red and magnetic detection. Forgery is not a consistent problem: criminals target particular retailers, but move on when forgery detection equipment is installed, rather like when burglar alarms are installed.
GT – What different products do you offer to help detect forgeries?
The Volumatic TruScan is a forgery detector that can be used with both sterling and Euros, and pays for itself with the first few detected counterfeit notes. In tests, it detected over 90% of all known forgeries. The TruScan uses infra-red detection, magnetic ink, magnetic code and 2D size recognition.
CCi takes detection to the next level; it offers total security at POS rather than the cash office, when it’s too late, and is future proof, with downloadable software. Retailers have different policies for rejecting suspect banknotes, but with CCi they can say objectively that the machine doesn’t accept it.
GT – How are you set up to service retailers’ needs for intelligent handling solutions?
We have a UK national account team and a strong field sales presence. We also have a great service and support network, backed by nominated installers and support partners.
Our equipment’s typical failure rate is less than half a percent: if we can’t fix it by phone, we have a ‘box swap’ service, with couriers bringing replacement items and stores’ approved staff swapping them over with minimum disruption.
Customers don’t need technical support on site, as our systems are really robust. The CountEasy kit has a five-year warranty, while we know of mechanical CounterCache units in place for over 20 years.
GT – What’s involved in developing a solution for a retailer?
The most critical factor is process integration. We work with retailers to streamline their cash handling, to remove complexity and increase security. We’re very sensitive to security concerns, and operate with discretion and integrity.
As part of the process of developing a solution, we help retailers audit their cash handling and highlight areas with potential to improve efficiencies.
GT – How long does it take to implement a solution?
Some of our products are plug in and play: speed of implementation is driven by process integration into customers’ treasury management and other systems. Installing CCi is typically an overnight job, but we put in cash counters in minutes.
GT – What standards are your products certified to?
We’re CE-approved and so on, but there are no specific cash standards for our kit. The British security industry standards for safes, alarms and CCTV don’t apply.
GT – Which industry bodies are you connected with?
We work with the Association of Chief Police Officers and the BRC, and speak regularly at retail fraud conferences.
GT – Looking ahead, what external factors do you see impacting on demand for your solutions?
The economic climate is the biggest factor encouraging fraud, but it also discourages spending by retailers. We’ve suffered a downturn the same as everyone else, but the increase in fraud is self-evident and retailers must protect themselves.
GT – Where do you see Volumatic going from here?
CCi will be the primary factor in our growth: it comes down to industry adopting the new technology. We intend to increase our global footprint and take the technology to a wider audience: in the short term, CCi is about to be integrated with Torex’s retail POS software in a major retailer, which we’ll be announcing shortly. We’re set for many more such collaborations with technology partners and also with banks and cash in transit services.
We’re working on the next generation of intelligent cash handling for bulk notes and OEM solutions, taking our approach into self payment systems such as vending, self checkout and parking. It’s an exciting time all round.