It should be one of the easier sides of retailing cash comes in for products purchased, you take it to the bank and let your account build up a healthy balance. But it's not quite as simple as that. Ever-growing bank charges, changes to account structure and the increasing lack of a traditional bank manager-business owner relationship mean retailers are running around in circles looking for a cost-effective way to bank their cash.
Dave Phillips, who runs four Spar stores in Pontypool, Gwent, says his banking is considerably more expensive since charges have become based per transaction and now total £700-£1,000 a month. He points out that charges have risen 150% in the past 12 months on one of his accounts alone.
"Before the recession, charges were £500 a quarter, but now it's £500 a month," says Dave. "On another account charges have gone up from £200-£300 a month to £400-£500 a month. You used to be able to negotiate deals, but not anymore it's a case of 'this is the fee and that's it'.
"I want my circumstances to be taken into consideration by a human being, not a computer. When you've been loyal, you don't get any benefit and that doesn't make sense. If you go as a new customer they are all over you."
Steve Bassett, who runs three Londis stores in Weymouth, Dorset, is one retailer who has been benefiting from free banking with Lloyds as a new customer, but now that is coming to an end so he is looking elsewhere. "I'm forced into jumping from bank to bank, looking for the cheapest deal I think they call us rate tarts," says Steve. "HSBC is offering 18 months free providing your turnover is less than £500,000 a year, but I want to find something more long term.
"The bottom line is that the banks don't understand the cash nature of retailers and they don't understand margins. It's irritating that they charge per £100 and they keep putting it up so that £100 is always getting chipped away at."
Baz Patel, who runs Nisa-branded Molly's in Luton, Bedfordshire, used to have a good deal with Santander and the Post Office until his charges increased from £200 a month to £1,300, as well as PayPoint transaction charges rising from 10p to 45p per £100. "We now can't carry on banking with the Post Office so I'm shopping around for other deals. I've had that account for 11 years and then all of a sudden they said they would be charging. I'm trying to pay all my bills with cash and looking at a self-fill cash machine."
Karim Mawji of Young's Newsagent in Pinner, Middlesex, has been forced to look outside of the major banks for a more affordable alternative since his charges with Nationwide were increased to 50p per £100. One possible solution could be Metro Bank. While it only has two branches in London and another due to open in Uxbridge, the bank plans to have 10 stores within two years and a target of more than 200 within 10 years. It has offered Karim a £10,000 cash a month limit, no charges and unlimited cheques.
"Until Metro Bank is national, the only sensible way to use the bank is to employ a security courier company, which would be an extra cost. If you're doing it once a week, it's still a viable option," says Karim.
He adds: "The problem for retailers is always about getting rid of cash. Banks exist, but they don't have a cash centre service or branches. Even HSBC and RBS offer accounts free to operate as long as you're doing only electronic transactions. Retailers get penalised for having cash. For many, the charges for banking cash are out of line with the business what you're paying in charges could cover a part-time member of staff."
Like Karim and many other retailers, Steve is always looking for ways to move cash out of the business. "Now, if I need any money I pay myself in cash, and I pay the staff wages in cash weekly," he says. "They like it and it's a good way to reduce cash. I'm also looking at a self-fill cash machine. It would be nice if I could pay WH Smith in cash, too."
Naweed Ashraf, who runs Shieldhill Stores in Falkirk has also changed the way he operates to keep his cash charges to a minimum. "I don't want the charges I'm here to make money, not give it away," he says. "I've had to change the way I pay for things and use cash as much as I can, because I don't want to be in the business of paying charges."
While banking charges are increasing, the strength of relationships between the bank and customer, along with service levels appear to be going in the opposite direction. Roger Dicker, who runs Kentford Village Store & Post Office in Newmarket, has one account with Santander and another with Barclays, and says that since Santander took over Alliance & Leicester service levels have fallen dramatically.
"A simple thing such as ordering a cheque book has been a nightmare," he says. "You order it online and then it doesn't come. They admitted that they'd really messed me around and said they would credit me with £10, but I never saw that. It took three weeks just to get a cheque book!
"Barclays is better, but trying to get hold of the branch is impossible. There's no business manager so you can only phone a call centre and you get charged for that. You just want a relationship with someone at the branch. That doesn't exist anymore and it's disappointing."
Steve Bassett also has an account with Santander. "I'd always had a good relationship with Alliance & Leicester, but since Santander that relationship has gone completely. When you've got a Post Office and had an Alliance & Leicester account you could bank your money within your own four walls and that made a lot of sense, but then Santander moved the goal posts and you can't do it anymore."
Many retailers criticise the blanket approach banks are taking with small businesses, and don't see the situation improving in the near future. Says Baz Patel: "The banks need to look at accounts on an individual basis. If you've got good history with the bank, that should be taken into account. I've not had one bounced cheque or direct debit but your track record means nothing."
Steve, meanwhile, is hopeful that the rise in contactless payment may alleviate problems for c-store retailers in the future. "Contactless payment could be a fantastic opportunity for us if the whole population moves to it because it will mean there won't be so much cash floating about."