Cash register theft is not a fun topic to think about, let alone discuss. It may feel better in the short term to turn a blind eye to employee theft or accept it’s just a part of doing business.
But these stats will downright shock you and probably change your mind:
- According to CalRest, 75% of employees have stolen.
- Willis North America calculates that 90% of all significant theft losses come from employees.
- My favorite stat and the topic of this blog post… ⅓ of employee theft occurs because companies lack internal controls.
Did that get your attention?
That alone should make it clear that…
Your Business Needs To Combat Employee Theft!
So let’s get into some internal controls you can implement into your business to catch employees stealing from the cash register.
First, we have to fully understand the four most common cashier theft techniques.
Four Common Cashier Theft Techniques
This scam involves an employee charging the customer the total price for the item, but taking a little cash for themselves. Skimming will result in the dreaded cash register imbalance. However, savvy employees will skim when customers present a coupon code but still charge the total price.
Not Recording Sales:
Probably the easiest way for employees to steal is by taking cash for a transaction but not processing the transaction in the POS. since the customer has given money for the item, it’s now legally theirs. However, the employee can pocket the cash because there was never a transaction receipt (unless the customer asks for one). You’ll never this is happening until the end of year stockage, and by then, it’ll be virtually impossible to track this scheme to a specific employee.
Under ringing is similar to not recording a sale. This theft involves your employee taking cash for multiple items but ringing up the transaction for fewer than the total items purchased. For example, if a customer buys five apples, but John Doe only rings them up for 4 keeps the difference for themselves. Nobody will be the wiser until the end of year or month stockage.
Blunt theft is when an employee takes cash from the register. This scheme is about as blunt as our description of it.
Video Cameras Integrated to A POS
Video cameras are the best way to catch an employee in the act and confront them with proper evidence. In the first incident, give employees the benefit of the doubt because sometimes fishy things happen. However, if your cameras and reports show a consistent problem, then you’ll have the proper video and report evidence to take decisive action.
Some video monitoring services allow you to integrate your POS into your security camera system to see if the rung-up items are the same items on camera. Integrated POS systems come in handy since it’s more efficient than having to sit around and comb through CCTV footage for an entire workday.
We advise you to store security footage for at least 30 days since the time between incidents can be staggered.
One of the most tried and true procedures is separating duties meaning the person using the cash register isn’t permitted to count cash at the end of the day. Whoever runs the cash to the bank isn’t allowed to handle or track cash throughout the day.
This measure keeps everyone accountable for everyone’s actions and makes it easy to track where errors (intentional or not) may have occurred in the chain. The more employees you can afford to properly train into this process, the better actually because 79% of employee theft cases involve more than one employee committing the crime.
The best way to attack employee theft is from multiple angles. The trifecta is your customers with employees keeping each other accountable and video cameras keeping a watchful eye.
The only question is, how do you incentivize customers to surveil your employees? The simplest way is to post signage stating that if a receipt isn’t provided, they can get a free item or gift card. The signage alone is usually enough to prevent skimming and under-ringing.
However, multiple customers taking advantage of the offer should be a red flag that something is awry. instruct your employees to keep merchant receipt copies until the register is closed at the end of the night.
This is a tricky subject, but a 2012 Harvard Study posited that good wages and benefits are linked to low turnover and more honest workers.
Raising wages and finding ways to improve employee loyalty will go a long way towards reducing employee theft.
Perform Background Checks
For some people, reciprocity is a foreign concept, and no matter how much you pay them or how well you treat them, they will betray your trust.
Again, we’re not trying to dig into the psychology of crime, but do note that 40% of employees that steal from work have experienced HR red flags. Your business may not have an HR department, so do with this info what you may.
Tighten Up Your Inventory Control
Most food and drink businesses with loose inventory controls accept employee theft as a cost of doing business.
However, if you tighten up your inventory control, you can mitigate some of your theft issues.
- Set standard portion sizes for all food and drink items.
- Set up your POS to record quantities of individual items, similar to how the grocery store checkout can weigh a potato instead of charging the same price for every potato.
- Routinely compare the purchase inventory with sales records to account for discrepancies and investigate theft as soon as it appears to be present.
As a business owner, you may think that simply recording your employees will be enough to end theft.
Surveilling employees can help, but you need to take the extra steps to tackle the problem and keep employees honest. If you need help implementing a video security solution that works for your business, hire Safe And Sound Security.
Until then, best wishes implementing these tips into your business.