Cash management technology helps deter internal cash theft
April 10, 2018: By Dave Lunn, Commercial Director, Tellermate
Retail crime is up, regardless of where you look. And as you already know, this theft is being committed not only by customers, but by employees, too. In fact, one in 27 employees was apprehended for internal theft in 2016 – according to the 29th Annual Retail Theft Survey by Jack L. Hayes International.
A simple Google search will bring up one article, report or survey after the next that provides information and statistics regarding shrink and the costs it has on businesses. Most of those figures have to do with inventory theft. What’s harder to pinpoint, however, is the cost of cash loss retailers suffer.
Businesses are reluctant to admit to cash loss problems for various reasons. Oftentimes, they have limited visibility as to how or where cash loss occurs – at the point of sale (POS), the back-office or somewhere between the two. Businesses also fear that admitting to cash loss problems – particularly in-house – is also an admission of failure to prevent it. Plus, they don’t want to divulge that they’ve failed to invest in retail technology that reduces and even prevents cash loss.
But sweeping this cash loss conundrum under the rug won’t make it go away.
The British Retail Consortium’s 2017 Retail Crime Survey showed that employee theft grew by 36% since the previous year’s survey. A separate LPM Special Report entitled Employee Theft, points out the reasons U.S. employee-thieves engage in stealing time, money or products from their employers:
Enjoyment – they think stealing is fun
Entitlement – the world owes them more than they earn
Desperation – they experience extreme debt or suffer a drug/gambling problem – both of which can be exacerbated by a weak economy
Opportunity – money in plain sight will be taken
Page 11 of this report further states, “Many times, retailers have very relaxed merchandise and cash controls, which can provide opportunity to an employee that, in different circumstances, would not steal…all too often these retailers do not dedicate any resources to preventing dishonest behavior.”
Yes, retail technology costs money to implement – and there are innumerous solutions from which to choose. But what is the cost of not investing in measures to prevent cash loss? What is the cost of continuing to do business the same-old way and pretending cash loss isn’t an issue?
I think we can all agree that most retailers are living on razor-thin margins and have no choice but to “get with the times” by implementing helpful retail technology. Particularly in an era when customers can shop from home.
Intelligent cash management technology can prevent cash loss. Plus, it can be integrated to work in tandem with a company’s security cameras, POS systems and even smart safes. And Tellermate offers a suite of cash management solutions – including intelligent cash drawers – that can help keep cash in a retailer’s pockets instead of the pockets of employee-thieves. How?
It’s sad but true: Retailers worldwide lose millions of dollars in cash profits each year because of employee theft. Stealing cash is potentially the perfect crime because you’ve trained employees to know the ins and outs of – and inadvertently the holes in – your cash handling processes.
Although most of your staff members don’t steal from you, one who does is one too many. And if this employee steals money, they likely steal merchandise, too. But let’s focus on cash loss and some common ways internal thieves can make your money disappear…
Building the bank is a catch-all phrase for “building up” the amount of cash in the drawer in order to steal the excess later. This is done in a number of ways:
Shortchanging a customer. This happens when a dishonest employee rings a discounted price but charges the full amount.
Coin stacking. An employee might have a smattering of loose coins near – but not in – the register. Seven pennies=seven unaccounted-for $1 bills; Five nickels=five $5 bills, and so on. This cashier might use coins or another kind of “marker,” such as paperclips, straws or even M&M’s.
Printing extra receipts. This happens when a restaurant, for example, offers a daily special. Let’s say it costs a customer $10. The first patron who pays in cash presents an opportunity for the employee to ring up this order, print the receipt along with numerous duplicate receipts. When subsequent customers pay with cash, they are given a receipt but the transaction is never entered into the register.
Excessive voids and no-sales. Either of these two should set off red flags. Perhaps real sales are being voided or the register is being opened – without a sale – several times during a shift.
Other methods of building the bank exist; but they all have at least one thing in common. The thief is storing but not recording cash intake in order to swipe it later.
Retail technology, in the form of an intelligent cash drawer system, can prevent building the bank and other forms of theft – and even honest cash-related mistakes.
Tellermate’s LiveDrawer™ solution includes the hardware: an intelligent cash drawer – LiveDrawer; as well as the software – LiveDrawer™ Manager to help you eliminate cash loss at the source. This count-by-weight solution reconciles cash in the drawer against your point of sale (POS) system in real-time – meaning you’ll get a real-time picture of the physical cash in your drawer. If a cash handling mistake occurs, or an employee pockets a $20 bill, you’ll get an instant alert allowing you to pinpoint this loss.
If a cashier places cash in the register with the intent to take it later, the system flags this discrepancy as well. In fact, it records each transaction down to the cashier, transaction time and even receipt, lane and store number. Regardless of whether you are on site or remote, you know where your cash is at all times.
The entire LiveDrawer suite can be integrated with an intelligent safe and your POS – giving you full visibility of the cash in your stores at all times and from anywhere.
Even if you think your manual, legacy cash management system works fine, think again. Chances are, your employees are savvy and could very well take advantage of old-school, lax, or even a lack of cash handling procedures. Right now. After all, you wouldn’t have hired them if you didn’t think they were smart.
Dave Lunn Bio
Since 2009, Dave Lunn has been Group Sales & Marketing Director at Tellermate, a leading provider of cash management solutions to the retail, grocery, food service and financial industries. Dave’s global experience and longevity in marketing and sales gives him extensive insight and expertise within the world of cash management.
Tellermate is a leading provider of cash management solutions to the retail, grocery, food service and financial industries, deployed across numerous Fortune 500 companies. The company is the inventor of count-by-weight technology and the intelligent cash drawer. Its technology processes over $1 billion daily across the globe. UK headquarters are home to the engineering, research & development, product and executive teams. National offices are located in Atlanta, Paris, Heidelberg, Madrid and Tokyo. Tellermate’s mission is to improve the profitability of our customers by providing next-generation end-to-end cash management solutions from innovative software to connected cash counting products.