Have you ever thought that your employees are robbing you blind? You are probably right. Theft is a huge problem in the retail environment. Studies have shown that shrinkage costs businesses more than $36 billion each year. In simple terms, dishonest employees are reaching into your pocket, via merchandise on the shelf and cash in your till, and stealing your hard earned money. It is estimated that one in four employees steals and that 50% of them are repeat offenders. Also, on average, the value of merchandise and cash taken by employees is approximately 5.5% more than that which is stolen by shoplifters.
What can you do to prevent the theft and embezzlement that may be happening right in front of you? Randall Data Systems has put together this list of BEST PRACTICES that you can begin to implement today to regain control and reduce shrinkage of inventory and cash assets.
Limit unauthorized access and entrance to your shop. Keys should be issued only to Store Managers and Security Directors. Keys should be signed for when issued, and the list must be kept up to date by noting when keys are returned. No one should enter the shop after hours without being accompanied by a manager or security employee. Consider digital keypads which can be configured with different entry codes for each specified employee. The system can track who entered the shop and when. Housekeeping should be done only when shop personnel are present.
Establish procedures for ordering and receiving merchandise. Audit these procedures regularly. Always use a purchase order to fulfill merchandise purchases. The buyer should check all merchandise received against the purchase order and the packing slip. The manager should check the purchase orders against inventory reports and approve all invoice payments.
Retail managers know that a leading indicator of possible theft and fraud is the number of times “No Sale” appears on their drawer report. Know if a particular employee is frequently performing this action and follow up on the activity.
Know your usual ratio of cash sales to credit sales. An increase on either side of the equation should trigger an investigation. Such an investigation will likely reveal indicators pointing to an increase in returns.
Know what is going on with your inventory. Conduct frequent spot checks of inventory in the various merchandise departments. Does a decrease in the inventory of a particular product correlate to increased sales of that particular item? Know which items in your store are at a higher risk for theft and locate them in a more visible area in your store.
Implement a reporting system to receive anonymous reports of theft, fraud or violations of your Code of Conduct and Ethics Policies. Promote and encourage the use of a reporting system by investigating all reports.
Counterpoint can help you accomplish many of the industry best practices for reducing theft and shrinkage through built-in controls, additional options, and reports.
Know what merchandise you are ordering and receiving. Counterpoint will generate a Purchase Request for management approval through Purchasing Advice. Upon approval, the Purchase Request can be converted to a Purchase Order which can be sent to a vendor. When you receive merchandise into inventory, you can check to ensure there are no variances between what you ordered, what the packing slip reports, and what you received. In addition, Counterpoint has the ability to alert if there are large discrepancies between the last cost and the cost you entered during receiving.
Counterpoint’s unique user I.D. log-in system allows you to track every transaction regardless of which POS station is used. Each Employee will have their own unique user I.D., so you can know who processed every voided ticket, manual credit authorization, price override, and discount. The Point of Sale Exception report and the Void History report help you track current and completed voids.
NCR Smart Alerts is a real-time notification service that allows merchants to monitor their operations. It provides timely, actionable alerts that reduce fraud, improve operations and provide better customer service. The alerts are sent to you via email or text message. Below is a list of a few of the alerts you can set:
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