The POS Software Blog

The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

CategoryCustomer Theft

Advice for small business retailers on dealing with increasing retail theft

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We know from the news that retail theft has increased. Shoplifting, stealing, retail theft, call it what o=you like, has a financial cost as well as an emotional cost. It can debilitate business owners, managers and team members, multiplying the total cost to the business.

Employee theft is easier to uncover, track and address than shopper theft.

Good POS software will offer proven tools for indicating potential employee theft and do this in a way that empowers business owners to act before the cost to the business is out of control.

The challenge is that many small business retail owners and managers do not use theft discovery and mitigation tools in POS software. We know because our Tower Systems POS software is well resourced in theft detection and mitigation and too often in talking with customers it is discovered later rather than earlier.

Our advice for retailers on employee theft is to use your software, check regularly, act on the indicators to see if there is something concerning there. In our case here at Tower systems – call or email – one of our senior theft mitigation specialists will help. These are people who have worked with the police and insurance companies on such situations. They will Bring that experience to the table for you.

Shopper theft, shoplifting, stealing of products is best discovered by a regular process of what we call spot stock takes. Choose several high interest product categories and every week check stock on hand. This will indicate if there is an issue. If there is not, choose another.

Having a consistent approach to spot stock takes if key to the discovery point of shoplifting.

The best deterrent is your action. Here is our advice to be known as a shop not worth stealing from:

  1. Greet people when they enter the shop. Them seeing you see them, eye to eye, will deter some people planning to steal.
  2. Have systems to collect evidence: CCTV and, when appropriate, matching POS software data.
  3. Always report people caught to the police.
  4. Write about reporting it to the police on social media.
  5. If you have camera evidence of theft but no knowledge of the name, use the photo to try and figure out the identity.

If the problem in your shop is serious and at a point where it is distressing you, consider bringing in a uniformed security guard for a week or two. While there is a cost with that, it makes a physical statement about your approach to the security of your space.

Complaining about theft is not action.

Catching someone and getting your goods back is inadequate action.

Not acting on a hunch because of a fear for what you might discover is not action.

Theft requires action. Typically in local small business retail it is costing the business somewhere between 3% and 5% of turnover. In our experience, retailers trend to not act because they are not sure where to start.

Here at Tower Systems we offer guidance to retail business owners on what to do, actions to take, processes to establish to at least get a handle on what might be happening. That is the best place to start if the business has not been acting consistently up to that point.

The mental health challenge of theft in local small business retail

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Beyond the money, theft in local small business retail is a mental health challenge.

There is the situation of the person stealing, the customer, the supplier, the co-owner or the employee. Often there can be mental health challenges associated with or leading up to their actions.

Then, there is the mental health challenge for the business owner(s) following the theft.

In our work with local small business retailers dealing with theft from their business, we have seen mental health affected.

we have seen retailers so affected that they quickly sell their business, opting for a lifestyle change as a result.

Theft is personal. We get that there are plenty of ‘experts’ who say theft is not personal. But in our experience, it is. Your business is like your home. Theft is a violation of your home. This why it hits hard, why it hurst so much.

When we discover theft in a retail business we are helping we suggest the owners reach out to professional services for mental health support. Advice we have found useful includes:

Be sure of the facts. How much was stolen and how it was stolen. These specific details can help you draw a line under the situation.

Do something. Take an action, or actions, to protect against a recurrence. Acting on the situation can provide confidence and strength.

Be open with others. Sharing what happened and what it has meant to you can, of itself, nurture support.

Cleanse. The theft situation may have left you with an employee or two you no longer want in the business, a supplier to drop, a customer ti disallow. Take action to shut the door.

Exercise. Plenty off mental health professionals advocate active walking outdoors as a good step for calming and clearing your mind. Find the exercise that works best for you, walking, running, swimming, and engage in that exercise. From what we read and have been told, doing this away from you’re business regularly is key.

Try to not obsess. We have seen retailers become obsessed about theft following an incident. That can be debilitating and take joy from the running of the business. Find a balance that works for you where you can be vigilant, but not obsessed.

While dealing with the practicalities of theft is important in any local small business retail setting, dealing with your own mental health is important too. Work on it. be aware. Take care of yourself. And, be in control, rather than the crime controlling you.

Advice on how to deal with theft in local retail businesses

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Theft is a scourge in retail businesses. beyond the financial cost is a considerable motional cost to those in the business from employees to owners.

We shot a brief video a few months ago in which we discussed theft in retail, leveraging our years of experience helping local retailers to reduce theft.

There are things retailers can do to protect against theft as well as to deal with it when it is discovered. This video is a peek inside what Tower Systems offers its local specialty retail POS software customers.

As retailers ourselves we draw on lived experience in providing this advice. The more we all share on this challenging topic the better for all retailers.

Here is an example of some pf the advice we have provided to retailers.

Too many retailers read advice about theft and ignore it. Indeed, the most common trigger for small business retailers to work on reducing employee theft is the discovery of such theft. Here are simple steps you can take to detect and manage employee theft:

  1. Track your stock. Receive all stock into your business through your computer system so you know exactly what sock you have.
  2. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  3. Track every sale by employees. Give your employees a card with a unique barcode or have them enter a code – to track every sale they make back to them. Change the code every six months or so.
  4. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One business where this was not done was being skimmed regularly for $200 a day.
  5. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  6. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  7. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  8. Check Gross Profit by department. If GP is falling outside what you expect, research it further.
  9. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it. See the last page of this advice.
  10. Keep the counter clean. An organised counter reduces the opportunity for theft. It makes detection easier.
  11. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  12. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  13. Beware of calculators with memories at the counter. One retail business employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  14. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  15. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  16. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  17. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping small business retailers to reduce and manage employee theft.

5 steps to cutting shopper theft in any retail business

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We are often asked for advice on reducing shopper theft in retail, because of experience advising on this in the past and because off our service as expert witnesses working with police, prosecutors, insurance companies and retailers.

We are an engages POS software company, offering services beyond the POS software itself, helping local small business retailers to reduce overheads, lift shopper theft overheads.

So, with that in mind, here are: 5 steps to cutting shopper theft in any retail business

1. Understand why shopper theft happens

Retail businesses are often targeted by thieves because they offer merchandise that is easily portable and typically not well secured. To reduce shopper theft, it’s important to understand why people steal from retail stores in the first place. Common motives include financial need, opportunity, and addiction. Understanding comes from knowing for sure what is being stolen and, as much as possible, when.

2. Improve store security

One of the best ways to reduce shopper theft is to improve store security. This can be done in a number of ways, including increasing the visibility of employees, installing surveillance cameras, and using security tags on merchandise. One good step to security is where you place often stolen items.

3. Train employees

Employees are often the first line of defence against shopper theft. By training employees to be aware of potential theft and how to prevent it, you can reduce the chances of theft occurring in your store. Training should start with transparency as to what is being stolen. This can create a goal for the team, to reduce it.

4. Use technology

There are a number of technological solutions, like POS software from Tower Systems, that can help reduce shopper theft, including retail security systems and loss prevention software. These solutions can help to deter thieves and make it easier to catch them if they do steal. It starts with understanding, and the Tower Systems POS software solution can provide this.

5. Be proactive

The best way to reduce shopper theft is to be proactive about it. This means being aware of the signs of theft and taking steps to prevent it from happening in your store. By taking these steps, you can keep your retail business safe from shopper theft.

If you follow these tips, you can cut shopper theft in your retail business and keep your store safe. Remember, the best way to reduce shopper theft is to be proactive and take steps to prevent it from happening in the first place.

While complaining can make you feel better about a situation of shopper theft, actions are what matter. Tower Systems offers its POS software customers a structured approach to reducing shopper theft. It’s part of the comprehensive site local retail POS software support services provided by the company.

Every retail business needs a theft policy

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Every retail business does need a theft policy. A good theft policy outlines what is acceptable and unacceptable. It is clear about your position on theft.

through Nour work with small business retailers across a range of channels we have developed a theft policy that we offer as a starting point for local store development of a theft policy appropriate to their needs.

We don’t hold this out as a perfect or expert document. rather, we suggest it as inspiration or as a starting point. Here it is, for your consideration:

THEFT POLICY

1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.

2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.

3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.

4. From time to time we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.

5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.

6. Cash is never to be left unattended outside the cash drawer or a safe within the business.

7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.

8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by local labour laws.

9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.

10. Employees are not permitted to provide a refund to a customer without appropriate management permission.

11. Employees are not permitted to complete sales to themselves, family members or friends.

12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

PLEASE SIGN AND DATE YOUR ACKNOWLEDGEMENT:

Retail business advice: how to reduce the impact of shoplifting in your retail business

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Theft by customers costs a typical retail business on average between .7% and 2.2% of annual product revenue. While this can vary by type of retail business, the band of .7% to 2.2% are considered a reasonable guide in costing this to the business.

Things you can do to reduce customer theft in your business …

  1. Greet customers as they enter and leave. Make eye contact.
  2. If you have a security system, have a screen on the shop floor in plain sight showing that it is on and filming.
  3. Have a notice at the door indicating that you have video surveillance.
  4. Be wary of people in bulky clothing, anyone constantly looking behind or around them, any group of shoppers, anyone distracting attention of staff members, someone looking for too long at an it or someone who is uneasy with an offer of assistance.
  5. Make a mental or written note of the description of anyone fitting patterns noted in 2.
  6. Have a policy of reporting suspicious behaviour to the most senior staff member in the shop.
  7. Consider asking the suspicious person to leave.
  8. If you are successful in catching someone, let your local newspaper know and post it on Facebook – without identifying the person.

If you suspect that theft has occurred:

  1. Immediately you are aware of a theft, call the police. Make a clear and concise report.
  2. Note down everything you can remember including date, time, description of the person(s) involved, what they looked at, your notes about seeing them entering, what they looked at, what they took and that they left without paying. Get all staff involved to make noted without referring to each other.
  3. If you are comfortable, considerer approaching the person (only after point 1) and saying you think they may have an item they did not pay for. Invite them back to the shop to resolve the matter. If you decide to do this: approach them from the front in a non-threatening way, do not touch them, say something like: Excuse me, I’m with newsXpress XXX, could I speak to you about the merchandise in your coat/purse/bag? Would you please accompany me back into the store? If they run, don’t chase them.
  4. If they accompany you back to the store, invite them to show you their bag, coat, purse or anything where your goods could be hidden. If it looks like you made a mistake, apologise and let them go. If the goods are found ask what they would like to do about it. If the goods are not found and you remain suspicious, ask them to wait for the police.

If the person left the store with no opportunity for you to speak to them, consider carefully what you may do with any video footage or photos. While the law varies state to state, police and lawyers advise retailers against publishing photos of videos, especially if there is an accusation that the person identified committed a crime. Such publishing could be used to have the case withdrawn. When you speak with your local police, ask their advice on this.

5 steps guaranteed to cut theft in any retail business

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Theft in retail costs more than money or goods taken. There is an emotional cost, which can play into an impact on business management.

In our work with thousands of independent retail businesses we have tuned a list of actions that we see work well in cutting theft in retail.

  1. Spot stock take. Allocate time daily to spot check stock on hand. We suggest 15 to 20 minutes a day to different areas of the shop could reveal customer theft challenges. Spot stock takes are fast, easy and guide data accuracy. Most important, they reveal theft.
  2. Track everything you sell. The moment a retailer does not track stock that comes in and goes out of a business is the moment the retailer takes their eye off the ball and allow people who till steal to steal. While it sounds boring, managing stock is key early identification of theft, especially employee theft.
  3. Eliminate manual handling of data. Every time data is handled manually you create a weakness that a thief can exploit. For example, if sales data do not flow automatically from your POS to your accounting software, there can be an opportunity for someone handling cash to skim prior to banking. From receiving inventory invoices electronically to scanning everything you sell to a direct connection between your POS and your accounting software, like Xero, every keystroke eliminated is potential theft avoided.
  4. Look under the hood at keystroke patterns. Smart POS software will maintain, in a secret location and under appropriate security data that could reveal misbehaviour by staff as part of a systematic theft program. This type of analysis has uncovered the deletion of sales to enable the removal of cash from a til by an employee stealing from the business.
  5. Surprise moves like roster changes, spot checks in-store, mid-day cash-outs and more can break a pattern and make it difficult for anyone who seeks to leverage a consistent pattern to engage in theft. We know of one case where the rubbing bins were emptied an hour earlier than usual and by someone who does not usually do this work and in doing so a roll of notes was found, which led to long-term theft discovery.

Theft hurts retail businesses in many ways. Independent retailers can cut the cost of theft by following steps like those outlined here.

Tower Systems works with small business retailers using its POS software to help them cut employee and customer theft. We have provided expert help to police and prosecutors. We have people in our business who have been used as expert witnesses in court cases.

We are committed to helping small business retailers cut employee and customer theft. Every Tower customer has access to a free theft check service.

POS software from Tower Systems helps small business retailers cut theft

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The Age newspaper last week reported on a surge in theft.

A study of over 9000 Australian and New Zealand retailers has revealed the cost of theft in-store has now reached a “crisis point” for companies as shoplifters have become more brazen in recent years.

While the report focusses on shoplifting, in my experience working eityh retailers, employee theft has a higher cost. This paragraph is telling…

The majority of respondents were large fashion, grocery and department retailers with 300 or more stores. For the 2018 financial year, those companies estimated crime-related losses of $3.37 billion, or 0.92 per cent of the region’s total retail revenue for the year.

The average cost of theft in small to medium business is 3% and more. This, considering the .92% noted above indicates the focus of the report is narrow. But then the report goes on to say employee theft was 22% of overall theft.

Maybe the disconnect is because the report pulled data from medium to large businesses whereas all data I have seen over the years has been from small businesses, single store businesses. In those, in my experience, employee theft costs around 70% of the total cost of theft.

Regardless of this latest report, theft is retail is a high cost for which retailers, customers and others in the supply chain pay.

Read the report. It’s got useful information for any retailer.

Our POS software company helps small business retailers cut the cost of theft. We have proven facilities in the software that achieve this. Better still, we back these facilities with experts who can make a real and positive difference in theft outcomes for small business retailers.

Advice for small business retailers on theft

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Most theft from independent retail businesses can be identified and reduced through a consistent application of simple management processes and smart use of specialist retail software. Tower Systems has been helping retailers cut theft for decades through issuing advice, responding to requests and by continuing to provide functions in our retail software that allow business owners to identify and track suspicious behaviour – by shoppers, managers and store employees. Over the years our expertise has been called on by police and prosecutors as well as individual retailers.

Follow this advice on how to use our specialist retail POS software to hamper opportunities for theft and bolster the certainty of detecting it before it’s too late:

  1. Employ stock control for high volume items. Enter new stock as it comes in, scan all sales and only reorder based on what the software says. Perform a stock take regularly each month. High volume item stock discrepancies are an indicator of theft.
  2. Scan everything you sell. Do not use department tracking only – your data needs to be granular to prevent employees taking advantage of loose stock on hand quantities. Not scanning individual stock items is unfortunately an invitation to dishonest employees.
  3. Use the software-based end of shift procedure and have a zero-tolerance policy on cash balance discrepancies. Reconcile banking to your computer software at end of shift. We have seen businesses failing to do this: one was being skimmed regularly of $200 a day.
  4. Do spot cash balancing. Unexpected checks can uncover surprises. One business owner needing to perform banking during the day uncovered a $350 discrepancy that lead to the discovery of systematic theft.
  5. Mix up your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  6. Check your audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Our software tracks cancelled sales and what was in them. This can be matched with video footage.
  7. Check GP by department. If GP is falling outside what you expect, always research further.
  8. Publish a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it. At the bottom of this page is a sample theft policy.
  9. Keep the store counter area clean. A better organised counter reduces the opportunity for theft. Reducing nooks and crannies makes detection of any cash hoarding easier.
  10. Have a “no employee bags” at the counter policy. This makes it harder for dishonest employees to hide stolen cash.
  11. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  12. Beware of calculators and mobile phones at the counter. Employees can use these devices to track how much cash could be stolen prior to balancing for the day – cash from sales not processed.
  13. Do not let employees sell to themselves. If an employee wants to purchase something ensure they purchase it from the customer’s side of the counter.
  14. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high. Do not take cash handling lightly; if you respect your business procedures your staff are more likely to too. Never take cash from the till for your own personal use, i.e. to buy lunch.
  15. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.

These steps work. They are based on decades of helping small business retailers to reduce and manage employee theft.

Employee and customer theft costs a typical independent retail business between 3% and 5% of non-agency sales revenue each year. Management attention and smart use of retail software can cut this dramatically. It does not take much time – it is simply about smart procedures and professional processes.

IT’S A FACT: THEFT IS GREATER IN RETAIL BUSINESSES WHERE STOCK CONTROL IS POOR

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In years working with small and independent retail businesses, the team at Tower Systems has learnt plenty including the indicators of in which retail businesses theft is more likely to occur.

We have leveraged our experience with small business retailers who use our smart POS software to help these and other b businesses reduce the impact of theft – shopper theft and employee theft.

Our experience is that theft is more likely to occur in businesses where stock is not managed properly.

By not managed properly we mean where:

  1. All items sold are not tracked at the point of sale.
  2. Where new stock arriving in the business is not properly arrived through the software.
  3. Where spot stock-takes are not undertaken regularly to maintain an accurate stock on hand account.
  4. Where stock given away or thrown away is not written off.
  5. Where stock returned to a supplier is not scanned out.

Our advice on reducing the cost of employee theft and customer theft is simple – follow our advice, manage your stock and without a doubt the cost of theft in your retail business will be lower than it would have been.

If you think the cost of managing stock is too great, think about the cost of $25,000, $50,000 or even $250,000 in theft. Yes, we see this all too often in retail businesses – where stock is not managed.

Managing your stock = less theft and less theft = increases product and increased profit = you get more when you sell your business.

Tower Systems offers comprehensive theft mitigation services to small business retailers. We use our knowledge and experience to help retailers, to make it easier for them to understand any given situation and take steps to protect against theft. This is a free project from us, pro-bono help for small business retailers as part of the Tower Systems community care service.

Inventory is the best indicator of a problem. We leverage this data. We help retailers see and understand the challenges and we provide knowledge and tools that benefit retailers no matter what type of business they operate. This is another Tower Advantage, something we are proud to offer.

Data security advice for small business retailers using POS software

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2018 is not even half over and already it has seen considerable attacks on computers and on websites. Each attack reinforces the need for all businesses, including small businesses, to have appropriate security and backup measured in place to protect business data.

Appropriate backup means:

  1. Backup every day, without fail, without having too spend time for we know that time backups can take can make backups be ignored or forgotten.
  2. On-site backup.
  3. Plus, off-site backup.
  4. Easy access for recovery.
  5. Protection in a facility away from the business not only of all data but all software to facilitate swift recovery.
  6. Managed costs.
  7. Secure access to backed up data.
  8. maintaining backup services at the cutting edge.
  9. Appropriate security for backed up data.

Our advice is that you use a cloud backup service, like the Tower Backup service we offer. It works in the background, backing up without you having to do a backup. If your business is attacked, getting back to a clean and safe place is easy. Any reputable backup service should be able to offer similar to you.

Please do not put this off. Get protection for your business and your business data. You don’t want to be the person who does this after you have been attacked.

At the very least, backup every day, onto a USB stick for that day. While this is an old-school approach, it is better than nothing at all.

But let’s be clear, cloud backup is our recommendation. Our service provides you with a local backup and an offsite backup, in the cloud. This gives you two backups, excellent protection. We monitor the backups to ensure they are working. If we find an issue, we proactively call you. This is rare from a cloud backup service provider.

Here at Tower Systems we take data security seriously. We provide best-pracie advice. Our customers are welcome to use our service or another, our recommendation, however, is that they do something – to be protected.

Too often small business retailers think about data security after they have been affected. Hence this advice here and in our weekly emails and elsewhere in our touch points with customers.

Small business POS software customers appreciate THEFT POLICY

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A week ago we shared with our customers an updated THEFT POLICY, and suggested they print this and seek employee engagement.

The reaction has been terrific with plenty downloading and pricing the policy. We have had calls, too, from retailers seeking our suggestions on other actions they can take. Some have called with their stories of theft in their businesses.

Our work in the area of retail employee theft is comprehensive and on-going.

We welcome opportunities to work with our thousands of small business retailer customers to help them mitigate the theft situation in their businesses.

Here is the latest version of our THEFT POLICY that we shared a week ago:

THEFT POLICY

  1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.
  2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.
  3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.
  4. From time to time we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.
  5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.
  6. Cash is never to be left unattended outside the cash drawer or a safe within the business.
  7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.
  8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by local labour laws.
  9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.
  10. Employees are not permitted to provide a refund to a customer without appropriate management permission.
  11. Employees are not permitted to complete sales to themselves, family members or friends.
  12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

PLEASE SIGN AND DATE YOUR ACKNOWLEDGEMENT:

A theft policy is vital to helping any retail business cut the cost of employee theft

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Here at Tower Systems we often help small business retailers detect and stop employee theft. One piece of advice that we see as vital to this mission is for a business to have a THEFT POLICY.

Here is a policy we share with our customers. Feel free to use it, modify it and share it.

THEFT POLICY

  1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.
  2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.
  3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.
  4. From time to time we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.
  5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.
  6. Cash is never to be left unattended outside the cash drawer or a safe within the business.
  7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.
  8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by local labour laws.
  9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.
  10. Employees are not permitted to provide a refund to a customer without appropriate management permission.
  11. Employees are not permitted to complete sales to themselves, family members or friends.
  12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

PLEASE SIGN AND DATE YOUR ACKNOWLEDGEMENT:

Yes, you can cut the cost of theft in any retail business. It starts with the right policies and processes.

Advice for small business retailers on managing shopper theft

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The importance of accurate stock on hand data is  critical, especially for retailers with online sales.

We recommend regular custom stock takes for the categories where you transact online.

A consequence of more regular stock takes is greater understanding of theft from the business. Rather than getting angry about discovering the extent of theft, which a lot of retailers do, act to manage theft. This is the best reaction you can have to theft of stock.

  1. Know the problem. Regular custom stock takes will help you achieve this.
  2. Own the problem. Based on evidence, take the problem on board as yours to fix.

Too often, retailers sit in the office or the back room. Problems like this are not fixed from the back room – they are fixed from the shop floor.

Too often work is done in the back room or away from customer sight that could be done on the shop floor and thereby reduce shopper theft. The more work you do on the shop floor the greater deterrent to those who would steal.

  1. Ensure all staff know about the problem. The more they understand the problem the better the opportunity for them to become engaged. Understanding must include knowing the cost to the business and the impact this has on the business and on them.
  2. Encourage staff to greet shoppers, explain this is a starting point to reducing theft.
  3. Spot (custom) stock take weekly or at least fortnightly. Record the number stolen from a category somewhere for staff to see. This sets a target for all.
  4. Move the product you are concerned about, try different locations.
  5. Place a portable work table near the often stolen products and move most there such as product pricing, invoice checking or other tasks that could be easily done on the shop floor.
  6. Ensure you have camera coverage of the location.
  7. Place the stock so there are no blind spots that make theft easy.
  8. Watch the location or stand from outside your business to see how shoppers interact with it.
  9. Bring in a retail security expert for their advice on your specific situation.
  10. Keep your staff informed about progress on resolving the problem.

The only way to reduce theft is to change things. If what you change does not work, change more. Keep changing until you find the answer.

Note: those often stealing the most are not those you suspect.

Helping small business retailers reduce customer theft

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Customers of retail businesses steal. Not all of them, not even 10% of them. But those who steal can cost the business a lot of money and time.

Customer theft in retail is something to be managed, for the protection and benefit of the business.

Managing customer theft is important for any retail business. Not only does it save cash for the business but it also helps you improve your management of stock.

Knowing what is being stolen and how often is the important first step.

The best way to know the cost of theft is through regular spot stock takes. Good point of sale software can help you do this in a fraction of time that a manual stock take would take.

Other ways smart Point of Sale software can help you cut the cost of customer theft are:

  1. Scanning what you sell. It can be surprising what you discover when you handle items being purchased by customers – some items fall out or you find that barcodes have been moved. Touching stock at the sales counter can provide a valuable check for the business.
  2. Blocking fraudulent refund requests. It is each to check when an item was sold and thereby catch out anyone wanting a refund or a credit for something they did not buy and for which they do not have a receipt.
  3. Stopping unwarranted discounts. Good POS software will block discounts which are outside the rules you establish for the business.
  4. Seeing theft live. If you have items which are regularly returned to suppliers, POS software can let you know what you should have in stock and this allows you to quickly check against your real situation.
  5. Tracking everything that moves. Scanning everything you sell lets you know what you should have in stock at any point in time. This makes checking movements easy and helps your staff become more vigilant against theft.
  6. Spot stock takes. In a few minutes you can could a section of the shop, upload this to your system and get a report of real stock counts versus what should be there. Knowing the areas which are being hit can help a business better focus resources.

The keys to cutting customer theft are to understand what is happening and to have strong processes in place to reduce this. Once you, your employees and your customers understand zero tolerance, theft will fall.

Tower Systems offers small business retailers a range of advice, support and POS software facilities to reduce the cost of theft in retail.

Sunday retail management advice: how to cut employee theft in retail

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Theft is something to be managed in your business. You will be stolen from. Good management is about reducing the opportunity for and instances of theft.

Follow this advice and the opportunity for theft will be lower and the certainty of detecting it higher.

Unfortunately, many retailers read up to here and think this will to happen to them.  Too many of these business owners are the ones who do experience the hurt of employee theft.

If you are still reading, well done. Here are simple steps you can take to catch and manage employee theft:

  1. Use stock control for a high volume high interest category (if not all stock). Enter new stock as it comes in, scan all sales and only reorder based on what you software says. Every month do a stock take. Stock discrepancies of the right item are an indicator of theft. Had one retailer we know of been doing this they would have caught their $250 a day employee theft months earlier.
  2. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  3. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One retail business where this was not done was being skimmed regularly for $200 a day.
  4. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  5. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  6. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  7. Check GP by department. If GP is falling outside what you expect, research it further.
  8. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it. See the last page of this advice.
  9. Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
  10. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  11. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  12. Beware of calculators with memories at the counter. One employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  13. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  14. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  15. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  16. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping newsagents to reduce and manage employee theft.

Theft, employee and customer, costs a typical retail between 3% and 5% of sales revenue. Management attention can cut this dramatically. It does not take much time. No, it is more about having professional processes in place which everyone in the business follows.

The POS Software Blog

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