Have you had a worker cheating the time clock, taking a brick of cheese from cold storage, manipulating coupons for unauthorized discounts, or even skimming money straight from the till? It happens to all business owners.
The 2014 U.S. Retail Fraud Survey reported that employee theft accounted for 38 percent of total shrinkage. And restaurant industry experts estimate losses from employee theft at 1 percent of revenue.
Dishonest retail store employees often give free or discounted merchandise to friends and family, a practice called "sweet-hearting." It's done by canceling transactions at the POS terminal, something that's fairly easy to accomplish and often difficult for managers to detect.
Restaurants without strong inventory tracking, order transaction controls, or cash drawer checks and balances can find significant shrinkage of both cash and product.
But you don't have to fall prey to these dishonest practices. Your POS system includes reports that will help managers and owners pinpoint theft and reduce losses.
Here are four employee theft reports every business owner should be getting from their POS solution.
1. Stop time clock abuse and buddy punching
You want to pay employees for time spent working, but they may have other ideas. Buddy punchers - employees who clock others in before arrival or after departure from work - can be hard to stop.
But your POS solution allows you to set clock-in and clock-out controls using a built-in time clock. You can also use tracking options to control meal and break times, and require a manager's override to authorize overtime.
Each day you'll want to review the report showing time clock edits as compared to the original schedule information. See exactly who made the changes and when, and your detective work is done.
2. Keep an eye on inventory variance
Restaurant employees working the bar or counter may make large sales but ring up smaller orders or even none at all, a practice called under-ringing. Or they may be giving out free food and drinks to friends and relatives.
You can stop both these practices by keeping an eye on the inventory variance report in your POS solution. Actual usage will show as higher than your ideal usage, since food or beverages were used but not recorded as sales. And when you see variance issues, managers can spot check suspicious items during the day, or make a count after a shift is over.
3. Secure cash drawers from employee theft
A good POS solution allows you to set up cash drawers and bank floats based on your specific banking procedures. Then as sales activity is tracked throughout the day, POS software will show exactly how much money should be in the registers at any time. You can also restrict access to cash drawers and make staff accountable for their own till.
Check the bank account report for details on when and why each drawer or bank was opened. You'll see the reasons employees provided, helping spot trends or misuse.
4. Prevent ticket edits with POS reporting
Clued-in workers know editing an order ticket gives them an opportunity to pocket money from the till. Examples include operations like change downs, discounts after save, and voids after close.
During a change down, a customer orders and pays with cash. The employee then edits down to a lower priced item and skims off the extra. A discount after save means a worker applies a coupon or discount after the ticket is closed, keeping the discounted amount. And with voids after close, a cashier voids the sale and steals the entire amount.
But these practices are easily prevented by reviewing the notable activity report in your POS as part of closing each night. Listed on the report are all voids, discounts after save, and change downs, along with the person who made the change. By letting employees know you're tracking these changes, you'll keep most people honest.
Are you taking advantage of all the ways your POS solution can stop dishonest staff from stealing time, food, or cash?
What theft reports are most useful for your business?