Retail theft, both by employees and customers, can significantly impact small businesses, leading to substantial financial and emotional costs. While it may seem daunting, proactive measures and the strategic use of retail software can significantly reduce the risk.

The Impact of retail theft

A typical independent retail business can lose between 3% and 5% of its non-agency sales revenue annually due to theft. This loss, often overlooked, can erode profits and hinder growth.

We helped one retailer deal with employee theft that had gone unchecked and had cost the business several hundred thousand dollars. This theft could have been caught early had the retailers followed our advice.

Mitigating the risk

Tower Systems, through our POS software and allied retail management advice, has been assisting businesses in combating theft for decades. By implementing a combination of sound management practices and leveraging advanced software features, retailers can significantly reduce their exposure to theft.

Key strategies to prevent and detect theft:

1. Robust stock control:
   • Regularly conduct stock takes.
   • Utilise barcode scanning for all items.
   • Implement a rigorous stock control system to track inventory levels.
2. Strict cash handling procedures:
   • Enforce a zero-tolerance policy for cash balance discrepancies.
   • Conduct surprise cash counts and audits.
   • Reconcile bank deposits daily.
3. Employee monitoring and management:
   • Implement a strict employee code of conduct.
   • Conduct regular performance reviews and disciplinary actions.
   • Monitor employee activity through security cameras and software logs.
   • Rotate staff duties to minimize opportunities for collusion.
4. Leverage retail software:
   • Utilise point-of-sale (POS) software to track sales, inventory, and employee activity.
   • Implement advanced security features, such as user access controls and audit trails.
   • Analyse sales data to identify trends and potential anomalies.

Additional tips:

• Create a strong company culture: Foster a positive and professional work environment.
• Train employees: Educate staff on theft prevention and detection techniques.
• Secure your store: Invest in security systems, such as alarms and surveillance cameras.
• Be vigilant: Pay close attention to customer and employee behaviour.
• Consider transparency: It could be that by sharing details on the performance of the business you deter someone from thinking it’s okay to steal.

Now, if you like a ToDo list, here are 12 steps that if followed will cut employee theft in any retail business:

1. Scan everything you sell.
2. Spot stock take items in high demand.
3. Use your POS software to balance at the end of shift every day.
4. Have a security camera over each register.
5. Check GP by department. If GP is falling outside what you expect, research it further.
6. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
7. 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.
8. 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.
9. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that leads to discovery of systematic theft.
10. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
11. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
12. Be professional in your management of the business. The more professional your approach the less likely your employees will steal as they will see the risk of being caught as high.

By adopting what we have suggested here and leveraging the power of retail software, small business owners can significantly reduce the risk of theft and protect their bottom line.

Cutting the cost of theft in your shop starts with tight management practices in the business and the consistent application of these. POS software is at the heart of this. Tower Systems has open and hidden theft mitigation tools in the software.

If you think theft may be an issue in your software, call our help desk team for a confidential discussion.

FOR MORE:

• Theft policy.
• How to use POS software to cut theft in your small business.