Reducing Retail Cash Losses

According to recent University of Florida National Retail Security Surveys, losses in cash, checks, and credit card payments total about 0.024% of annual retail sales. If one considers additional forms of register tender, losses may be even higher. Reducing such losses can substantially improve retail profitability.

Fortunately, a means of effectively controlling these losses is relatively inexpensive and easy to implement: the use of modern automated systems for cash settlement and loss analysis, prompt investigation of losses and the application of appropriate personnel practices to prevent recurrence.

Adoption of any of these three elements without simultaneous use of the others may avail nothing. Precise reporting of all losses, for example, yields little if they are not investigated rigorously and appropriate action taken. It is the combination of these three elements which pays serious dividends.

To be effective, the cash settlement system needs at least the following advanced capabilities:

1. Ability to balance by media type as well as by overall register/employee
2. Ability to receive key totals by medium automatically from POS
3. Ability to be precisely configured for the payment mix normally experienced by any given retailer, including foreign currency (where appropriate), coupons, refunds, returns, vouchers, etc. (The “miscellaneous key” must become
   a thing of the past.)
4. Ability to interface automatically to sales audit functions
5. Ability to report and analyze losses by employee, register, sales day, week, month, and year, with trend analysis
   and ranking
6. Ability to attach to the latest counters and scanners to speed cash and coin reconciliation
7. Ability to be operated by in-store cash room personnel or by bank or armored carrier personnel, depending upon which approach is best for a given retailer. If not operated by the retailer, all operational and reporting features
   must be retained for the retailer use.

With such a system, management can quickly identify the precise problem, its severity, who is involved, and whether the problem is getting worse or better over time. This information can be used to investigate in a timely manner – before memories can fade. Having detailed reports permits the investigator to use the most detailed and current information available, and improves the probability of a successful investigation.

The desirable result is a conclusive investigation that will lead to recovery of the loss and to convincing those implicated in malfeasance that honesty is the best policy. While personnel policy in such matters must remain the exclusive discretion of the retailer, it is self-evident that rigorous investigation and appropriate consequences for employees identified as sources of loss will act as a deterrent to others perhaps tempted to increase their income unlawfully.

In sum, the process involves the right system to precisely identify losses, the right investigation to use the system data most effectively, and the right personnel action to discourage future losses. These three components working together will reduce cash losses progressively and surely over time.