Employee theft can kill a retail business if left undetected for too long.  In addition to excellent theft reduction and theft management facilities in our Point of Sale software, Tower Systems also offers a theft analysis service to its retailer customers.

Theft Check, as the free service is called, involved thorough analysis of critical business data, looking for patterns of behaviour, as indicated in the data, which could be evidence of employee theft.  Access to theft check is provide as part of the Tower Advantage ^TM customer support and service program.

All we need is access to a current data backup and we do the rest.   We look at the data from the perspective of successfully uncovering theft in more than one hundred retail businesses.  From a few hundred dollars to well over one hundred thousand dollars.  We are able to identify behaviour which is at best poor retail practice and at worst blatant theft from the business.

Our experience is that retailers are complacent about theft because of a belief in their people, denial that it could happen to them and fear that it is happening to them.  We have been guilty of this ourselves in our own retail businesses.

Our years of experience in working with retailers on employee theft, across a variety of retail channels, has allowed us to develop skills which are now helping others cut the cost of employee theft.

FOOTNOTE: This is not the first time we have written about this service and it will not be the last.  Each time we do write about it more retailers contact us. Our singular goal is to cut the cost of theft in retail businesses using our Point of Sale software.

Employee theft accounts for around two thirds of all theft in a retail business based on data we have seen. Overall theft accounts for anything between three and five percent of retail sales - based on publicly available industry data.  Tower Systems helps retailers cut employee theft thanks to some excellent theft management tools in our software. 

We also help cut employee theft thanks to our FREE theft check service.  We review your business data and look for patters of behaviour which indicate that theft may be active.  The results of our research can provide you peace of mind, guide further investigation or be used by police in taking prosecution action.

Our pro bono work on tracking and cutting employee theft has saved some of our customers tens of thousands of dollars.  This is the Tower Advantage ^TM in action, putting money in the pocket of our customers without us putting our hands out asking for money to do this.

Retailers without a theft management strategy are at considerable risk in their businesses.  The theft tracking and reduction tools in our Tower Systems Point of Sale software can play a key role in any professional theft management program.

We have packaged our theft reduction and management advice into a one hour business management presentation and offer this to our customers and others who can bring together a group of retailers keen to work on reducing the cost of theft.

Our Point of Sale software can help retailers protect against customer fraud.  Using our software, our retail customers are able to better protect against common fraud conducted at the counter by skilled criminals.

Here are just some of the ways our software is helping retailers reduce the cost of customer fraud.

1. Receipt checking.  By scanning a receipt, a past sale is immediately brought up for verification before a refund is considered.
2. Refund management.  Thanks to clever search tools, retail employees are able to verify when an item was sold – in case a receipt is not returned with the goods.
3. Checking change.  Users can setup the system to require that receipts always show change.
4. Security controls.  Sophisticated security facilities within our software deny employees the ability to process a refund unless they have been explicitly granted security clearance.
5. Eftpos integration.  Using the integrated Tyro broadband eftpos solution, a processing step is eliminated, meaning an opportunity for fraud is eliminated.

The most important way to protect against customer fraud is to have well defined and understood operational processes at the retail sales counter.  These processes can be better managed and driven thanks to facilities in our Point of Sale software.

Retail businesses hit by customer fraud tend to have a lazy approach to managing the sales counter, inviting financial harm to the business.

Customers steal from retail businesses. Not every customer but enough to create cost the business considerably. Total retail theft is between 2% and 5% in retail businesses around the world. Customer theft is usually around half of this.

Retailers can cut customer theft by following six simple rules:

1. Acknowledge people when they enter. If people know that you have seen them, they are less likely to take the risk of stealing.
2. Work the shop floor. This increases the chances of seeing suspicious behavior. If they think there is a rick of getting caught they will move on.
3. Strict policy on refunds - if you can’t prove it refuse the refund. One way people steal is to take the item and return it for a cash refund. Businesses which permit this without receipts or at least a management process open themselves to this fraud.
4. Check change. There are many skilled scammers who talk with retail employees while change is being given. This can confuse and lead to too much change being given.
5. Show. Show shoppers that you are video taping them. Do this with a screen at or near the entrance. The more people feel they will be caught the less likely they are to steal from you.
6. Understand.  Know what is being stolen by using your Point of Sale technology.  This will help you make decisions which reduce the cost of theft.

Customers steal because they can. Retailers who take a professional and consistent approach to reducing theft are more likely to experience reduced theft.

We know a bit about this area because of work we have done helping retailers resolve theft issues. Our people have been used as an expert witness in several court cases and have assisted police in multiple jurisdictions to catch customers stealing.

Take your time to assess the business and the risks it presents. Develop a plan and bring your key employees in on the plan. Follow the plan and measure results.

We have seen the cost of customer theft halved in three months by a retail business following a well constructed plan.

Our offer to help retailers research and address theft in retail is being taken up by many.  From reviewing activity files for patterns which may indicate theft to providing expert witness statements to professional investigators, we help our retail customers address the challenge of retail theft.

There has been a surge in the use of our theft related services this year, in the last quarter especially.

The ideal situation is the blocking of theft.  Our Point of Sale software provides excellent tools for achieving this.  Unfortunately, no matter what barriers are in place, an employee or customer desperate to steal will find a way which they think is undetected.

One challenge is in ensuring that we are providing advice to the right person.  We have been approached by people representing themselves as business owners seeking advice to get into the secure area of our POS software to change what could be important evidence.  This is one reason we do not publish here or elsewhere greater detail about the theft management facilities in our software.

Sooner or later, theft in retail is discovered.  Our commitment to our customers is to do everything possible to lead to early detection and a certain outcome for the business.

We were recently asked to write an article about how retailers can cut theft using good Point of Sale software because of the considerable work we have done in this area helping customers, the police and insurance companies.  We though the atricle may also interest readers of this blog…

Cutting employee theft and customer theft in your retail business starts with commitment from the business owners and managers to this goal.

Too often, retailers accept that a certain level of theft will occur and think that it is not as bad in their store as it is in others.

Here are three steps for cutting the cost of theft in any retail business.

Step one: understand the problem.

The first step to dealing with theft, by employees or customers, is to understand the value of theft.

You can understand the value of most customer theft by undertaking either a full business stock take or spot stock takes. The stock your Point of Sale system thinks should be on hand compared to what is on hand reflects the value of stock theft, usually by customers. Good POS software offers stock take facilities designed to track theft.

Understanding the value of employee theft is more difficult since it can involve cash not even put through the computer system.

Step two: get serious about business processes.

Theft occurs usually because of weak business processes. Strengthen a few of your business processes and you dramatically cut the cost of theft.

Sales. Have every sale tracked by an employee code. This brings discipline to the sales process.

Refunds. Only allow a manager to do these.

Deleting sales. Ensure that only the most senior people in the retail business have permission through the POS software to do this.

Discounting. Setup rules in your POS software on the volume of discounting which is permitted.

Cash balancing. Establish rules for end of shift cash balancing. Make all sales employees accountable to a zero tolerance target.

Use security reporting tools. Good POS software will take you behind the scenes in the business and report on concerning behaviour such as selling items below cost, cancelling sales, deleting sales or adjusting customer account balances. These are all indicators of employee fraud.

Step three: act on evidence.

Thanks to reporting from your Point of sale software you ought to gain a good understanding of the scope of theft in your retail business. Embrace this information for the benefit of the business and all who rely on it, make decisions.

If stock is being stolen off the shop floor, understand which stock is affected and either increase security or move the stock to a better location. The more likely someone stealing feels they could be caught the lower the chance they will actually steal from the business.

If employees are taking even small amounts of cash from the business, act immediately within the law to protect the business. This removes the problem from the business and it sends a message to others in the business that you will act on evidence of theft.

Use your Point of Sale software to its fullest to help cut the cost of theft in your business. Imagine how much better off the business would be with an additional three percentage points of net profit. That is your motivator - a healthier profit for the business and therefore a more sustainable business.

Cutting employee and customer theft can be achieved. Us your Point of Sale system to understand the problem and then help manage it.

Retail employees considering stealing from their employer weigh up the prospects of getting caught. If they see the business using theft management tools and other facilities in their Point of Sale software to track and cut theft then they are less likely to take the risk.

Unfortunately, for many retailers, the use of theft management tools in our retail management software only seriously starts once the business has experienced major theft.

This is why offer regular training in theft management, cover it in our newsletters and speak about it at our user meetings around the country. It is frustrating to know that retailers have access to tools which could add between 2% and 5% to their bottom line and that they will not use these tools until they suffer a considerable financial loss.

By professional and committed use of our theft management tools, retailers will cut theft – without a doubt. The theft reduction benefits alone will generate sufficient benefit in the first year of installing our system to entirely pay for it.

To protect our customers, however, we don’t talk too publicly about the specifics of theft management. Training in the tools is undertaken with confidentiality – so that the business owner has the upper hand.

Employee theft is a risk in every retail business. By treating it seriously and using the facilities like those in our Point of Sale software, retailers can expect to cut the cost of theft and achieve a healthier bottom line for the business.

If theft is discovered, we also have tools which help gather evidence for the police – we’ve done this plenty of times and will gladly help any of our customers in this situation. However, being forewarned and forearmed could avoid the need to react after the event.

Over the years we have developed considerable expertise in helping retailers cut employee theft.  We package and offer theft management advice in our online training, advice sheets and other forums.  Here are ten recommendations for cutting employee theft in just about any retail business:

• Prepare a written theft management policy and post this in a public area of the back room of the business for all employees to see.
• Use Point of Sale software which offers strong theft management tools.
• Only employ people prepared to undergo a police check.
• Install a security camera system connected with your Point of Sale software.
• Review the security footage and other business data to look for theft occurrences.
• Enforce zero tolerance for abuse of systems. For example, ensure that every item sold at the sales counter is scanned. Good software will show if this is being done.
• Implement zero tolerance for an end of shift discrepancy when balancing the takings of the business. A $5.00 outage should be the maximum allowed.
• Remove the ability to delete sales from the computer system.
• Remove the opportunity to cancel sales - this is a common technique used by employees stealing as it can be used to trick customers that the sale has gone through.
• Change responsibilities - sometimes changing who handles money can uncover fraudulent behaviour.
• Change your timing. Habits are what allow people to think they can get away with theft.

A recent survey found that 40% of business owners who thought themselves to be theft free, actually had theft occur in their business within a 12 month period prior to survey. Of theft that is recognised, only 2.5% of it is witnessed, the rest only established by audit.Smart computer technology can witness theft better than humans. It can use pattern matching techniques to uncover hitherto undiscovered theft behaviour by employees and deliver evidence which authorities can use to achieve successful prosecution.

Employee theft can be cut in any retail business. All it takes is employer and management commitment and a dedication to maintaining strong business rules.

Following these simple steps will help retailers reduce the opportunity for and incidence of employee theft.

1. Track sales by employees. Use the Point of Sale software to require employee codes to be entered or employee cards to be scanned for every sale.
2. Encourage eftpos transactions. The less cash you handle the lower the opportunity for fraud.
3. Track odd behaviour. Cancelled sales, opening the cash drawer, deleting sales – these are all things you can stop or better control using your Point of Sale software. The tighter the rules the less wriggle room available for people to abuse the business.
4. Require change given to be entered. This enhances structure at the sales counter and this shows the business respects operational rules.
5. Set rules on discounts. Use the software to manage business rules on who can process discounts.
6. Balance the register.  Set a limit of what is an acceptable under or over amount for the end of shift processing.  Require employees to be accountable.  The tougher you manage this the more responsibility people take on to ensure that there are no mistakes.

Creating and adhering to structure around cash handling processes is crucial.  Employees who want / need to steal will have less opportunity if you take the steps outlined above.  Good Point of Sale software like that from Tower Systems is your best friend in helping you cut the cost of employee theft.

We are often asked for advice on how to cut employee theft in retail – because of the theft management in our Point of Sale software and the work we have done with police and other investigators in several states on this issue.

To help retailers cut the cost of employee theft we created some guidelines which we have found useful. These are shared at various training forums and workshops in which we participate. We felt they would be useful to the broader audience here.

Employees can steal from retail businesses in a variety of ways. Often, such theft goes undetected because of poor or unmonitored business processes.
The best way to cut employee theft or fraud is to commit to a consistent approach to theft management:

• Ask prospective employees if they object to a police check. Those with something to hide will let you know they have found a job elsewhere.
• Implement zero tolerance for abuse of systems. For example, ensure that every item sold is scanned.
• Implement zero tolerance for an end of shift discrepancy of, say, $5.00 or more. Once employees know you will be fierce about this sales will be more accurate.
• Reduce manual eftpos transactions – connect your eftpos terminal to your point of sale.
• Change responsibilities – sometimes changing who handles money can uncover fraudulent behavior.
• Change your timing. Habits are what allow people to think they can get away with theft.
• Modify your counter policies:No refunds;  No credits without management approval;  No employee bags at the counter;  No jackets or cardigans with pockets;  No calculators with memories – I have seen these used to record how much cash in the register is theirs.
• Track every sale by employees – using a card with an employee barcode and making it harder for an employee to use the system as someone else.
• Track all cash movements from the sale through to your bank account. Many retailers do not do this and open themselves to blatant and regular theft.
• Employees do it because they know they can get away with it.

Employees do it because they know they can get away with it

Cutting employee theft can be achieved with vigilance. A small time investment in developing and following processes will find you with more money in your bank account.

A convenience store group with 150 locations has just selected Tower Systems as an IT supplier for its retail outlets.

Tower Systems Point of Sale software will go into more convenience store locations and further strengthen our position in this marketplace as a result of this new deal.

The synergy between convenience store and our newsagency marketplace is considerable and each will benefit from our work with the other.

We are grateful for the opportunity to help another group strengthen the independent businesses which make up their network.

With hundreds of users of our Point of Sale software now processing eftpos transactions through the Tyro broadband eftpos interface, we are building excellent data on the business benefits.

Tyro is saving our retail users, including our own retail businesses, time and money with a faster and mroe secure solution.  Since our software communicates directly with the EFTPOS terminal, we reduce internal fraud and errors.

Here are the key benefits our customers tell us about:

• Speed and efficiency (transaction time less than 4 seconds)
• Lower costs (no phone line, no admin fees, free paper rolls)
• Low integration set up costs
• Low merchant service fees negotiated by Tower Systems
• Reduced internal and shop front fraud
• Secure, real-time online reporting

The Tower Systems / Tyro integration offers improved efficiency and accuracy - as we are seeing ourselves in our own retail businesses.  Yes, we used this ourselves to prove its worth first.

Theft in retail businesses often relies on regular work and operational patterns being followed: the banking being done at the same time, the refund policy being lax when managed by some staff, checking the cash banked back to takings being lax, the bins always being empties by the same person and so on.

By regularly changing processes, a business can make theft harder to perpetrate.

I know of a retail business which uncovered employee theft by changing the bin emptying process.  I know another business which uncovered theft by changing the people who balanced the cash at the end of the day.  I know of another retail business which cut theft by requiring the owner to approve all refund requests.

Theft in retail, customer theft and employee theft, can be cut by setting policies, adhering to them and ensuring that all employees adhere to them.

Our Point of sale software can also help retailers cut theft thanks to a range of public and not so public facilities which protect the interests of the business owners.  These facilities, like business policies, require setting.  Once done, the Tower Systems software monitors activity and can warn you of potential misbehaviour.

Theft kills retail businesses.  It is easier to stop than many think.

Security of POS software is key to cutting employee theft.  Next week, we are running a free online training event for owners of businesses using our software which will outline the security options and guide how to make the system - and the data it holds - more secure.

This training event will be on October 15, 2009 14:00. To participate you will need access to a computer with broadband and a phone from which to make a toll free call.

Retailers wanting to protect against theft should consider this training event.

We know from various reports that employee theft is a high-cost problem in retail.  We help retailers using our Point of Sale softare to cut employee theft with facilities such as:

• Employee sales tracking.  Using employee codes and or staff cards, every sales is easily tracked back to an employee.  This makes them accountable.
• Cash out management.  The til draw cannot be opened without appropriate permission.
• Owner controlled password protection. Retail owners have the ability to set passwords to control access to any function and thereby restrict what employees can access.
• Maintenance of an audit log.  We keep evidence of any potential fraudulent behaviour such as deleting sales (if permitted).
• TXT warnings of bad behaviour.  Our software can automatically send text messages to owners if behaviour has been detected which may indicate theft.
• Cash management. We carefully manage cash transactionally during the day and at the end of the day.
• Video integration.  We integrate with DVR technology to overlay counter activity with sales processes.  This makes tracking what happens to cash easier.
• Tighter EFTPOS integration. Facilities like Tyro cut employee activity when processing sales and this provides fewer opportunities for fraud.

Cutting employee theft in retail starts with the business owners making good decisions around business management.  Once you decide to run a tight ship, the day to day decisions become easier and your core goal has been set.

We have seen businesses add 2% and even more to the net profit of their business as a result of a good theft management policy.

Our Point of Sale software can be set to send a text message to the owner or manager of a retail business if it tracks a pattern of behaviour which may indicate employee fraud. The text message is sent without the knowledge of anyone working in the shop. The manager or owner can quickly log in, assess the evidence and take whatever action is required according to the standards established by the business.

This is another way we provide retail business owners with peace of mind when they cannot be in their business.

Our theft tracking tools have been successful in stopping what could have been expensive fraud against the business.

The text message facilities are part of our regular software package - there is no extra software module to purchase.

A newsagent called me earlier this week to share the news that he had caught an employee stealing from the business thanks to the Tyro broadband eftpos integrated within our Point of Sale software.

Each manual step in processing a sale which we remove is one less opportunity for fraud against the business. In this instance, the Tyro eftpos integration removed a loophole in local store practice which was being exploited to the considerable cost of the owner.

A couple of months after the introduction of Tyro in the newsagency, the smart Tyro reconciliation showed up the fraud and set the owner on a goal of fixing the expensive problem.

Our Tyro broadband eftpos integration is a smart move for our retailers because it delivers financially rewarding benefits:

• Cuts keystrokes. The amount of the sale is transferred to the pin pad.
• Cuts mistakes. . Less keystrokes means less mistakes.
• Reduces fraud opportunity. . With less manual intervention and a direct from the POS to bank processing there is less chance for someone to steal.
• Faster processing. With fewer keystrokes and lightening fast approval (less than 2 seconds) customers are happier and staff are happier. Everyone wins.
• Lower cost. The Tyro solution usually costs considerably less than a back supplied eftpos terminal.

While out theft check service helps uncover theft, our tyro integration helps retailers establish more checks and balances in their own businesses and thereby mitigate the costs of the problem.

Last month, we quietly released enhanced security facilities in our point of sale software.  The new facilities focus on reducing employee and customer fraud against businesses using the enhanced software.

Months in development, the enhaanced security facilities are truly state of the art and unique to our software in our marketplaces.  Our work has been done in association with experts in retail security.

We know that fraud / theft in retail costs between 3% and 5% of turnover.   Risk of discovery is key to reducing the cost to a business.  Our enhanced facilities provide the business owner with better facilities with which to discover a problem.

Security is big business in retail. CCTV systems, tag based security gates and other measures are used to try and cut theft in retail. Our retail management software has excellent security facilities which, without any capital expense, can significantly cut the cost of theft in any retail business.

We regularly host online security briefings for business owners to explain how to use the security facilities to cut employee and customer theft in a retail business. In fact, we have another of these briefings this week, on May 12. Access is free – book at our website: support / user meetings.

By engaging with the security facilities in our software, our users can demonstrate to employees and customers that the business takes a professional approach to risk management. This alone will reduce the impact of theft on the business.

We are about to start live testing of a significantly enhanced security bridge.  This bridge between our software and smart image recording technology is exclusive in our software - it enables our retailers to search image footage by transaction type, content and staff member.  This reduces the time spend reviewing footage in search on any event of concern.

We first released our secruity bridge six years ago and it has undergone significant change since.  The latest changes take the marriage of security management facilities and point of sale facilities to a new level.  We are grateful to technology developers overseas who have provided deep access to their image capturing systemto enable our new bridge to be built.

Once the in-field tests are completed we will release the bridge for general use.

Tyro is saving our retail users, including our own retail businesses, time and money with a better credit, debit, gift and loyalty solution.

Integrated EFTPOS means the point of sale device communicates directly with the EFTPOS terminal, reducing internal fraud and keystroke errors.

Tyro’s unique internet-based platform will improve your workflow and loweryour costs with:

• Speed and efficiency (transaction time less than 4 seconds)
• Low operational costs (no phone line, no admin fees, free paper rolls)
• Low integration set up costs
• Low merchant service fees
• Reduced internal and shop front fraud
• Secure, real-time online reporting

yro gives retailers a choice away from the big banks and we like the competition this drives.  You don’t have to change your existing banking relationship to join Tyro.

The Tower Systems / Tyro integration offers improved efficiency and accuracy - as we are seeing ourselves in our own retail businesses.  yes, we used this ourselves to prove its worth first.

For more information or a free savings analysis, call Tyro on 02-8907 1751 or email sales@tyro.com.

We yesterday completed a review of the handling and storage of customer credit card details processed through our point of sale software given the current tightening of security standards being driven by Australian banks.  Our software meets these tight standards. 

Our software, porcesses and standards have been passed by Australian banks as well as other international parties whose standards we must meet given some of the transactions we process. 

That we meet today’s standards including the PCI DSS standard offers peace of mind to current Tower Systems customers and prospective customers.

Years ago we released a suite of SMS facilities in our software whereby store owners and managers are sent text messages based on rules they establish using the software.  The text messages are sent without employee knowledge or involvement.

Once of our users earlier this week cracked a weekend friends discount racket being run by a new casual employee.  Our software alerted them to unusual discount practices.  They checked the details in the software from their location and put together the evidence they needed.

In developing these tools we set out to provide the business owners with peace of mind.  While it is frustrating to find that you have been ripped off, catching it early means you can stop the theft being repeated.

These SMS faciities are a standard part of our software - essential for all retailers.

We help users of our software reduce theft. We do this through the security bridge between our software and sophisticated camera systems as well as through straightforward advice. Here are seven ways you can cut theft by employees in retail.

1. Background check. Once you have found someone you want to hire, get their permission for a paid police check. This will send some candidates running.
2. Have tight processes. The most common theft we see is because of lack of control over cash. This is an invitation. Track every cent from the moment it leaves your customer’s hands to when it hits your bank account. This may seem obvious. The times cash is not tracked are considerable.
   
3. Change the roster. By changing routine unexpectedly you can find entrenched behaviour through which people take money and sock from the business. Breaking people working with friends is crucial.
   
4. Pay above award. This tells your staff they are above average and respected.
5. Respect employees. Let them buy things for themselves for a good discount, cost even.
6. Be open about the business. Involve your staff in paying the bills. If they understand that all of the cash you receive is not yours they respect the business more and may feel less tempted.
7. Be personal. The more connected your employees in retail feel to you as the owner, the more they know you, understand you and respect you the less tempted they will feel since they know it would hurt you.

The keys with employee theft are to be involved in the business, have tight processes and have a zero tolerance policy.

We know from our own retailer interaction that theft is on the increase in retail at the moment. We offer a free Theft Check service to our customers to help track theft which may have been tracked through our software. We have secret facilities we can use to uncover this.

The risk of getting caught is key to cutting theft in retail. Our integrated security / point of sale solution provides greater certainty of capture. As the photo shows, we record items being sold and list them over the vision of the sale. We have offered this link for many years. Our own experience is that the link pays for itself.

Beyond cutting theft, our link also eliminates disputes about amount tendered, when an item was purchased and other queries at the counter. These facilities boost confidence of team members when dealing with difficult customers.

In the back of the shop one can monitor the 8, 16 and even more cameras on the management screen. This is also where we can search the vision based on stock items and other criteria - for when we need to check when an was last sold.

With theft in retail costing between 3% and 5% of sales and a professional security system costing around .5% of gross sales, the financial benefits the point of sale / security system integrated package are obvious.