Thursday, September 13, 2012

Your Employee's are Stealing from You - But Here are Some Things Point of Sale Can do About it.

I'm currently working on a workshop for the Idaho Small Business Development Center leadership as well as a expanded workshop for the clientele who want to learn more about specialty retail point of sale systems.  In gathering some updated data for the workshop (which allows a retail business owner to properly budget for a point of sale system), I came across a surprising statistic on retail theft from the National Retail Federation (NRF).

The survey indicated that employee theft accounts for 43.9% of all retail theft (or "shrinkage" as we like to call it in the industry).  This would account for intentional and unintentional employee theft (which I will explain further a bit later).  Naturally, that is a large percentage - higher, percentage-wise, than even shoplifting!  An official overview of the NRF survey can be found here:

Almost every time I talk to retail store owners about employee theft, the response normally is "not at my shop - my employee's are trustworthy". Based on the survey, that may not be fully true. But, employee's may not be intentionally stealing. Here is a how most point of sale systems can help prevent intentional and unintentional employee theft:

Intentional employee theft: security settings in point of sale software will help prevent an employee from discounting the price of an item, voiding an item, taking a return, or voiding a sale without permission from a manager.  The customer display (little screen that faces the customer which shows items as they are rung up and then an overall total) that comes with a typical point of sale system can help keep an employee honest as well.  If the customer display says "$0.00" but the employee gives a total amount due of $124.95 then something is amiss.

Unintentional employee theft: use of barcode labels with prices will eliminate the need for an employee to guess what the price may be.  Inventory control puts checks and balances in place when it comes to trying to sell a product that is out of stock. Finally, the system does tell the correct amount of change to provide since I rarely find anyone who knows how to correctly count change anymore.

Studies by National Cash Register and feedback that I have received from retail store owners indicates that using a point of sale system will increase net profit by up to 3% by simply reducing employee theft.  That equals about $7,500 in additional net profit for a typical specialty retail store.  Not bad since this is only one aspect of a point of sale system.

Next up - specialty retail point of sale systems for 2013 and beyond as well as more data on how point of sale increases a stores net profit.

Your comments and personal experiences with employee theft and retail point of sale systems are welcomed!

Are you in the US and in need of no cost retail point of sale advice? I'm happy to help and can be reached on my cell at 208-340-5632 (mountain time) or via email at

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