The POS Software Blog

News from Tower Systems about locally made POS software for specialty local retailers.

How to reduce employee theft in your local retail business


Tower Systems has been helping local retailers reduce the impact of theft, including employee theft, for many years. Through its POS software to working with police and to being expert witnesses at trial, the Tower team is skilled and capable of helping local retailers in a variety of situations to reduce employee theft in retail.

The actual financial cost of  employee theft is often under considered by small business retailers. We think  this is because of denial. However, given that the amount that can be taken in one hit or in micro amounts over a long period of time can be considerable once toted up.

Here are steps we have found to be useful in many different retail settings to cut the cost of retail employee theft:

  1. Track all stock. From what comes in to what is sold to what is returned. Track everything. Have clear processes for everyone to follow.
  2. Track each sale by employee. This makes each accountable for their sales.
  3. Use your software. Use it for managing the end of shift balancing. Use it for tracking petty cash out. Feed all your data automatically to Xero or other accounting software. Eliminate all manual processes that relate to cash.
  4. Do spot cash balancing. Unexpected checks can uncover surprises.
  5. Change your roster. Sometimes people work together to steal.
  6. Setup a theft policy. Ensure staff read it and sign up to it.
  7. Keep the counter clean. An organised counter reduces the opportunity for theft.
  8. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  9. 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.
  10. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  11. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

All it takes is one organised employee to spot a gap in your processes through which they can get the cash they want for lunch each day or for some other purpose. Your processes determine if this gap exists and the extent of it. Structure and consistency are key to reducing the cost of employee theft in any local retail setting in our experience.

By Mark