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Lane accountability can lead to employee theft in retail stores

16 Apr 2018 Blog
Tellermate

Increasingly tight margins have caused many of today’s brick-and-mortar retailers to cut costs. And one of the ways some of them are doing this is to transition from cashier accountability to lane accountability. Although this seems like a great way to drive efficiency it can actually be detrimental to retailers as it opens the door to employee theft in retail stores.

Lane accountability is when a till stays at the same lane/register all day and is used by several employees. At first glance, the practice seems cheaper for businesses because there are fewer tills to manage and less time involved in switching cashiers.

But ponder this: Is reducing operating costs justification for creating a system that’s detrimental to your staff and your business? One that reduces accountability, reduces control and leads to a greater chance of internal cash theft?

Some retailers, in an effort to remain competitive, cut labor costs but often fail to realize the negative short- and long-term implications – for the business, its employees and customers, too. Two months ago, we dug into the implications cutting labor costs had on sales and customers, but today’s focus is on the negative impact these decisions can have on employees and retailers alike.

I can think of some recent examples that are backfiring – or will backfire – on businesses while lowering employee morale. These examples include:

  • Lane accountability rather than cashier accountability
  • Weekly till reconciliations
  • Knowingly implementing cost-cutting processes that are sure to increase internal cash theft and loss
  • Permitting a low cash-loss tolerance

I challenge businesses to think through the potential ramifications of applying cost-cutting decisions, such as implementing lane accountability, before going through with them. Because they can open up a whole new can of worms that include rampant employee theft in retail.

Lane accountability can lead to punishment, doubt of innocent employees 

Employee theft in retail stores

Lane accountability can create opportunities for internal cash theft. Say your cash drawers are counted on a daily basis, but several employees use the same lane and cash drawer. If cash goes missing, it’s difficult to pinpoint which cashier is responsible. Finger-pointing and divisiveness ensue and morale is adversely affected. You might suspect all of the cashiers using the same lane – and they will doubt each other’s honesty as well. Say goodbye to good employees who can deliver exceptional customer service.

When cashier accountability goes away, your cash often goes with it. And the thing is, some businesses actually know and accept this employee-related cash loss. These managers report that internal cash theft costs them less than having cashier accountability – which they believe costs more money and time than lane accountability – so they let it happen anyway.

Is the short-term savings worth allowing a flourishing system in which cash theft is the norm? Is it worth employees doubting one another’s character? And how does it impact employee retention and the associated costs to hire and train new staff?

Weekly till reconciliations: ripe for internal cash theft in retail

Some retailers lately have done away with daily till reconciliations in favor of weekly ones. Their reason? Reducing labor costs. Sure, it takes less time and payroll to reconcile your tills just once a week as opposed to daily – or even during shift changes. And therefore, seems like an effective cost-cutting measure. But what happens when cash discrepancies, including missing cash, is discovered just once a week? How can you drill down and find out who is responsible or if a pattern of loss is going on right beneath your nose?

There’s no need to operate this way. Cash management technology provides the means to reduce labor costs associated with cash management yet improve accountability. It also virtually eliminates cash loss and theft at the Point of sale (POS). Sounds too good to be true? It’s not.

Without retail technology at the POS, weekly cash drawer reconciliations create an irresistible opportunity for some to steal. If, for instance, your staff knows you count tills every Sunday and then perform spot checks on Wednesday, the likelihood of them getting caught for stealing cash on a Monday or Tuesday is pretty low. Same with Thursday, Friday and Saturday.

Low cash-loss tolerance permits cash theft in small amounts

Another scenario involving internal theft in retail stores involves businesses setting low cash tolerances, such as £5. Some cashiers will pocket a £4.99 loss frequently – just because the loss is below the allowed threshold. Picture an employee about to quit who knows any cash loss below the threshold takes weeks to identify and investigate; so why not steal this amount during each shift? Although the loss of £4.99 a few times a week may not seem significant, several employees stealing small amounts will put a big dent in your profits.

Intelligent cash drawer thwarts cash loss at the POS

Cash management technology at the POS provides retail theft prevention. All of these aforementioned internal cash theft instances at the POS can be reduced – and even eliminated – with the help of an intelligent cash drawer solution. LiveDrawer flags every cash-related discrepancy at the till. Even when lane accountability is the norm.

LiveDrawer Manager, the software and reporting component of LiveDrawer, allows you to receive an instant alert when a cash discrepancy happens. You can choose to keep this to yourself to track internal theft; or you can have the alert filed at the register as well – allowing the money-related mistake or theft to be corrected on the spot.

The fact that LiveDrawer tracks each coin and bill/note going in and out of the drawer often prevents internal cash theft in retail altogether – particularly at the POS. That’s because LiveDrawer records the time, lane number, transaction and cashier responsible. Even an amount as small as £4.99 ‒ as in the example provided earlier. This is because you can have LiveDrawer report on cashiers who repeatedly rack up cash losses, even if they are below your daily threshold.

Our intelligent cash drawer solution provides a goldmine of intelligence that includes which store has the most cash-related discrepancies, which cashier drawers are consistently over or short; and which location has the most end-of-shift tolerance breaches.

So, rather than allow cash-related theft in retail stores to persist, perhaps the investment in LiveDrawer is worth a further look. Not only does it reduce cash theft at the POS, it also deters would-be thieves from unethically sticking their sticky fingers in the till – resulting in a happier, more united store and better staff retention.

Find out how LiveDrawer helped one of Europe’s top electronics retailers virtually eliminate cash theft at the POS by downloading this case study.

 

LiveDrawer Case Study

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