There are few places in a restaurant more vulnerable to theft than the point of sale (POS). Thankfully, a modern POS, when integrated with your video surveillance system, can help you find, prevent, and stop theft. Here, we take a look at point of sale employee theft and how to stop it.
To find out how Solink turns your security cameras and POS into an integrated loss prevention system, sign up for a demo today.
Types of POS employee theft
Employees can steal at the POS in many ways. Thankfully, Solink’s video analytics can show you suspicious transactions with a couple taps on your smartphone screen. We can show you what you need to see even if you don’t know about the POS employee theft risks you are facing.
However, knowledge is a powerful tool in the fight against loss, so here are the main forms of point of sale employee theft.
In this form of POS theft, an employee voids a legitimate purchase to refund the money to themselves. The customer receives an item, but the employee voids it from the bill (or potentially the entire bill) and pockets the difference.
Most restaurants offer employee discounts or even free food during shifts. Some even offer a discount card to use all the time to promote higher sales to employees. Unfortunately, some employees take advantage of this perk.
Discount abuse is applying discounts incorrectly for self-purchases or creating “sweetheart” deals for friends and family.
You might not think food theft is part of point of sale employee theft, but it can be. Especially in the quick service restaurant (QSR) environment, unusually small orders can be a sign of theft. The employee might be charging their friend for a soft drink and then handing off a bag with a full meal.
This is a particularly brazen form of POS theft. Employees take legitimate cash purchases and then refund them to their pocket after the customer leaves. Some employees could even refund credit card purchases to their own credit card.
While receipts and credit card purchases have become a lot more common in sit-down restaurants, many bars still see a significant number of cash transactions. In these cases, there’s the opportunity for waitstaff to take cash from the customer and pocket it.
False returns are similar to voids. In this case, the customer receives the item, but the employee later refunds it, for example by saying the customer was not satisfied with their meal. The customer thinks they have paid, but the employee keeps some or all of the total sale.
When there are two similar looking items with different prices, especially if lost inventory due to wastage is common, there’s an opportunity for POS theft. One prime example is domestic vs. imported draft beer. The bartender pours expensive pints for their friends and family but records the sale as the cheapest beer on the menu.
Suspicious POS activity you should verify with video integration
The single most important thing you can do to reduce employee theft at the POS is monitor their activity. However, that’s impossible to do on your own. There are just too many transactions in a day to monitor all of them.
Solink can help. Solink allows you to filter transactions by those with discounts over a certain percentage, cash transactions, voids and more so you can see all of the suspicious transactions without spending your whole day watching video.
Here are some of the transaction types that should be reviewed. Note that they aren’t always fraudulent, but keeping an eye out for fraud in these cases is prudent. In fact, a Carl’s Jr. operator successfully does this with Solink at his locations.
All refunds should be checked with video surveillance. You can immediately see whether the customer is there, if they have the receipt, and why the refund occurred.
Do you have an employee offering free appetizers regularly or using their discount for large tables? These are common forms of POS employee theft and all such transactions should be reviewed. Solink can show you all transactions by employee if you have concerns about how they use their discount, or you can see all transactions with a discount above a certain threshold such as 50%.
These transactions have a similar result to discounted transactions. However, this is often done without the customer’s knowledge.
This is a way for the employee to add cash to the till or remove it later without creating a transaction. They might not even be aware that you can find all such events.
Small transaction size
Do you know the typical range of transaction size for different hours of the day at your locations? Sometimes very small transaction values, especially during lunch or dinner hours when they would normally be larger, is an indication that your employee could be stealing.
They might be giving friends or family large meals but entering on the POS a coffee. Alternatively, they might be charging full price and then only ringing in a drink to pocket the difference.
Long duration transactions
While some people might linger all Sunday to watch football, most transactions do not stay open that long. Long duration transactions can be an indication that point of sale theft is occurring. In this case, the employee might be reusing the same tab all day long to sell multiple of the same item to different customers and only process the transaction once.
Cars without transactions
There are legitimate reasons for a car to go through the drive-thru window without an order. It could be a pickup only if they used the app, or there might have been a mistake in their order. However, sometimes it’s an indication that a cash payment was pocketed or friends swung by for a free burger.
Let’s say your rush hour is from 5 to 7 p.m. and you typically do 200 transactions per hour. If you notice that only 150 transactions occurred, it is worth going through your video footage using the Solink platform to see what happened. It could be a storm or a broken ice cream machine that reduced the sales figures, but it could also be POS employee theft.
This can occur during slower periods as well. If you usually only get four or five transactions between 10 p.m. and close, but see that none have been entered, then there is the same possibility of theft.
There was a time when exact change was common, but it is rarer now. Too many exact change transactions could be an indication that something strange is happening. The implication is that the transactions may be bogus. Instead of processing the entire order, the employee might be punching a small item into the POS, paying exact change for that item, and keeping the rest of the proceeds of the sale.
Multiple refunds by same credit card
You probably don’t have a record of a complete credit card number, but matching the last four digits across multiple refunds on the same day, or during the same employee’s shifts over several weeks, might mean someone is stealing.
How to reduce point of sale employee theft
Reducing POS employee theft requires a concerted effort. This effort requires a mix of the right processes and the right technology as well as employee training. We discuss this more generally in a dedicated article on loss prevention systems.
During a labor shortage, it is not always possible to put hiring best practices in place. However, whenever possible, you should perform background checks on potential hires and check their references.
Most people think about training as part of the onboarding process. Once the employee has passed training, the process is over. However, training is best considered an ongoing process.
When problems arise, consider them a learning experience and retrain employees. Even when there aren’t specific training needs, a solid ongoing coaching plan will reduce the likelihood issues do arise.
Track data with Solink
Most modern POS systems provide actionable data, such as transaction types, size, and the employee associated with the sale. Similarly, business security cameras give you eyes on what’s happening in your locations.
However, unless all of your data sources are integrated with your video surveillance system, you won’t see the information you want when you need it.
Exception-based reporting tools reduce POS employee theft
Exception-based reporting is a new trend in loss prevention. By focusing on the exceptions, you get to see any potential issues while skipping videos of the normal business operations.
The cost of finding employee theft used to be so high that only large losses warranted investigation. Many companies just accepted smaller or occasional theft as “the cost of doing business.”
With lower margins, that’s no longer acceptable. Solink also makes it profitable to find even the smallest shrinkage by automating all of the time-consuming searching.
To see how Solink can help you get a handle on POS theft, please sign up for a demo today.
Use the data with Solink
It’s not enough to collect the data at your POS and with security cameras. You need to put that data into action. Solink shows you what you need to see without spending hours scanning video.
When you identify POS employee theft using the Solink platform, it is important to handle it consistently according to your employee theft policy. The consistent use of your video data is a signal to your staff that you take employee theft seriously.