Insights

Revenue Leakage at the Point of Sale: Cutting the Cost of Employee Error through Video Monitoring

December 12, 2019

How many dollars and cents must you lose in a day at the point of sale before it comes a problem that needs to be addressed?

For just about any owner/manager of a quick serve or fast casual restaurant, or of a convenience store or gas bar, any amount is an issue.

You know that dollars and even cents add up. The latest National Retail Security Survey from the U.S. National Retail Federation, for example, continues to show that employees are responsible for about one-third of a business’s shrinkage and the dollar loss from employee theft can be two to three times that from shoplifting by visitors to the business.

Whether an employee is making an honest mistake, is being overly generous with a customer to encourage a larger tip, or is engaged in outright and deliberate theft, the impact is felt. Every incident that can be avoided puts money back into the business.

For example:

Let’s start with sweet-hearting

This is the situation in which a clerk at the point of sale only pretends to scan and charge for an item before finalizing the transaction with the customer. Age is often factor – a common scenario is a young clerk giving freebies to their friends. A related issue is not asking for age verification on tobacco or lottery purchases.

And a free pop

Some restaurants give free refills to customers, some don’t. Sometimes, servers take liberties regardless. How many times might that happen over the course of a day – 10, 20, 30 times? Assuming $2 per pop, that adds up to a loss of $20, $40 or $60 a day, which may not seem like much versus your total receipts. But over a year, this would add up to anywhere from $7,000 to $20,000 in lost sales! This makes beverage control an important cost-saving area.

Or raiding the fridge

Again, it depends on your policy, but restaurants will expect employees to pay for either a portion of, or the full amount, of any snacks and meals they take during their breaks. How do you track compliance? Multiplied over weeks and months, employees who don’t follow the rules can literally eat a hole in your profit margin.

Take this example. One quick-serve restaurant that implemented a Solink system to monitor employee compliance saw an increase of $1,500 in employee meal payment – after one month! This equated to $18,000 in meals per year that were not previously paid for. When employees knew their activities were being monitored, compliance with company policy rose dramatically.

And letting food just walk out the door

Server handing customers food in bag

In a quick serve or fast-casual restaurant setting, there are many ways that food items can be served without being paid for, either because of employee sweet-hearting, customer deception or simple error. It’s important to monitor the volume of refunds, voids or cancelled orders and see if any trends are emerging.

Perhaps there is an unusually high number of these types of events when a specific employee is at the cash. Perhaps they happen at a particular time of day, such as a high-traffic period. Whatever the case, if you are not collecting and trending the data, it’s difficult to know if you even have a problem, never mind pinpoint the root cause and address it.

In all cases, the answer is to have a second pair of eyes

Digital eyes, to be exact. Modern video surveillance with the data analytics to quickly filter and search for the information, and the evidence, you need, to cut those losses where they happen. Maybe the problem rests with a dishonest employee. Maybe it points to the need for additional staff training or more staff on duty during those busiest times of day.

Whatever the case, having video surveillance integrated with your point of sale or other key systems like beverage control can help you improve the efficiency, and the profitability, of your operation.

In our next post, we will dig deeper into POS integration.

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