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Checking out cash register theft.

UNDERSTANDING what is expected of the cashier is the key to understanding cash register theft. No matter how much training cashiers have--or lack--they are expected to meet certain standards. They must treat customers respectfully, ring up all transactions properly, and collect all money with no discrepancy in the balance at the end of the day.

For the most part, the job is an entry-level position. In many cases, cashiers work while attending high school. Therefore, they do not even have a complete high school education. The position is plagued by high turnover and low pay. These conditions contribute to register shortages.

Management can prevent some of the losses through proper training, supervision, explanation of expectations, and a compensatory reward system. The rewards do not have to be monetary. Simply acknowledging a job well done can go a long way.

Training is the most important aspect of loss prevention. Many losses occur not because of dishonesty but because the cashier was not properly trained. Of course, theft must also be addressed.

Hand in the till. Removing money from the cash register without attempting to disguise the loss is probably the most common method of theft. It requires no skill. The cashier merely takes money from the register when no one is looking. He or she usually starts by taking change from the register just prior to a break.

Small shortages usually go unchallenged because managers accept them as part of doing business. But the amount and frequency increases as the thief tests to see how far he or she can go. Once the theft becomes consistent, the cashier will be reprimanded. At this point, the dishonest cashier knows the limits of acceptable theft and can take one of three actions: stop stealing, steal from another register, or conceal future theft.

Taking money from another register creates a hostile environment. Other cashiers are wrongly accused and reprimanded as the shortages bounce from register to register, or sometimes the thief preys on just one cashier. The thief's register, however, usually balances out.

This type of theft can be prevented with proper supervision. It usually takes place when the cashier showing the loss is at lunch, on a break, or performing other duties. To prevent this theft, the register operation key should be unique to each register, preventing one cashier from opening another's register.

Each cashier should also sign out on the register's detail tape prior to leaving the register and sign on when he or she returns. Any transactions, even a no sale, should be recorded between the signatures. This allows the cashier to call the register activity to the manager's attention.

When major shortages on registers operated by several cashiers occur, managers should begin making a chart. The chart of shortages can be used to reduce the suspects.

The chart should include every cashier operating registers in the store. Every day that a shortage occurs, the balance of each cashier is noted on the chart. If a cashier is not working on a date that a shortage occurs, this should be noted. Over a period of time the chart will indicate the person or persons working on days when the major shortages occur or that no shortages occur when certain cashiers are not working.

This chart does not prove that a cashier is a thief. It could indicate poor training. It could indicate that the cashiers are poorly supervised. The vault cashier could be taking the money. The chart is merely a starting place for the investigation.

Failure to record a sale. Failure to record a sale on the register is also a common method of theft. Comparing the sales recorded on the register after paperwork deductions, such as refunds and voids, to the actual money in the register is part of the balancing process. If a cashier collects money for a sale not recorded, then the money can be removed and no shortage will result.

Although the funds will not be short, an observant manager can detect this process through routine loss prevention procedures. One method is to check the registers frequently. Note any tally marks or apparent record keeping at the register. Surprise audits of registers also help detect theft.

Aborted sales. Every retail operation has a method to account for sales that have been abandoned. These aborted sales are called voided sales or voided transactions. If a procedure requiring accurate documentation has not been developed or if management does not closely monitor these transactions, this process can be used to cover for money that has been removed from the register.

Using a voided sale form can prevent many of these problems. This form should request the following information: date, register number, reason for the void, whether the sale was rerung, the cashier's signature, and the manager's approval.

For the best control, the manager should sign the form before the next sale is rung. This allows the manager to observe what has transpired. The receipt from the void should be attached to the form. If possible, the form should be validated on the next transaction.

Unfortunately, customers paying by charge card or check feel that the cancelled check or the copy of the charge form acts as their receipt. When a customer charges or writes a check, the cashier can set up the appearance of an aborted transaction by pressing the balance due key instead of recording the amount tendered. Then, if the customer asks for the register receipt, the cashier will give it to him or her. However, if the customer does not ask, the register receipt is then used for a void, and the money for the sale is removed from the register.

This fake void can be detected in several ways. The manager should compare the voids of one register to other registers operating the same day. An inordinate dollar amount indicates a problem. The problem could be erroneous voids, a lack of training, or poor price-marking practices in the warehouse. The manager should take action to correct the problem--whatever the cause.

If the reason for the void was that the wrong price had been entered, the manager should review the detail tape to see if the item was rerung. Also the manager should be aware of too many voids that give reasons such as "Forgot checkbook" or "Did not have enough money." Sometimes a customer gets to the register and discovers that he or she cannot pay for the merchandise; however, it is not an everyday occurrence.

Shortchange. Shortchanging the customer is another method of theft. It is not used frequently because it is easily detected and reported by the customer. In this scenario, the cashier gives the customer back less change than is required and pockets the difference. Many times the victims are elderly people or customers that have vision problems. The manager should listen to customer complaints.

Fake robbery. One method that is rarely used but allows a cashier to obtain a large amount of money at one time is the fake robbery. A cashier who is alone at the registers removes all of the bills then calls the manager to report that he or she has been robbed. Most managers do not suspect that their employee is lying, so the case becomes a police matter. The police have no hope of apprehending the suspect because they are relying on the thief for leads and information.

Collusion. Collusion or "sweethearting" is a popular method used to obtain merchandise at a reduced price. In this scenario, the cashier has a friend come through the check-out and purchase items from the store. The cashier can allow the person through the register without payment. But, to avoid suspicion, the cashier usually enters the merchandise's regular price and then voids the sale as "Forgot money."

Sometimes the cashier rings the items at a reduced price and collects for the purchase. In establishments with liberal refund policies, the team can then refund the merchandise for cash. The store loses either way.

Detecting this type of theft is difficult but not impossible. Many companies have registers that can be programmed to duplicate a transaction at a remote site as it is entered by the cashier. The person monitoring the purchase can see both the merchandise and the record entry.

Good supervision at the registers is a deterrent. Random use of video surveillance or checks of the detail tapes to detect a long series of ridiculously low-cost item entries can initiate further investigation.

Coupons. Vendor coupons, especially in a grocery store, can be a problem. Cashiers can clip coupons from magazines, newspapers, or direct mail, place them in their registers, and redeem them for cash.

A cashier assigned to fill the display of cigarettes may fill the rack from cartons with $2 and $3 vendor coupons attached. The cashier then redeems the coupons in his or her register. No shortage will draw attention to this type of deceit. To detect it, management must review register records, looking for large coupon redemptions in one register.

Most outlets require the coupons to be rung into the register so a record exists on both the receipt and detail tape. By occasionally comparing the coupons in the drawer to those recorded on the tape, the manager can detect a problem and establish a monitoring plan.

With the improvements in the data entry programs of cash registers, many companies have the ability to program the register to accept only coupons for merchandise that has already been recorded on the register. Also, registers are programmed to give a total for the coupons entered into the register. This total can be compared to the coupons turned in by the cashier.

Cash accountability is the key to any successful retail loss prevention program that affects money flow. The overall process can be developed on these principles to prevent, reduce, and detect loss.

Cashier accountability. The cashier must be totally responsible for the register operation and the funds that are collected. He or she should count the money assigned at the beginning of the day to ensure that the correct amount is received. Only one operator should be assigned to a register, and all paperwork documenting transactions should be maintained by that individual throughout the shift. Ideally, the cashier should count the funds turned in at the end of the work shift.

Management should also use a bleeding process. By periodically removing money from the register, managers help avoid vulnerability to thefts or temptation. If this procedure is used, a method of documenting the money removed should be provided.

If the money is placed in a safe that is secured in the register station, only a limited number of people should know the combination--and the cashier should not be one of them. Money dropped into the safe should be documented in some manner.

If money is dropped into the safe in set increments, it allows the cashier to easily perform the process and record the amounts. This can be done throughout the day during the slow periods, avoiding a lengthy process at the end of the day. It should be performed prior to the cashier's break time.

All voids should be documented, explained, and signed. If register operation permits, the slip should be validated on the next transaction. All refunds should also be recorded if handled through a line register.

Verification of funds. The funds should be verified by someone not associated with register operation. Many operations have a vault cashier whose only duty is to account for store funds. The vault cashier should balance the vault funds twice daily, at the beginning and the end of the counting process. Each register's money should be counted separately.

The paperwork resulting from the register operation and the detail tapes should be stored separately from the register funds. The vault cashier should not be aware of the register totals and merely record the money and amounts from each register. The accounting sheet should then be turned over to management to determine if each register is over, short, or balanced.

Verification of receipts. The balancing of the receipts to the cash count should not involve the person responsible for counting the funds. After the money has been counted, a manager should record the total sales from the register detail tape and subtract all voids, refunds, and paid-outs. The result should then be compared to the money counted, and the totals should be recorded as a balance, an overage, or a shortage.

If such a cash accountability program is maintained, the process provides an accurate accounting of the funds, a responsibility for the recording and accounting process, and a paper trail to document the process. Each person is responsible for his or her part. Shortages and overages are easily traced. This, coupled with a standard procedure for documenting sales in the register itself, allows management to review the records on the detail tape and isolate any problems.

Many managers for companies that have established cash accountability procedures do not enforce them on high-volume days. Inconsistency, especially on days when the most money is received, leads to vulnerability. The cashier sees that the accountability measures are not mandatory, and assigning responsibility for shortages becomes difficult.

Although many measures exist to detect theft from a cash register, the most cost-effective approach is prevention. This is done by establishing sound controls and ensuring that both management and employees comply with these rules.

E. Floyd Phelps, CPP, is assistant director of the department of public safety at Southern Methodist University in Dallas. He is a member of the ASIS Standing Committee on Educational Institutions.
COPYRIGHT 1992 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:program for loss prevention
Author:Phelps, E. Floyd
Publication:Security Management
Date:Nov 1, 1992
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