I have been working with another newsagent this week on an employee theft / fraud issue. It was the lax processes around managing cash which led to the newsagent being hit for at least $50,000. They did not worry about balancing their registers accurately each night, they also did not manage stock on hand. These weaknesses in processes invited the thief to act… and they did.
Check of the story in the Herald Sun yesterday about employee theft.
Newsagents are their own worst enemies sometimes. Here are some very basic rules to help newsagents avoid employee theft.
- Use your newsagency software properly including the full stock control facilities – they pay for themselves in no time with theft saved.
- Balance your registers at least daily. If cash is out by more than $5, hunt it down. Demand that employees are responsible.
- Use employee initials and codes on all sales. Yes they can fudge this. Just doing it is a hurdle many newsagents do not have today.
- Track stock on hand for tobacco products, transport tickets, phone cards with a face value, confectionery, ink cartridges, premium pens and, stationery. Start slow and work your way up. You will bank results from the work and eliminate the need for an annual stock take.
- Establish a theft policy and publish this to your employees.
- Change your system passwords monthly.
If the newsagent I was working with balanced their cash daily and tracked cigarette inventory they would have uncovered the problem much sooner.
Cutting the cost of employee theft in a newsagents is straightforward, all it takes is will on the part of the newsagent.
You’re right about making your systems more secure, with better tracking of inventory & closes etc.
You’re wrong about making employees responsible for tills being out more than $5.
Unless you have a separate cash drawer for each employee (no shared tills), that has a secure seal & is stored securely in a safe – you can’t pin this on the employees.
Yes you need to investigate till discrepancies. But to try and demand that employees are responsible when the employer hasn’t implemented adequate controls is laughable.
the problem i have in pinning till shortages on my staff is that i also work the front counter and use the same tills, what if i made a mistake in giving change to a customer??? hard to believe i know but i could the the one at fault. i could trawl back thru 12 hours of cctv footage (rather go home and have a beer), and we do use staff initials on every transaction, but that wont help if incorrect change given. At some point you have to have some faith in the honesty of your employees, otherwise im locked in to working seven days a week and all day on the counter, just to keep an eye on things. Our tills are sometimes out yes, but not that often fot me to get paranoid about it.
We have checks/systems in place so the staff know we do balance the tills every nite, we have cameras, and use staff logins, but could they still be stealing, well yes they could be, do i think they actually are stealing, well no i dont. Otherwise i would never be able to sleep. Tell me if im way off the mark, or thats how most of us operate in the real world?
Rick, in MY Real World, I do not investigate $5.00 at the end of every day !!! But I do keep a very evil eye out for the ups and downs, my tills are such that I spend more time checking on “shrinkage” than I do on the till operators.
Mark, when you say $5 I assume you mean “per register”?
I keep an “unofficial” running total of the tills balance just as we do (and is Aus Post practice) for the Post counter tills. So long as the running average is within $10 I don’t care. Some days we’re up a couple of dollars and others we go down a couple of dollars (most likely due to the vagaries of rounding) but so long as the total is within $10 I’m not worried.
In 18 months I’ve only had one discrepancy that I couldn’t find a valid reason for and its more than likely that it was two notes stuck together.
Hi Guys,
In past lives I have been an investigating accountant following money trails in corporate failures and frauds and found funds when no one else could…
However, this did not prepare me running my own Newsagency. We got hit for an estimated $25,000 not long after we took over the shop (7 years ago). I thought surely if I follow corporate money trails across the globe, I would be able to pick-up immediately that something in my little business was amiss. I didn’t and more fool me…
Over the past 7 years we have progressed from having 2 cash registers requiring manual balancing to now having full POS. However, even with this new technology staff theft is only one staff member away.
$5.00 out of the till is only the start and I know exactly where Mark is coming from. If your staff are aware of the lax attitude and you say its only $5 or $10, then that is an opportunity for them… That $5 to $10 per day, then becomes $2K -$3K per annum…
They then think, well what about that $5 scratchie each day, it won’t be missed if I don’t ring it up, and if they (and you) smoke then be really prepared… This easily escalates into $30K – $40K before you realise it. And to think it all started with a slack attitude of its only $5…
What everyone forgets is that cash to us is what we receive for our product or service (and we bank it) and stock is what we sell to generate the cash. For our staff money is what they need to survive, and selected stock items of ours are they use…
Cheers
Peter
Jarryd, no, overall. It’s achievable.
We’re usually within $5 of balance each day across the three tills we run. If not, everything is re-counted and we go through the reports to find the problem. Aust. post expect at least the same, and we’re usually within $2 of balance there. No smokers on staff and none of their family smoke either. Only theft issue I’ve found is people raiding my bins for topped mags, usually the naked girl ones!! We usually empty the vacuume bag over them to make them less alluring.
Peter
I get it now – nice post