Protect Your Business from Shrink with Strong Cash Management

    Jan 16 2014

    The PWC 2012 Canadian retail security survey examined, among other issues, the problem of shrink in retail stores. One noteworthy piece of information uncovered by the survey is that while retail stores have experienced a reduction in external theft, incidents of internal theft have become more frequent since the previous survey in 2008. It is unfortunate that some employees resort to theft for personal gain, but retail outlets need to be aware of the possibility and enact policies and procedures to protect themselves against it.

    The survey reports that alcohol, ladies' apparel, and cosmetics and fragrances are the top items contributing to both internal and external shrink. Other items reported as frequent candidates for theft include health and beauty items, men's apparel, footwear, sporting goods, and media such as DVDs. When the question is shrink from internal sources, it's not only retail goods that are at risk. Employees often have access to cash drawers or even back offices where cash is kept, and it can be a simple matter for some of a store's cash to walk away in a dishonest employee's pocket. Enacting strong policies to prevent the theft of cash is just as important as preventing the theft of goods.

    One of the best ways to keep cash from disappearing is to put very clear, thorough, and effective policies in place regarding how cash is counted and tracked as it moves through a retail store. Employees should know from day one what their responsibilities are regarding cash in every detail, from how they pick up floats for cash drawers to how they get change or make deposits with the back office to how they reconcile their floats at the end of a shift or the end of the day. The staff who count and reconcile cash in the back office need to be scrupulous in counting every penny, and tracking down any discrepancies. Loose cash handling leads to problems, either in honest bookkeeping mistakes which need to be fixed or in cash being stolen by staff who know it is not closely tracked, and who believe their theft will not be noticed.

    Stringent cash tracking is made easier by technology to help with the process of counting and reconciling cash. While cashiers may need to count their own cash drawers by hand for the sake of practicality, the staff in the back office should have a note counter, and, if necessary, a coin counter to facilitate the process of reconciling all of a day's floats. Cash counting machines make this process faster and more accurate, so any discrepancies in reporting floats will be caught quickly, and can be followed up on with employees. Some cashiers may simply need to be more careful in counting their cash drawers, while others may need follow-up training to make sure they know the correct way to reconcile their floats. Whether discrepancies between cashier reporting and back office reconciliation are honest mistakes or the result of dishonest employee actions, careful and thorough cash management will discover the problems so they can be corrected quickly. 

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    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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    CashTech Currency Products Inc.
    1040 Cardiff Boulevard
    Mississauga ON, L5S 1P3