Restaurant shrinkage can come in many forms, such as spoiled food, over-pouring, under-ringing, counting errors, internal theft, and more. Shrinkage is relatively inevitable in the restaurant industry. A shrink rate of 5-10% is exceptional, and a rate of 16-24% is average. However, if your shrink rate is above that, you’re in trouble. Shrink can eat up your profits if you aren’t proactive in taking a stand against it and putting a stop to it. If the majority of your shrink rate is caused by cash shrinkage, you should be taking steps to ensure that your employees aren’t making errors at the cash register or intentionally stealing from you. Your bottom line may depend on it.
Cash handling errors and internal theft can negatively impact your profitability. To eliminate high cash shrinkage, take these steps.
When it comes to eliminating cash handling errors, one of the best things you can do is invest in comprehensive cashier training. Focusing on comprehensive training can help you ensure that your cashiers are equipped with the knowledge and practice required to process all monetary transactions effectively and efficiently. Cashier training can also help you reduce careless money handling practices and help you see any common transaction errors and cash handling mistakes early on so you can prevent them from occurring in the future. The fewer mistakes your cashiers make while handling cash, the less of an effect cash shrinkage will have on your profits.
Employee Background Checks
Employee background checks are critical for reducing your risk of internal theft. The restaurant industry is a large target of internal theft. Whether you want to believe it or not, some of your employees will steal from you if they’re given the opportunity, whether because they hold a grudge, because they believe they’ve been wronged, or for some other reason. But employees who steal once may have done so in the past with former employers. Performing background checks before hiring new employees is a sound business practice—it can let you see red flags in their past work history, so you can avoid people who have been caught stealing at work before.
Part of your cashier training should focus on showing your new employees the standard cash handling procedures that must be followed at all times. You should have strict processes for taking orders, processing transactions, counting inventory, depositing cash, counting floats, and reconciling profits.
For example, your employees should have to sign a log book every time cash exchanges hands or moves locations. They should never be allowed to share cash registers. And only managers should have access to high-risk areas.
Surveillance cameras can significantly deter internal theft. Using high-resolution cameras at all points of sale, in your cash room, and anywhere else your money is handled can make your employees think twice about pocketing your money. They won’t risk it if there is a high likelihood of getting caught on camera.
Cash Management Technology
Cash management technology can significantly reduce your cash shrinkage. Solutions like cash counters and sorters and currency recyclers can help you create a hands-off approach to money handling, reducing opportunities for theft. When the machines are doing much of the work that your employees used to do, your workers won’t have as many opportunities to be alone with your cash.
In addition, these machines are 99.9% accurate, so they can reduce cash handling errors that reduce your profits, both at the register and in the cash room.
Manual cash handling significantly increases your risk of cash shrinkage due to errors and internal theft. Put a stop to it by investing in cash management technology. Cash management solutions will increase accountability, track and record every dime, authenticate money coming in, and automatically count, sort, and report totals.