Gourmet Retail Detail
Whose Hand is in Your Till?
by Mary Liz Curtin
Independent retail is a money–making business (at least that is our hope), but too often the money we make never hits the bank account or leaves the account without our knowledge.
Recently I have read several accounts of retailers who were robbed by their accountants, bookkeepers, trusted employees and even their own children. As our economy gets tougher and it is harder to fill the tank to get to work, this is a sad story that we will hear even more often. A wise merchant is very careful with her cash.
Most of our employees are honest and trustworthy, but even the most honest have fallen when times are tough. The smartest way to prevent internal loss, and help your staff avoid temptation, is to make it difficult to steal money from your business. While employee merchandise theft is also a huge issue, today we are discussing embezzlement and cash theft.
The Cash Register
John Wanamaker invented retails that ended in 99¢. This was not to
make prices seem lower (although that was certainly a huge added benefit),
but to keep the clerks honest in the days before cash registers gave receipts.
If an item was $10, and the customer gave him a $10 bill, the clerk could
easily place the cash on the shelf of the register and pocket it when
the customer left. If the item was $9.99, he had to open the drawer to
give the penny back, making it harder to steal.
How secure is your register? If your drawer is short at the end of the day, can you tell which clerk is responsible? Most old time merchants will insist on having every clerk count it to her drawer on each shift and count out at the end of the shift. During the shift, only that cashier may ring on the register and is responsible for the money in the drawer.
What about returns? Can your cashier make a bogus cash return to a friend while no one is watching? Consider requiring a customer's signature for cash returns.
Take a little time before your heavy selling season to check your register policies and see if your till is secure. Talk to the experts from your point of sale system and your accountant, review your procedures and make sure they are tight.
When you implement a cash drawer policy, be certain that every clerk knows that you are watching the totals at the end of the day and checking to see that the register balances. Close oversight encourages honesty.
Where Does the Cash Go?
After you close the registers and check the balances, where does the
money go? As more and more of our business is done by credit card, few
of us make daily deposits. We save the cash until there is a nice pile,
then stop at the bank. Where do you store your cash? Do you account for
it when you finally make the deposit?
Watch that money, whether it is at the store or at home. There are countless tales of housekeepers, employees and store owner's children finding the money and taking cash from the pile, a little at a time. I know one woman whose daughter stole thousands of dollars from her. She found out at the end of the year, when she could not pay the holiday bills or the taxes. The scariest part is that her accountant had noticed that the sales and the deposits did not tally, but never mentioned it because she thought the shopkeeper took the cash.
The smart thieves take just a little - maybe a 10 or a few 20s at a time, and can easily keep it up for years. Little kids do it, too, so keep that money locked away.
Watch the Bookkeeper
This is so easy. You hire somebody to do the books, an onerous chore hated
by many shopkeepers, she makes your life so much easier that you stop
looking and suddenly you discover that thousands (perhaps tens of thousands)
of dollars are gone.
This is a frequent story at churches, where the parish secretary tearfully confesses that she has been stealing for years. Many of these thefts start almost innocently, "borrowing" just enough to pay the mortgage or pressing bills. Naturally, if the bookkeeper is not caught, she "borrows" repeatedly and then can never pay back the "loans". Often these are nice, honest people who need money desperately. Do not tempt them by making it easy to steal. Check references carefully before you hire anyone to work with your accounting or payroll and always audit their work. If an employee resents your looking over his shoulder, that is a danger sign.
Passwords
How many of your employees know your passwords to various accounts? Now
that we have hundreds of passwords for everything from Internet access
to buying postage online, we are often give employees some of the codes.
Make sure the passwords you use and share with your employees are different
from the passwords you use for more important things, like bank accounts.
Change the passwords occasionally, and always when an employee who has
access to several accounts leaves.
A Few Simple Suggestions
Always sign all your own checks. This is a very simple practice that clearly
shows you are watching your money and gives you a good layer of protection.
Send all credit card and bank statements to your home. Read them and reconcile them yourself so you can see anything peculiar immediately. Review credit card statements carefully - lots of people have our numbers. Remember that you are looking for mistakes as well as fraud.
Get a small safe at your home for cash, important documents and other valuables. They are not expensive, small, and protect you from fire as well as theft. Don't just buy the safe, USE IT! While it is very easy to tuck the cash in a desk drawer or a closet shelf, it is not secure.
"'Lead us not into temptation' is not only an intercession to God but a reminder to owners and supervisors that even the best people "need" help to consistently do the right thing," says Rev. Faith Fowler, Senior Pastor at Cass Community United Methodist Church and Executive Director of Cass Community Social Services, Detroit, Michigan.
Employee theft is on the rise nationwide. All merchants need to be aware of it, take precautions and protect our employees from temptation.
As the holidays approach and we get busier and busier, there will be more opportunities for dishonesty and fraud. Make it difficult for anyone to divert your hard earned money into his or her pockets. You owe it to yourself and your employees. Review your procedures, at home and at the store. If you do discover that someone on your staff has been stealing from you, you must fire that person at once and should consider pressing charges. No matter how sad the story or close you have been to the person in the past, he or she must go.
Don’t wait to have this happen to you. Tighten your security now and stay vigilant. Monitor your employees, consultants and bookkeeper. Prevention beats prosecution every time.
Mary Liz Curtin and her husband own Leon & Lulu, a 15,000 square foot furniture, gift and accessory store located in a former roller rink. Visit her on-line at www.marylizcurtin.com
Prevention Check List
- Get a signature on all returns.
- Have a cash drawer policy for employees.
- Let employees know the consequences of any acts of theft.
- Do background checks on employees, especially a bookkeeper.
- Always sign your own checks.
- Guard your passwords. Limit the people who know important ones.
- Get a safe at home and use it until you can get to the bank.
- Personally check all credit card and bank statements to look for errors as well as fraud.
- When it comes to money, treat family like employees.
According to the National Retail Federation, organized retail theft is on the rise...
