When I think about cash register tips, I'm reminded of an employee theft I once witnessed. On that day, not that long ago, I was purchasing a $3.00 package of paper towels in a convenience store that was owned by a client.
It was late in the day, about 5 minutes before closing. As I was standing in the lineup waiting for my turn to pay, I observed the cashier, “Marcie” (not her real name) interacting with her customers.
I noticed that she was mentally calculating their change instead of having the cash register do it for her.
That seemed to impress a lot of customers, but not me!
As I approached the counter when it was my turn to pay, I noticed that “Marcie” had not closed the cash drawer from the previous transaction.
I watched as she took my 5 dollar bill, mentally calculated 45 cents in tax, and gave me $1.55 in change. The numbers added up, but her behavior did not.
She was stealing money right in front of me!
For starters, when “Marcie” dialed the $3.00 into the cash register, the numbers flashed on the screen, but she had not “entered” the purchase into a category. It had not “registered” as a sale, and was not being recorded.
The cash register didn’t make a sound, nor did it print a receipt.
She was stealing right before my eyes!
I knew that at the end of the day, when she cashed out her register, there would be more cash in the drawer than had been recorded in sales. She would pocket this money and then balance her cash.
That night I called the store owner whose name was Ross, and told him of my experience. He was shocked.
I suggested he check the Z-reading (the cash register tape that records ALL transactions) the next morning. I described the purchases made by the customers who were in the lineup before and after me. It would be easy for Ross to verify if my $3.00 purchase had been entered at some point after I left the store.
Sadly, and as suspected, there was no $3.00 order entered at all during Marcie's shift.
"It was true. She was stealing."
Ross said something that resonated with me that would confirm my suspicion of theft.
He said that “Marcie” was the only employee he ever had whose cash balanced to the penny. In his 25 years in retail, nobody’s cash ever balanced to the penny.
Ross thought it was odd, but “Marcie” seemed like a good employee and the customers loved her.
The next morning, Ross confronted “Marcie” as she came to work and entered through the front door of his store.
He told her of his suspicion and of my observation as a 3rd party. Ross handed all of her personal belongings to her along with her pay check.
He said “leave now and don’t ever come back.” Ross had just fired Marcie.
What happened next was beyond belief.
“Marcie” feigned an asthma attack (she was not asthmatic). She began loudly gasping for air.
As she wobbled toward the front door, she pretended to collapse in his doorway while at the same time pretending to twist her ankle. She lay sprawled through his doorway – her feet inside the door of his shop while her upper body lay outside the doorway on the sidewalk.
She started screaming through her gasps “OMIGAWD . . . call the ambulance . . . he just pushed me through this door! Someone HELP me! HELP!”
Even though Ross was stunned, without skipping a beat, and in a thunderous voice he loudly commanded her to “Get up and leave NOW or I’ll call the police and have you charged with theft!”
As if turning off a tap, “Marcie” promptly ceased her cries, stood up, brushed off her slacks, turned on her heel and marched away with her head held high. Thankfully, Ross never heard from "Marcie" again.
So how do you avoid the "Marcie’s?" Well, the short answer is . . . you can’t!
There are all too many of them out there and they seek jobs & employers where the opportunities to steal are easy.
They think of themselves as smarter than you and they love the challenges of exploring all the angles.
They are quite intelligent actually, but not smart enough to know that there’s no such thing as the perfect crime.
Eventually they trip up and get caught. In “Marcie’s” case she was stealing in public, in front of paying customers. She was actually taking their money out of her employer’s cash register. Was that bold or what?
So if you can’t avoid such devious employees, then what?
The solution is to put policies & procedures in place that define how cash is handled in your business. In so doing, odd behavior is much easier to spot which leads to warning bells.
You don’t actually have to go out of your way to look for this kind of theft. It eventually makes itself evident.
If you have a retail business with employees who handle your cash, take note of these 8 cash register tips.
They are all preventative measures that I’ve divided into the two categories of Cash Recording Policies, and Cash Handling Policies.
They'll help reduce problems that routinely occur around the cash register.
1) Enter all purchases at the point of sale:
Our first of the cash register tips is to insist that ALL purchases be entered by your cashier through the cash register. Place them on notice up front, that any products passing their counter that have not been entered into the cash register will result in immediate dismissal with cause.
As a business owner, be sure to set a good example by paying for your own purchases as well. Too many times, if an employee sees the owner taking merchandise without paying for it, they develop a sense of entitlement as part of the corporate culture they witness you practicing. Set a good example. Pay for your own purchases.
2) All customers get a receipt:
Have you ever made a purchase where the cashier asks if you want a receipt? If you were to say no, then there’s not much stopping the cashier (or business owner for that matter) from voiding the sale and pocketing the cash. Be very wary of the employee who asks clients if they want a receipt, or even worse, if they don’t automatically give the customer a receipt with their change. In some jurisdictions, the law prescribes that receipts MUST be given. Your jurisdiction may be one of them. Regardless, ensure your cashiers issue receipts as a condition of their employment. This is one of the cash register tips that will keep your business in good standing with your customers and the government.
3) Limited access to the VOID function:
As cash register tips go, this one is most often overlooked by business owners. If an employee has access to the “VOID” function on the cash register, they have the ability to void a sale after the customer has paid and left the store. If they are able to void the sale, then they could pocket the cash.
Have you ever been to a store where the cashier made a mistake and then had to call for another employee (usually a shift supervisor or manager) to swipe their employee card, or insert a key so that the sale could be voided? Well, as inconvenient as this may be, it's actually a very good policy for preventing internal theft.
If, for some reason, your cash register does not have a void key, then I recommend one of two things. The first is to monitor all Z readings daily for signs of voided sales. If one employee has more voids than average, then keep a very close eye on them. The second recommendation I have is to change your system! Purchase a cash register that has a void key. It’s a worthwhile investment and your policies are easily changed to allow for 2-party voids.
4) Cash docking:
Cash docking refers to where your cashier physically places your customer’s money until the payment transaction is complete. You’ll want to ensure they *NEVER* put your customer’s cash IN the cash drawer before they count the change. What if your customer insisted they paid with a $20 bill but only received change as though they paid with a $10 bill? (Remember the movie Paper Moon when a young Tatum O’Neil played this trick). This is a difficult situation that is easily avoided by cash docking.
In cash docking, you insist that your cashier place, or “dock” the customer’s payment on top of the keyboard, or across the cash in the cash drawer. Afterwards, they make change while the original payment is in plain sight of both parties. Only after the customer has received their change (and receipt), does the cashier place the cash in the cash drawer. If you follow this rule, the “Paper Moon” trick is harder to pull off (almost impossible in fact). This is one of the more practical cash register tips that all big retailers use.
5) Close the cash drawer between transactions:
For two reasons this is a huge red flag for any retail business owner. First of all, an employee who does not close the cash drawer between transactions creates an easy opportunity for customers to reach across and take money out of the cash drawer. I’ve seen cases where the cashier didn't close the drawer, and actually left their station to stock a shelf. Enough said! As cash register tips go, this could also be classified under the category of safety.
The second reason is that it affords the opportunity for the employee to pull a “Marcie” and mentally calculate an order without ringing it in. It should be noted that with most cash registers, the cash drawer can only be opened when a valid sale is input, or when the cashier “cashes out” at the end of their shift. This important safeguard is easily circumvented however, by leaving the cash drawer open between sales. A BIG no-no!
6) Cash Custodianship:
Of the cash register tips that speak to employee responsibility, this is the most important. This is a policy that gives your cashier sole control, custody and responsibility for the money in their cash drawer. Under proper cash custodianship, only the cashier has access to the money. Not even the business owner should have access to the cash under this system, otherwise, how can you make the cashier accountable if the money falls short?
At the start of the shift, the cash drawer will have an initial float so that the cashier can make change. If the float was $100, and the cashier accepted $2,400 in cash during their shift, then they should have $2,500 in the cash drawer at the end. They are responsible and accountable for any shortages. A few cents, or even a one-dollar shortage during a shift is not much cause for worry, but an employee who is chronically out by $10 or $20 (or more) is a cause for concern. Either they are incompetent or are stealing.
If your retail store allows any employee “in the area” to ring in a sale, then you are leaving yourself wide open for problems (if they aren’t already happening). A good “Marcie” will cover her tracks so that you cannot trace the theft back to her. I suggest you change your policies and adopt a strict practice of cash custodianship (also covered on my blog about employee theft). Cash custodianship is one of the great cash register tips.
7) Limit the cash drawer balance with cash drops:
These last 2 cash register tips ensure tighter control over your money. It’s never a good idea to keep hundreds or even thousands of dollars in a cash drawer. There’s no need for it. It makes for a big security risk and exposes your business to both employee and customer theft.
A good cash drop policy will prescribe that the cashier remove excess cash from their draw several times a day to reduce the balance. Sometimes a supervisor will come by and count the cash with the cashier. Both will sign for it. Other times, the cashier will simply place the money in an envelope to be sealed and signed by them. When the money is removed, the value is entered into the cash register as a “Paid Out” which is described in greater detail below.
Some businesses have a physical cash drop which is a small safe cemented into a concrete floor or built into their office safe. There is a small slot through which only small envelopes can pass. These one-way cash drop systems make for good security.
8) Limit amounts Paid Out:
Every Cash register has a PO function, known as “Paid Out.” This function allows the cashier to physically take money from the cash drawer and “ring in” the exact amount so that it reflects in the cash-register tape. When they close out their register at the end of the shift, it is expected that the cash balance in the drawer will be reduced by the total of the Paid Out.
Cashiers can also use the PO function to take money from the cash register to be used for COD purchases delivered to the business. I’ve even seen business owners take PO money and use it for parking, or even worse, coffee!
Good cash management practices will clearly delineate when to use (and not to use) paid out. It might be a better policy for all Paid Outs to be first authorized or cleared by the shift supervisor, manager or business owner. Regardless, the PO function does open the door for opportunity. This door should be closely monitored.
If you think of your cash register as the central repository for money that flows into your business, its importance is soon realized. A lack of proper cash-handling policies leave your business more vulnerable. If you wouldn’t allow your employees unfettered access to your bank account, then why would you tolerate weak cash controls? By tightening up the care and control of your cash, you reduce the obvious opportunities for the “Marcie’s” of the world.
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