Any savvy retail store owner or operator understands the key metrics driving the success of their business: ‘What are our total sales?’ ‘What are our labor costs?’ ‘What are our profit margins on products?’ While getting answers to these questions is relatively straightforward, what about those unusual situations that might not add up? Do your calculations ever reveal unexplained income or missing inventory? To gain a detailed understanding of what’s happening within your store, you need to delve deeper and utilize retail exception reports.
Exception reports are a game-changer in the world of retail, helping you identify anomalies, outliers, and irregularities within your business operations.
According to the 2021 National Retail Security Survey: In 2020, retail stores, on average, had to deal with about 362 situations where they caught employees stealing and 527 cases where they had to let employees go because of theft. Each time they caught an employee stealing, it cost them around $1,551.66. Keep in mind that because of inflation, this cost is likely even higher in 2023. (Loss Prevention Media)
What is exception-based reporting in retail stores?
Exception-based reporting involves sifting through vast amounts of data to spot outliers and irregularities. As a retail store owner or operator, manually combing through hours of data isn’t practical. This is where specialized retail exception reporting tools come into play, streamlining your operations to ensure nothing goes unnoticed.
Retail exception-based reporting offers a comprehensive financial perspective, revealing where your capital (inventory or cash) is going. Thanks to technology, retail store owners and managers can connect point-of-sale (POS) data to profit and loss. Unfortunately, losses can occur in various ways within retail, making it essential to employ a tool that automatically monitors transactions against inventory and costs to uncover any losses. Exception reporting provides visibility into potential losses.
Here are four retail exception reports you should review daily:
1. Daily Transaction Reports
While reviewing standard sales reports is essential, a more in-depth analysis may uncover sales anomalies that warrant further investigation.
2. Voids, Exchanges, and Return Retail Exception Report
Examine voids, exchanges, and returns to identify excessive occurrences. Cross-reference these by location, shift, and staff member to detect any trends.
3. Discount/Gift Cards Redemption
Review these transactions from various angles to spot inconsistencies, such as irregular redemption amounts or multiple redemptions by a single staff member.
4. Rewards Program Retail Exception Reports
If you offer rewards programs, scrutinize them for potential staff theft. Ensure rewards are calculated correctly and accurately reflected on customer receipts.
These retail exception reports not only provide an overview of your store’s performance but also highlight any unusual activities that require further scrutiny. With exception-based reporting, you have the tools to analyze various data points within your retail business, allowing you to create reports for the entire enterprise, individual locations, or specific employees.
The Value of Exception Reports
A retail exception-based reporting system can enhance your ability to detect and prevent potential fraud. Industry experts estimate that an exception-based reporting solution can achieve a full return on investment (ROI) within a year.
With Envysion’s Exception-Based Reporting, you can access trends through an easy-to-read dashboard format. Additionally, you can delve deeper into the data by reviewing video and receipt activities simultaneously, as the transactions occurred. This robust system offers higher visibility into your daily business operations and performance over weeks and months, providing:
- Real results: Replace the manual review of spreadsheets and receipts with a data-driven approach.
- Targeted metrics: Run exception reports at any time using a variety of parameters.
- In-depth video analysis: Envysion combines reporting metrics with video and audio history to authenticate highlighted activities.