12 Transaction Types Business Owners Can Monitor to Reduce Loss

 

As a business owner, opportunities for loss seem to be lurking around every corner; food waste, competition, customer complaints, employee theft, etc. In this article, we’re going to help you protect your bottom line by identifying and monitoring the transaction types most commonly associated with employee theft. Increase revenue by 7% or more by stopping employee theft in its tracks. Even among your most trusted staff members, 75% of employees admit to stealing from their employers at least once. Don’t let your business be one of the 33% of company bankruptcies caused by employee theft.

How do employees steal?

The easiest way for an employee to get caught while stealing from the register is not giving customers change for cash transactions. It’s just a matter of time before customer complaints catch up to them. Employees who are trying to steal from you will work to find ways to open the drawer manually and count out change on cash paid transactions in order to give guests the change they are due (so as not to raise any red flags with the customer), and will then either modify the transaction in some way (like with a void or discount) so that it doesn’t factor into what the Point-of-sale (POS) system calculates the drawer should have. Often the employee will keep record of how much their drawer is running over in cash, and then take that cash out at the end of the day.

Below are a list of suspicious transaction types you should be on the lookout for to prevent employee theft of cash in your restaurant or retail establishment:

Transaction/POS Data

Transaction Types

Risks

Refunds / Over-Rings

 

Refunds and over-rings occur when an employee is processing falsified refunds. Identify suspicious refunds and over-rings by looking for refunds with no prior matching transaction or refunds with no customer present.

Discounts / Comps / Promotions

 

Often times, it’s all too easy for employees to use discounts or comps to sweet-heart, under-ring or adjust inventory. Imagine an employee applies an 80% off promotional code to multiple transactions for friends or comps extra items.

Voids / Cancels

Similar to refunds and discounts, cancelling or voiding items from a transaction can reduce the dollar amount of a transaction and allow an employee to sweet-heart or under-ring.
No Sales

 

Employees can use the ‘No Sale’ function to open the drawer to take cash or conduct transaction without ringing in the POS.

Low Dollar Transactions

 

Employees can ring a low dollar item, instead of charging for an item’s full value, to sweet-heart or under-ring. Imagine an employee charges themselves or a customer for a $2 coffee instead of a $5.75 latte with soy milk.

Long Duration Transactions

 

Long duration transactions can be cancelled, voided, or comp’d after the customer pays (includes reopened transactions). Look for long duration transactions as a warning sign for potentially suspicious activity.

Cars without transactions

 

A car goes through your drive thru without transaction. This could be for legit reasons, such as they need a straw or forgot an item, but sometimes they can be fooling the timer, under – ringing, no ring and sweet-hearting.

Transaction gap

To identify a transaction gap, look for a lack of transactions during a rush time, or lack of transactions during your normal open hours. For example, a gap in transactions between 5-6pm during your daily dinner rush or no transactions reported after 9pm when your business is open until 10pm.
Payment Type: Cash, Credit and or Gift Card

 

All of a sudden when a drive thru has zero cash transactions for a period of time, especially if you can connect this to a transaction gap, you might have an employee stealing.

Exact change

 

Very few customers pay with exact change, so if there is a large number of these transactions it can indicate a potential theft or training issue.

Reopen after Tender

 

Transaction is reopened, refund or discount is applied to that transaction without the customer being there. So now if the customer paid $20, you discount to $10, now the drawer is over $10 and you can pocket that.

Multiple refunds by same credit card

 

A lot of people think cash refunds are the only type of refund risk. Not true! There are also credit card refunds. Employees can do refunds to their own credit card. Most restaurants only store the last 4 credit cards for PCI compliance/cybersecurity reasons, but if you have 10 refunds with the same last 4 credit cards in a row it is likely theft. Can corroborate with video to verify.

Exception Reporting Tools Identify Suspicious Transactions

Because there are legitimate reasons for voids, discounts, deletes, drawer pulls, etc… it is difficult to simply review a list of transactions to determine whether theft or fraud was occurring. The best way to identify these instances is to use an exception reporting tool that aggregates your transaction data and reports back to you when there are an unusual number of the following transaction types among any given store or employee.

Learn more about exception reporting from Envysion