With today’s modern technology solutions—and in an economy where every dollar counts—there’s no reason stores should endure employee theft.

Thanks to advancements in integrated point-of-sale (POS) systems retailers are not only reducing shrink, but are able to reward customer loyalty in real time, speed up the foodservice line, upsell products to boost incremental sales and mine valuable market basket information. But they have to be willing to make the investment, and wisely. If they do, the positive results could come quickly.

For example, when E-Z Stop Food Marts Inc., a 22-store chain in east Tennessee first combined its Gilbarco Passport POS system with text inserters, GE Storesafe DVRs and a tracking program its IT manager created at 7:15 a.m. on an otherwise dull morning, the chain caught a thief by the time Donna Perkins, POS/pricebook manager arrived at the office at 8 a.m.—just 45 minutes later. Results don’t get much quicker than that.

“Before then we had not been using the Passport as a security-type device,” Perkins said. “We added a script that our IT manager wrote that pulled the refunds and voids and allowed the supervisors a highly targeted timeframe to search on in order to pinpoint theft.”

The DVR shows each transaction as it takes place, and the text inserter that runs along side the video shows the Passport journal that records the actual cash register transaction. This allows store supervisors to look at both simultaneously and make sure what’s being recorded on the register is actually what’s being sold or refunded at the counter.

But what helped the most, Perkins said, was the ability to poll data based on keywords—such as refunds, voids, no sales, rings under 10 cents, or according to product category. What’s more, E-Z Stop’s  IT manager runs the files from the Passport system—including sales refunds and voids, and then emails those automatically to the store supervisors.

The system also allows for remote monitoring. “If there is a concern in a store about a beer shortage, a store supervisor can actually sit home with a laptop and search beer sales to very easily find the problem,” Perkins added. 

E-Z Stop’s shrink currently runs about .45% of sales. Before adding the integrated POS features shrink was still below 1%, but the major benefit was the way it saved supervisors time. Before, supervisors would have to spend hours scrolling through journal tapes and taped video transactions to line up a timeframe to catch a thief, but now they have the option to search quickly.

“The real bonus for us was improving our supervisors’ work experience and allowing them to focus more on operations and not just on shrink,” Perkins said. “If they’re just focused on shrink they can’t be focused on marketing and store operations and how well the store is stocked, which is where we want their focus to be.”

E-Z Stop, which does not currently have a loyalty program, also uses its POS system to reward Speedpass and Exxon branded cards with three cents off per gallon and discounts any car wash purchase at the pump by 10 cents per gallon. “Using Passport’s capabilities we’re able to be competitive without a full-on loyalty program,” Perkins said.   

More importantly, E-Z Stop found that there’s a solution for chains of all sizes. “We are very fortunate to have a very intelligent IT manager who also does programming and that the owners of this company believe in investing in quality people,” Perkins said. “The lesson we learned is if you’re a small chain you can’t get these results yourself. You need the right people and the right solutions to be successful.”

Better Business in a Flash
In an effort to obtain real time store-level POS data, Waycross, Ga. –based Flash Foods, which operates 173 stores in Georgia and northeast Florida, added Pinnacle’s Enterprise Management solution. Like E-Z Stop, it integrated digital surveillance with its POS to reduce employee theft.

In order to gain customer loyalty and brand awareness Flash Foods also implemented Pinnacle’s Loyalink solution to integrate with its Rewards in A Flash. The chain now receives about 45,000 hits per day on its loyalty server from customers by offering them special discounts and promotions.

As a result, Flash Foods increased sales in all categories and finds that loyalty customers spend up to $1.50 more inside the store than non-loyalty customers. Dale Williams, director of quality assurance and internal control for Flash Foods Inc., estimated 30% of all its transactions are now made using the Rewards in a Flash card.

Using the integrated system, Williams can see how each item is selling, find peak shopping times and execute a market basket analysis to effectively upsell customers on future transactions.

To better manage employee theft, the system allows managers to view a six week associate performance dashboard display that compares all employees and grades them by showing the number of sales, voids and returns each employee tallied. “Some stores may have 12 employees. If there’s a problem it can be hard to pin down who to look at, but this give you a starting point,” Williams said.

Going Digital
Flash Foods also uses a digital surveillance system that has a built in audio recorder to document each transaction. Weekly reports show audio and text alongside a digital screen with a video so managers can balance what customers left the store with versus what cashiers actually rang up and put in the cash register, or if a void was posted once the customer left the store.

“It may appear sales are skyrocketing, but if you look at all these factors together you might find that’s it’s not just sales moving out the door,” Williams said. “We can identify thieves and get them out of our stores.”

While removing the no-sale button might seem like one easy option to deter employee theft, Williams warned that a determined thief will find a way to open the drawer anyway. A more effective solution is to provide your managers with a solution to prevent theft.

Scan Control
Williams and Perkins agreed that category managers should try to get a bar code on as many items as possible. The more items that require a scan, the better companies can combat theft.

“Using an open key increases the amount of things a cashier can under ring, giving them an opportunity to take some of the money,” Perkins said. “A good cashier that has been doing this a long time will know a candy bar that is 99 cents comes out to $1.09. So they could ring it at 79 cents, but tell the customer $1.09, and then pocket the extra 30 cents. That’s a small amount, but if they do that on a 12-pack of beer it could be a much higher amount they pocket.”

Closing as many departments as possible by making them scan-only forces employees to scan the item and denies them the ability to open ring, thus decreasing theft. “We close every department we can including lottery. You have to scan every ticket. It makes it harder for the cashier to steal,” Perkins said. “We even scan deli at a couple of our stores. The bottom line is to use the technology at your disposal to keep your stores as profitable as possible.” CSD