Sunday December 21 , 2014

LossBusters Blog

Nuggets of wisdom from Libby
Tags >> Loss Prevention
Mar 05

The Goings On After You Leave for the Day

Posted by: Libby | Comment (0)

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Dec 13

Gift Card Fraud – Don’t Let “Cloning” Spoil Your Holiday Season

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Dec 05

Charitable Collections – Taking Scrooge Out of the Picture

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Jun 25

The Extended Hours Debate from a Loss Prevention Perspective

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Jun 13

What Your Bad Employees Don’t Want You to Know

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May 30

The Hokey-Pokey Approach to Security and Safety

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May 09

The M & M Candy Test and Loss Prevention

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Tagged in: Teamwork , Loss Prevention , Libhart

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Mar 29

Your Tolerance for Cash Shortages – Bearable or Terrible?

Posted by: Libby | Comment (0)

If you lost 5% or more of your sales and it just can’t be explained how it occurred, would it bearable or terrible to the financial health of your business?  Shortages in cash may be somewhat understandable.  Cashiers handle cash transactions, credit cards, gift cards, checks, traveler’s checks, and any number of discounts and coupons.  When transactions go awry for some reason, they must void, no sale, refund, discount, or reduce the price in some way.  During interactions with the public they may encounter attempts at credit or gift card fraud, bad checks, counterfeit, price changing, quick change schemes, drive-offs, walk-offs or some other new scam of the day.  The cashier is expected to know all of these transactions, handle them flawlessly, and yet have a perfect cash drawer at the end of the shift. 
But what if they don’t?  What if the cash is short?  And how much does the cash till have to be short to get your attention?  Some owners and/or managers create a policy that shortages must be paid back.  There are many reasons why this is not a sound policy, and against the law in some states.  Frequent cash drawer overages are not desirable either.  Overages may be indicative of poor cash management or worse, manipulation of the cash operation and theft.

So, what amount of cash shortage, or overage, is acceptable within the framework of your business?  Knowing that a perfectly balanced cash drawer is not practical in a blind remittance procedure, what is bearable?  More importantly, are cash handling policies written, performance expectations clear and disciplinary actions for excessive cash overages and shortages fair and consistent?

Establishing “Bearable”
•    Policies and procedures - Establish written policies, procedures, and expectations in handling transactions.  They should include before and after shift count verification, single drawer accountability, manager authorizations for voids, refunds, over rings, and closing the cash drawer after every transaction.  Calculators and unauthorized credit cards “skimming” devices near the cash registers must be prohibited and stated in policy.

•    Blind remittance – At the end of their shift, cashiers should not be privy to cash totals on the ‘Z’ tape as they countdown their cash till.  They should report what they have in their till, minus the beginning bank.

•    Communicate Expectations – Communicate cash management and security related expectations via written memo, employee handbook, and as part of everyday operations.

•    Signed cashier policies – Have every cashier sign cash handling expectations. Retain in their individual personnel files.

•    Making Change – Teach cashiers the habit of counting back change to the customer.

•    Cash shortages and overages – Establish a tolerable dollar amount of cash shortage or overage.  Some companies have established a $3-5 range per individual cash drawer per cashier depending on the number of cash transactions and total sales per shift.  Set an aggregate amount over the course time as well; i.e.  .1% of sales each month.

•    Establish acceptable level of exceptions – Set acceptable performance standards in the number and dollar amount in percentage to sales for voids, over rings, refunds, no sales, check average, and others that are pertinent to your business.

•    Cash drops – Managers should remove excess cash and large bills from the cash register and place in the safe.

•    Train – Train cashiers on how to handle all transactions, including handling suspected counterfeit, and the common scams involving credit/gift cards and quick change.

After policies and procedures are established, expectations are clearly communicated, and cashiers are properly trained, it’s time to routinely evaluate their performance.  Emphasis should be placed on operating the cash function with minimal errors.  When errors do occur and the cash handling performance is not within established guidelines, the appropriate action should be taken to correct the behavior or performance and get them in compliance.  If the individual cashier’s performance is routinely outside of the established acceptable performance levels, they move into “terrible” and must be dealt with accordingly.

Dealing with Terrible
•    Formal cash management reviews - Establish a formal cash management performance review process.  (Daily, Weekly, Monthly)

•    Progressive Discipline – Implement progressive discipline process consisting of warnings, written reprimands, and terminations for poor cash handling performance that is not in compliance with acceptable standards.

•    Investigations – Investigate large unexplained shortages or overages to determine the cause. Unexplained large discrepancies should enter the progressive discipline process at a higher, more serious level, i.e. Suspension, Termination.

•    Retrain – Retrain cashiers that are not in compliance with performance standards.

•    Reassign – Reassign cashiers that are not in compliance with cash management standards to a non-cash position, if available.

•    Policies and procedures – Reevaluate policies and procedures relating to cash management, security processes, and disciplinary measures and make adjustments according to the needs of your business.

Handling customer transactions is a tough job, even for the most experienced, conscientious cashier.  Mistakes happen and unexpected shortages and overages occur.  The key to successful cash management operations is to have sound policies and procedures, clear expectations, routine audits, and fair and consistently applied progressive discipline.  Your shortages will quickly respond from “terrible” to “bearable”, increase profitability, and make you more competitive in the marketplace.

For more information on security, safety, loss and crime prevention for restaurants, visit www.LossBusters.com. For daily tips on restaurant loss prevention, follow on Twitter @LossBusters

Jan 26

A Forgotten Key Strategy in Avoiding Menu Price Increases

Posted by: Libby | Comment (0)
Tagged in: Loss Prevention , Libhart

It’s tough to run a restaurant.  We’ve taught customers to be value driven in their selections in eating out.  The rising commodity prices continue to challenge restaurant operators providing the value customers seek balanced with profitability.  In the article, “Study: Restaurants avoiding menu price increases”,  Brad Moore of SpenDifference stated that commodity prices, on average, topped 2% in 2012.  In 2013 commodity price increases are expected to top 3% and some proteins going up more than 15%.  The article notes strategies that operators are taking to counter higher costs.  They include:

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Dec 12

21 Business Security Tips for the Holidays

Posted by: Libby | Comment (0)

The holiday season has arrived which means restaurants and stores are busy with hungry shoppers. Gift cards are a popular choice and the majority is purchased during the season. Fortunately, the season brings increases in sales and more people are paying with cash. Unfortunately, cash is a target for dishonesty from both internal and external sources. Robbers target restaurants and stores with lax security and untrained employees. Restaurants and stores may also fall victim to their own employees. Managers frantically trying to keep up with the frenetic pace of the holiday season may take shortcuts in an otherwise strong security and loss prevention program.

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