POS Security: How to Protect Your Retail Store Against Employee Theft

Employee theft is a significant threat in the retail industry. According to the Retail Council, an estimated 566,000 cases of employee theft go undetected each year in Canada. 

In 2022, the average shrink rate in retail rose to 1.6%, up from 1.4% the previous year, with external and in-house theft accounting for 65% of this shrinkage.

These rising numbers highlight a growing problem. Not only does employee theft affect the bottom line, but it also undermines trust within the retail environment. 

The solution? 

Leverage modern technology to monitor cashier activity and reduce theft. By implementing advanced Point of Sale (POS) security measures, retailers can protect their businesses and ensure a safer, more secure retail environment.

How monitoring cashier activity reduces shrinkage

Cashiers handle several transactions daily, making them pivotal points where potential theft or errors can occur. Closely monitoring cashier activities helps you quickly spot and address problems that contribute to shrinkage. 

Here are three key benefits of monitoring cashier activity proactively:

1. Reduces employee theft

Imagine a scenario where a cashier is tempted to pocket cash from the register during their shift. Without monitoring in place, they might feel tempted to carry out this dishonest act.

However, with advanced POS security systems in place, the story changes. As the cashier rings up transactions, every action is being closely tracked and recorded. The cashier knows that any suspicious behavior will be quickly detected.

With this level of monitoring, the risk of employee theft is significantly reduced. Cashiers are less likely to engage in dishonest behavior when they know they’re being watched, leading to fewer instances of shrinkage and greater overall profitability for the store. 

2. Increases transaction accuracy

Ensuring transaction accuracy is essential for reducing shrinkage because even small discrepancies can add up to significant financial losses over time.

When cashiers are aware that their actions are being closely monitored, they are more likely to ensure that each transaction is recorded accurately and honestly. This level of accountability minimizes errors such as incorrect pricing, undercharging, or overcharging customers.

For example, if a cashier consistently rings up items at incorrect prices or fails to scan items properly, these issues can be promptly addressed. This level of oversight improves the overall accuracy of transactions and helps prevent losses due to unintentional errors or fraudulent activities.

3. Improves operational efficiency 

Monitoring cashier activity allows managers to identify bottlenecks in the checkout process and implement measures to reduce wait times, improving the overall customer experience.

For example, you can analyze sales patterns to determine peak hours and adjust staffing levels accordingly, ensuring that the right number of cashiers are available to handle customer demand. 

Secondly, it enables you to detect and address any issues or inefficiencies in real time. For instance, if a cashier is taking longer than average to process transactions, you can provide additional training or support to improve performance. 

By leveraging data and insights gathered from cashier activity, retailers can make informed decisions, optimize processes, and enhance the overall effectiveness of their operations. 

This reduces shrinkage by minimizing errors while ensuring the business runs efficiently, ultimately driving profitability.

Leveraging modern technology to prevent employee theft

Traditional methods of preventing theft, such as manual monitoring often fail to effectively detect and deter dishonest behavior. This is why retailers are turning to modern technology as a solution to combat employee theft and protect their bottom line.

Modern technology solutions such as advanced POS systems, video surveillance cameras, and data analytics tools provide retailers with the means to detect suspicious behavior, identify theft patterns, and take immediate action to mitigate risks.

Let’s understand how you can leverage modern technology to address employee theft in retail stores. 

Surveillance systems

Surveillance systems can cover every corner of the store, including aisles, checkout counters, and storage areas. This comprehensive coverage ensures that no area goes unmonitored, reducing blind spots where theft could occur unnoticed.

Take cloud-based surveillance systems, for instance. 

Unlike traditional CCTV systems that require on-premises hardware and infrastructure, cloud-based solutions are hosted and managed remotely, freeing you from the constraints of physical hardware. 

This means that you can easily scale your surveillance capabilities to accommodate changing business needs, such as expanding to new locations or adjusting coverage areas within the store.

POS integration

Integration with POS systems further enhances the effectiveness of cloud-based surveillance in combating employee theft. By integrating surveillance footage with POS transaction data, you can gain valuable insights into employee behavior and identify correlations between sales transactions and suspicious activities captured on video. 

For example, discrepancies between items scanned at the checkout counter and those captured on video footage could indicate instances of employee theft. 

By correlating POS data with surveillance footage, you can strengthen your evidence collection capabilities and improve your ability to detect and prevent employee theft.

Additionally, cloud-based surveillance systems integrated with POS enable real-time monitoring and alerting capabilities.

Cloud-based systems generate real-time alerts for specific events, such as unauthorized access to sensitive areas or unusual transaction patterns, enabling you to intervene promptly and prevent potential losses.

Get peace of mind with Magstar + Solink

Magstar understands that security and loss prevention are paramount concerns for retailers. That’s why we’ve partnered with Solink, a trusted provider of cloud video surveillance systems, to offer retailers an integrated solution for enhancing security and preventing cash-related issues.

With Solink’s cloud video surveillance systems seamlessly integrated with Magstar’s POS, retailers can enjoy electronic video oversight to help detect and deter deliberate inaccuracies at the till. 

This powerful combination allows you to: 

• Monitor cashier activity in real-time
• Identify suspicious behavior
• Take immediate action to prevent losses

Together, Magstar and Solink provide you with the peace of mind to focus on running your business while safeguarding against potential threats.

Request a demo to learn more about how our partnership can benefit your operations.