How Integrated Payment Processing Helps Prevent Employee Theft
What are integrated payment solutions?
An integrated payment solution is one where card payments (credit cards, debit cards and gift cards) are swiped at the Point of Sale (POS) terminal or at a separate console that is still linked to the POS. If, when an employee totals a transaction and selects the payment type as being a card, the value due appears automatically on the payment terminal where the card is swiped, then the system is integrated. If it has to be keyed in manually by an employee before a card is swiped, then it is not integrated.
Why aren’t payment systems integrated?
Credit, debit and gift card processing fees can be costly for merchants. Often, a new provider becomes available that has lower transaction or monthly subscription fees, but does not integrate with a restaurant’s existing POS. Similarly, a restaurant owner may purchase a new POS, but have a pre-existing relationship with a credit, debit or gift card processor. Alternatively, but perhaps as common, restaurants may simply have long term contracts that can’t be broken. Or they have thousands of gift cards in the market with one provider and now isn’t the right time to have to run two systems (one for already issued gift cards and one for all the new ones).
How do integrated solutions prevent theft?
Having your payment processing solution integrated with your POS is a key step to preventing theft. The fact that employees know this is the case is often a strong deterrent in itself. Many types of employee theft at the POS rely on burying a single suspicious transaction, within many legitimate ones. Simply put, integration makes this much harder to do. To read more about some methods dishonest employees use to do this, check out these three posts on spotting theft, gift card theft and preventing theft at the POS.
A real world example
I once worked for a company that discovered the hard way why integrated systems are important. In this case the theft took a long time to catch, because the employee was a janitor, not someone we would have normally tracked for suspicious activity. At this organization, managers printed end-of-shift reports from the payment processing machine. When this was done, the machine was reset to a $0 total for the next cashier’s shift, but was not consolidated.
Another employee would go to the machine at night, print a consolidation report, see what was sold, and refund purchases directly to their (anonymous) credit card. Then they would run the end of shift report, ensuring the next cashier using the machine would be starting at $0. This type of theft is easy to do and often not noticed until a month or more later when the bank begins questioning the refunds. Even once this happens, there are no slips or records of the refunds, making it hard to determine what occured. A smart thief will do this with smaller amounts, reducing the likelihood they’ll be noticed.
How to prevent theft when you don’t have an integrated solution
If you cannot implement an integrated solution, consider using a product like LiveAnalytics and LiveCashManagement, which are designed to make it easier to spot suspicious behaviour. Products like this include pre-made reports that you can run to show transactions that should be investigated. Here are some other simple steps to take:
- Enforce the use of the “Tender Type” button. If each transaction is not recorded as the proper tender type, it makes theft much more difficult to track
- Ensure each merchant copy of a card payment slip is stapled to a receipt for the corresponding transaction and placed in the till.
- Ensure that payment processing machines are batched off at the end of the day and the total amounts for the day are recorded.
- Use all the safety features payment processing machines have to offer. Lock the machine with a pin when not in use, especially overnight.
- Make it mandatory that a manager be present for all refunded purchases
How are you implementing cash management best practices at your restaurant? Get in touch with us at email@example.com and let us know. Or learn more about how Livelenz helps make restaurant cash management easier here.
Image Source: A Flickr Creative Commons photo by Jean-Etienne Minh-Duy Poirrier
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