Any business that accepts cash for transactions has come to expect that some percentage of it will vanish as a result of fraud, administrative errors and employee misdeeds. Inventory shrink, which includes cash loss, costs retailers an estimated $47 billion annually. It is so prevalent that retailers have a line item for it in their P&L statement.
Retailers can no longer simply shrug off cash loss, even if it has reached the “cost of doing business” status. Like any cost, it has to be addressed and – if possible – reduced. Individual retailers tend to downplay shrink for fear it creates a negative image, but the industry makes a concerted effort to measure shrink and address cash loss by trying to reduce internal theft. Since a majority of a retailer’s cash handling takes place at the point of sale (POS) or service desk, naturally, the effort to stop employee theft largely focuses on the checkout areas.
Indeed, retailers can substantially eliminate their cash loss with the right technology at the checkout. For instance, intelligent cash management solutions provide an affordable approach to prevent loss. Solutions that keep track of transactions, cashiers mistakes. When linked to analytics systems, intelligent cash management solutions can provide key data points to improve cash management accuracy.
Using technology to tackle theft and mistakes at the POS will not totally eradicate shrink for retailers, considering administrative errors and inventory shrink caused by fraudulent actions also contribute to the problem. However, technology that makes cash handling transparent and more accurate is instrumental in reducing cash loss, as much as 90%.