What is Retail Fraud?

November 12th, 2007

Retail crime in the UK is estimated at well above the £½ billion mark per year. 80% of retail fraud is at point of sale, i.e. till fraud.

Retail businesses lose an average of 1% to retail fraud each year. Research shows that 25% of employees are totally honest, 25% are totally dishonest, and the remaining 50% are swayed by opportunity.

Many members of staff do not regard consuming goods or taking goods for personal use as theft, but as perks of the job.

Till fraud is totally predictable, and is a function of the degree of security employed. Awareness significantly reduces your risks. If you operate tills, all your staff must be vetted, monitored and spot checked at all times to ensure that risks are kept to a minimum.

Detection methods must be robust, resilient and adequate if they are to combat the scourge of rogue staff perpetrating till fraud. Once theft or fraud is detected, the culprits must be caught sooner rather than later, and sanctions imposed within the limits of the law.

CATEGORIES OF TILL FRAUD

• Sweet-hearting: An accomplice (“sweet-heart”) presents expensive items for purchase. The till operator either rings up the items at a lower price, or fails to register items altogether. This type of loss shows up later as “shrinkage”.

• No Sales/Void: “No sales” purchases accumulate a cash surplus in the till, which is then removed by the end of the shift. “No sales” should be exceptional items, and should be checked, in particular towards the end of the shift. This, however, makes heavy demands on management time, which gives rogue staff the  opportunity they are looking for. Voids are a variation of “No sale”, with a genuine purchase cancelled after the client has left the premises. The surplus is removed from the till by shift end.

• Returns and Refunds: Items of stock are removed from the shelves and presented to the till for refund. Cash is paid to an accomplice (sweet-heart) or to the till operator.

• Substitute Scanning: Where checkouts are equipped with barcode scanning devices, the operator passes two items over the scanning device at one time so that only one item is recorded (normally the low value item).

Posted in Retail Fraud Prevention |