How to stop your employees stealing
Hotelier Middle East Staff
April 18th, 2012
The pace of business within the hospitality industry is fast-moving, especially when it comes to restaurants and bars. Customers demand quick service and make frequent transactions; it can be hard to keep up.
Add to this the threat of your own employees’ theft activity at the point of sales (POS), which, I’m sorry to say, is frequent. But, loss prevention solutions and exception-based reporting can make a world of difference.
Statistics show that fraudulent POS activity can account for an average of up to 4% of sales. That means that one in every 25 transactions per point of sale could prove costly to your business.
Large hotels, restaurants or entertainment venues usually have numerous POS terminals within a facility, which could translate into a huge number of fraudulent transactions every day.
Even more startling, it is estimated that 60% of losses can be tied to employee theft. Fraudulent activity is nothing new; in fact, we’ve been in the business of preventing it for almost 20 years. However, the tools for tracking and preventing these fraudulent incidents are better than they’ve ever been.
We work on analysing data from a completely different angle, which can lead to huge savings. Losses in the food industry can be particularly hard to detect, with a fast-paced environment, which can lead to mistakes, misallocations or outright theft.
Exception-based reporting has proven itself in the hospitality and retail industries, reducing loss, increasing productivity and improving food cost.
Fraudulent transactions can take many forms in the industry, from line-voids, negative checks or returns, tip fraud, under-ringing, zero amount transactions and more. The reasons for these occurrences vary and can be caused by anything from training or compliance issues to employee fraud.
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Let’s look at an example: A customer at a major coffee chain orders a small coffee with a shot of hazelnut flavouring. The coffee costs US $3.50 and the shot costs $0.25.
The employee behind the counter knows the exact change for this transaction every time. They charge the customer the full amount, ring only the flavour shot and pocket the $3.50.
Do that 10 times in one shift and the employee will make more off your POS cash drawer than what you pay them to work the shift. This is an example of under-ringing. With exception-based reports, these instances can be tracked, recorded and you can take corrective action.
With exception-based reports, data can be filtered down to terminal, an employee or transaction-levels. With these specific details, problems can easily be addressed. When employees are confronted about fraudulent activity, many will admit to some theft.
However, statistics show that you need to consider the 11.5 Factor. The 11.5 Factor suggests that the average amount of theft admitted by employees should be multiplied by a factor of 11.5 to find the true amount of theft. Therefore, if an employee admits to $100 of theft, the true figure is likely closer to $1150!
With all this talk of employee theft, you may be concerned about your own staff. This is not to say that all employees are dishonest. The benefit of exception-based reporting is that the numbers don’t lie; you simply need to look at them.
Additionally, having a loss prevention system in place may be enough by itself to deter potential thefts. Six out of 10 employees will determine their likelihood of reporting or committing fraudulent activity based on whether their employer has a system to track exceptions, or depending upon the way fraudulent activity is viewed within the organisation’s corporate culture.
In an ever-changing environment, loss prevention and exception-based reporting can prove highly valuable within the global hospitality industry.
With a rapid return-on-investment and settings that can adapt to the user’s needs, a loss prevention solution can help move your business forward.
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The benefits of Micros-Retail’s XBR
Micros-Retail’s XBR (Exception Based Reporting) loss prevention and analytics solution has been an industry leader for nearly 20 years.
With state of-the-art reporting configurations and adaptable multiple-language support, it is a flexible global solution designed to meet a variety of hospitality and retail needs. The vast majority of our clients see a 100% return on investment within the first 12 months of using our solution.
XBR is easily configurable to meet the needs of every specific client. XBR reports can drill down to specific details within seconds, working with our easy-to-use dashboard.
New users can easily manipulate basic reporting functions, with more advanced reporting features available to experienced users.
XBR has a long legacy of retail success and has quickly established itself as a leader in the hospitality space. Micros-Retail has been aggressively implementing XBR for hospitality throughout the Middle East, including in the luxurious new Atlantis, The Palm resort in Dubai.
With many different revenue centres throughout the resort, Atlantis, The Palm is well on its way to seeing a rapid return on investment.
Alshaya is also expanding its presence in the Middle East and turned to Micros-Retail’s XBR for its loss prevention needs.
Since implementation, Alshaya is already seeing a decrease in the losses of upwards of 20%. As the expansion continues, that number is expected to rise.
With XBR for hospitality, clients can reduce food costs, as well as administrative and labour costs. Employee fraud is quickly identified and compliance and training issues can be addressed early on. Additionally, operational costs can be reduced with the efficiency provided by options such as auto-distribution.
Micros Systems, Inc. provides enterprise applications for the hospitality and retail industries worldwide. More than 330,000 Micros systems are currently installed in table and quick service restaurants, hotels, motels, casinos, leisure and entertainment, and retail operations in more than 180 countries, and on all seven continents.
In addition, Micros provides property management systems, central reservation and customer information solutions under the brand Micros-Fidelio for more than 26,000 hotels worldwide. Visit www.micros.com or www.micros-retail.com for more information.