Handling Cash

In a 2014 survey, “Measuring progress toward a cashless society,” MasterCard found that, while most Canadians use debit or credit cards, cash accounted for more than 40% of consumer transactions. In liquor stores, cash still reigns supreme among many types of customers, including those with a criminal bent. Cash theft is a threat from both within and outside store doors.

Dan Newman, owner of Calgary-based Newman Loss Prevention Solutions, confirms that some customers who use cash may be the bad guys. “The amount of currency used is going down, but the challenge for liquor stores is that their clientele are not always upstanding citizens.”

Fortunately, loss prevention experts offer an arsenal of solutions, tips and tools to help liquor retailers combat the internal and external risks of cash theft.

Preventing Deception from Within

When hiring, Newman advocates that store owners and managers diligently check references, since resumes don’t always reflect the reasons for past firings or job moves.

Closed Circuit TV (CCTV) cameras—even mirrors―mounted where employees and customers know they are being watched can be an effective theft deterrent, as well as a safeguard for both store owners and their employees. Newman recalls an employee who was under suspicion when a $600 cash drop didn’t make it to the safe; she was later exonerated by the store’s video surveillance footage.

Smart technology offers another layer in protective money handling. Intelligent cash handling equipment can do everything from accurately counting cash and detecting counterfeit bills to creating an audit trail and tracking individual employees’ cash drops.

Brad Koltai, president of a security firm in Calgary, has a combined 28 years of experience in law enforcement and corporate security investigation. He suggests liquor retailers build a first line of defense to reduce internal shrinkage through policies and procedures. “Training deters internal theft,” he stresses.

Most importantly, though, his mantra for retail employers is “audit, audit, audit.” He’s a huge proponent of smart cash management systems that track and reconcile every transaction by employee.

Investigate, track, and verify overages and shortages, and make employees accountable for them.

“Develop a cash handling policy and make sure staff sign off on it,” he stresses. “Take discrepancies seriously. Investigate, track, and verify overages and shortages, and make employees accountable for them.”

In Koltai’s experience, he’s seen how effective low-cost, in-house procedures can be. “When retailers post notices in the staff room about theft, it actually has an impact.” He’s seen success when employers offer an internal awards program, for example, offering a $500 award to employees who provide information leading to the arrest of employees who are stealing.

Theft-proofing Processes and Equipment

Retail Business Security Self Assessment, a loss prevention handbook published by the Retail Council of Canada and RBC, offers other tips for cash handling: limit cash-back requests, keep a limited amount of cash on the premises, and retain as little cash as possible in the register by moving it to a more secure place at random times during the day.

Ideally, a digital security cash drop safe should be installed under the counter at the POS area and bolted to the floor. It’s a reasonable expense, ranging from less than $100 to $400 installed.

Safes with theft-proof features can stop unauthorized access. “Some have different mechanisms, including slots that prevent fishing bills out,” says Ravinder Sangha of Halo Metrics.

Innovative POS software is also available that will alert staff or owners when it is time to do a cash drop. Unfortunately, says Newman, most don’t do that. “Only about 15-20% of the capability of software is typically used,” he laments.

Newman recommends installing a secondary safe in the back of the store with a digital combination lock that only owners or managers can access. “It’s really important to have a good safe in the office, at least 3 feet by 3 feet, too big to steal, and bolted to the floor.” The rule is to change the combination each time there is a staff change.

The Lurking Threat of Thieves

Fast-talking, quick-change artists often prey on young, inexperienced staff. “When the cash drawer opens, put the bill on the drawer,” Newman counsels. He suggests that owners have staff do a basic math test before hiring them. “Cashiers need to have decent math skills to get away from quick-change artists. It’s a problem if they can’t do math without a calculator.”

A digital security cash drop safe should be installed under the counter at the POS area and bolted to the floor.

Now that Canadian bills are polymer-based with holograms, they are not easily duplicated; however, counterfeit bills still find their way into tills. “Train employees in what is good money and what isn’t. For me, it’s all about the feel, the texture of it,” explains Newman. When employees suspect cash isn’t good, he suggests they tell the customer, “I’m sorry we don’t take American money.” Or if it’s a Canadian bill, “I’m sorry, I need to call my manager on this; this doesn’t seem right.”

New electronic counterfeit detectors are high-tech. Sangha notes, “They’ve come a long way. There used to be an ultraviolet light that could detect security markers. Now it’s an infrared device that can see through bills almost like an X-ray.”

Larger stores hire professional security guards to take deposits to the bank. For those without a guard service, Newman advises clients to check on their insurance coverage for cash. When making a deposit, he has these suggestions: “Drastically alter the routine. Don’t announce the bank drop. Wear a money belt. Be discreet. Keep away from staff.” He warns that it’s easy for an employee to send a text out to an accomplice outside.

Criminals will often work in groups. “Organized crime guys will take the highest value and use the quickest initiatives. They’ll hit you the hardest,” says Sangha. External theft policies and procedures are vital, as is an alarm button to alert police.

After hours, experts encourage owners to search washrooms for anyone who could be hiding, lock doors when cashing out, and install high-security locks that can’t be drilled. When an employee who had access to the lock leaves, Newman points out that, “The first call is to the locksmith.”

In liquor retail where margins are tight and shrinkage is high, cutting-edge security measures can be expensive. Newman acknowledges this, saying, “Owners can scale what they do.”

Koltai concurs, “We try to instill upon business owners, regardless of whether it is an individual with a small store or a large chain, that you have to invest in security to protect your assets.” The pay-off is a higher return on profits in the long haul.