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Positive Outcomes

  /  2019 Jan-March   /  Using your POS to detect and reduce fraud

Using your POS to detect and reduce fraud

Fraud – it’s not something that any of us likes to think about, especially from within our own team. But when you’re running a hospitality business, staff fraud is one of the ways that your profits can walk out of the door, and like it or not, it is something you have to build into your management plan.

Whilst there is no 100% failsafe way of stopping staff dishonesty, there are controls you can put in place through a good POS system to a) catch the culprits and b) deter the rest of the staff.

Here is our guide to the best practical steps can you take to use your POS to catch and deter fraud:

Individual/transaction tracking
The first action is to track transactions by staff member – and to make the fact known, to deter as well as detect.

In hospitality, with multiple staff using a single till, employees should identify themselves at the start of each transaction. You’ll need something swift – an id number or a RF swipe wristband are the most common. Biometrics, such as fingerprints, face, and finger vein scans, whilst well established for laptops and phones, are still a little slow for POS usage, but I think we’ll see them pretty soon.

The added benefit of this approach is that by tracking individual sales, it can help you incent and reward your team.

Individual cash drawers
Although multiple staff share a POS, you can give each of them their own cash drawer. You simply attach multiple drawers to each POS, and select the one to be used based on who logs in for that transaction. Each staff member is accountable for the balance of their own drawer, making investigations into anomalies much quicker. You will need multiple floats with this approach, but the benefits often outweigh the additional cash cost.

Drawer open alert
A common fraud technique is to leave the cash drawer open between transactions and take the second sale as ‘cash in hand’. Franchisees wanting to artificially reduce their sales figures may do the same. A good POS system will allow you to monitor if the cash drawer is being left open longer than necessary – around 20 seconds per transaction – and sound an alert if the expected times are exceeded.

Customer facing displays
A staff member is less likely to commit fraud if they think that someone else can see what is happening. Knowing that the customer can see what is (and isn’t) being rung up and can act as a deterrent.

Integrated EFTPOS
Stand-alone EFTPOS, where staff manually enter the transaction value, leaves plenty of room for fraud, as well as for human error. An integrated EFTPOS – where the amount rung up at the POS is automatically sent to the payment terminal, eliminates both sources of loss.

‘Snoop mode’
‘Sweethearting’ can be hard to spot – the staff member rings up, say a house whisky, takes the right money (so the till balances) but actually pours an expensive brand. To detect this type of fraud, consider a keystroke tracker app – which allows you to see what is being entered on a till, in real time from your phone or tablet, and compare what is rung up with what is handed over the counter.

Linking your POS and camera systems
Camera vision of your tills can be linked with transaction detail via timestamp, to give you powerful fraud detection tools.

You can set up alerts, triggered by patterns, (such as more than x ‘no sale’s in y timeframe) and overlay transaction data on real time vision to see exactly how they are occurring.

Alternatively, you can link the vision with transaction data (via timestamp), to investigate recurring issues. For example, if you had a shortage of brand x gin, or a suspicion about staff member y, you could use this ‘integrated search’ to find every transaction involving that product or person, and use the combined data to provide resolution or evidence of fraud.

Fraud is never a pleasant topic to address, but ignoring it won’t make it go away. My recommended approach is to identify and prevent fraud by using the functionality built into your POS.

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