5 CASH CONTROLS YOUR RETAIL STORE SHOULD ALREADY HAVE IN PLACE

If your store has not been impacted by cash discrepancies, be grateful but don’t assume this will continue forever.  Protecting cash is just as important (if not more) as guarding inventory.  Consider that in order to acquire cash, product must be manufactured or purchased, shipped, received and merchandised.  The business must also engage in some level of marketing to attract traffic.  Lastly, a customer has to be convinced to buy something. Then and only then does the retailer get its hands on currency in exchange for whatever was sold. Get my point? When a till loses $100, think about the resources that have been invested to procure that money and you’ll find yourself cringing as much as I do.

Ok you can stop cringing now, there are good news.  As alternate payment methods increase in popularity, e.g. credit cards, Apple Pay, etc… the risk of cash loss continues to decrease.  Nevertheless, while cash may no longer be king, it is not completely out of the royal tender family, not yet anyway. You need not worry, the steps below will help minimize losses due to theft and errors. 

The 5 cash controls your retail store should already have in place are:

1. Staff is trained on handling cash at the point of sale
2. Mid-Day or partial deposits are done to minimize cash exposure
3. Deposits are processed using sealed and serialized bags
4. Deposit Log is used to document deposit activity
5. Armored Car Service is used or deposits are taken to the bank during daylight hours

Staff is trained on handling cash at the point of sale

The opportunity to lose currency starts when the money is first handled by a cashier.  Lack of consistency can lead to simple mistakes that result in discrepancies.  To avoid errors, create specific cash management guidelines.  This way employees understand exactly how the money should be accepted, verified, counted and stored in the till. 

Accepting cash and giving back change

Associates should verify the bills before tendering the amount on the register.  It's also advisable for cashiers  to count change out loud back to the customer before the bills are dispersed inside the till. These precautions make it more difficult for quick change artists to confuse a cashier and may deter someone from attempting in the first place.  

Till organization

Bills should be organized neatly in the standard form.  From left to right, larger denominations ($100’s and $50’s) come first, followed by $20s, then $10s, $5s, and singles.  Similarly loose quarters, dimes, nickels and pennies are also organized from left to right in that order.  Rolled coins should be kept in an assigned slot generally on the far left side of the till. 
See the image at the top of the article as a general example only and provide employees with a similar picture in your Policy and Procedure document. Regarding coins, we would recommend a slight deviation from the image. Instead of utilizing 2 coin slots on the left for loose quarters, consider using one for quarters and the other for rolled coins.

By outlining clear expectations, the retailer is helping cashiers to become familiar with effective cash handling routines.  Through sheer repetition, these tasks will become risk deterring habits. Clear policies and good training means that cash is handled consistently day in and day out, with minimal fraud, errors and discrepancies.    

Mid-Day or partial deposits are done to minimize cash exposure

Congratulations, business is good.  But now we have to figure out what to do with all this money.  Being overexposed at the register poses various risks, some more dangerous than others. 

When the register is full beyond capacity, bills are more likely to get stuck when the drawer opens and closes. Having too much cash in the register may also tempt an opportunistic criminal to do a grab-and-run, basically snatching cash (usually from the left side where the big bills are kept) when the drawer opens for a transaction and dashing away before the cashier even has a chance to process what just happened.

Most concerning, having too much cash can also encourage an armed robbery which is the absolute last thing any retailer ever wants to deal with. Take it from someone who has had to respond to these types of incidents many times throughout my career. A robbery will disrupt your business, damage the brand and devastate associate morale in addition to the obvious safety implications.

Thankfully removing excess cash in a timely manner is easy enough to accomplish.  Most modern POS software will prompt the cashier when a specified amount of cash is exceeded. The difficult part is getting associates to actually follow the prompt and empty the till rather than just clearing it without removing the cash.

If your store’s POS system cannot provide a warning when cash is overexposed, then the best bet is to create a schedule that requires cashiers to conduct pick-ups at specified times of the day.  The schedule should take peak sales times into consideration so that pick-ups occur right after these periods.  Remove high denomination bills ($100s and $50s) as well as most $20s, and leave only enough cash on the till to handle refunds and give change back to customers.

The money should be removed from the register quickly, placed in a cash bag and immediately dropped in the safe.  Because this action is occurring while the store is open, safety tromps cash security.  I recommend the business to drop the money without counting it, this way the focus remains on customer service while also minimizing the risk of theft or robbery.  In business models enjoying vast associate coverage (scheduling of multiple associates per shift), a manager could count the money away from the sales floor and log the amount using a mid-day deposit log. 

Also keep in mind that many POS systems allow the cashier to capture the amount being dropped electronically and incorporates it towards the end-of-day deposit.  These variables can often be customized so work within your system’s capacity to reach the smoothest and most secure process possible. 

Deposits are processed using sealed and serialized bags

We are going to save you save you some reading time by keeping this section very brief.  A cash bag is a straight forward contraption.  It’s basically a zip lock plastic bag, labeled with a serial number, containing glue on the top so that it can be sealed.  If the bag is reopened after it has been sealed, it is damaged and cannot be easily closed again.  This makes it difficult for a dishonest employee to reopen the bag and remove bills after the bag was initially closed without being noticed. The serial numbers allow the specific bags that were used for deposits or for mid-day drops to be logged and individually identified.  It basically serializes the deposits themselves.

Using sealed/serialized bags is an absolute necessity in order to maintain proper cash controls and have a shot at an effective investigation should money disappear.  Bags can be easily acquired from a number of vendors at a reasonable cost. 

Deposit Log is used to document deposit activity

Regardless of your store’s volume, using a log to document deposit activity is a must-have control.  The log is a simple idea but effective to maintain consistency in the deposit process thereby avoiding errors and the discrepancies associated with them.

The log forces everyone who touches the currency or deposit bag to document their interaction with it.  From the closing manager who counts the registers and places the cash in the bag to the morning opener responsible for taking the money to the bank or handing it to the armored carrier, documenting every step discourages internal theft and is a valuable tool if an investigation becomes necessary.

At a minimum, a deposit log should serve to capture the following details:

• Date and time the deposit was created
• Total deposit amount and listing of any discrepancies
• Signature of manager who created deposit and double signature if another employee is available to verify the cash
• Bag number into which the currency was placed
• Date and time the deposit was taken to the bank or handed to the armored car agent
• Signature of person taking the deposit or handing it to the armored car carrier

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Armored Car Service is used or deposits are taken to the bank during daylight hours

I can still recall working at companies which required that closing managers walk to the bank with the day’s deposit after closing.  This is not recommended as it poses risks to the employee personally as well as liability to the retailer.  A robbery is significantly more likely to occur after dark especially when the employee takes the money to the bank at the same exact time every evening.  This situation is difficult to avoid if the manager has a small window after closing to get the funds deposited.  The degree of predictability caused by making deposits in the evening becomes an advantage to a would-be robber as it allows for the manager to be observed over a period of time so that the robbery can be planned for a date and time of the criminal’s choosing. 

Also most key-holders who deposit after the store closes do not return to the store in order to clock back out, which means that the deposits are done while the employee is off the clock.  This is illegal and can get the employer in deep water rather quickly. 

Lastly, it is not unusual for a parent or friend to pick up an associate from work.  Try being the LP person tasked with investigating a missing deposit when the suspects include friends and family members not employed by the company.  I’ve been there, it’s not fun or effective.

Ideally your retailer can afford to engage an Armored Car carrier.  If this is the case, then the walk to the bank is avoided all together.  Armored Car has the added benefit of also being able to deliver your coin orders which all but eliminates your cash deposit and delivery problems. 

If Armored Car is not an option due to cost, the deposits should be taken during the day, at alternating times, if possible by two employees walking or driving together.  To the best of the retailer’s ability, the bank selected should be in close proximity to the store, located in a public and easily accessed area.  For stores operating out of malls, considering a bank that is located inside the mall or shopping center is almost always the best idea from a safety perspective.

Closing

As mentioned earlier, the 5 points discussed on this article represent the very basics of Cash Management and Control procedures.  There are many other options for controls that are appropriate and necessary in specific environments.  This is only a place to get a small retailer or new manager started.  As always if you have any questions feel free to reach out to me.  Also you’re welcome to let us know about additional controls that work well within your organization by commenting on the post, or sharing your cash management experience with previous retailers.

Want to learn more about becoming a Loss Prevention Officer? Check out The Store Detective Training Manual.  A Practical Reference for Current and Aspiring Loss Prevention Officers.   

If you enjoyed this article, read our other posts (click on the title below to read the article)

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