How to Prevent Hidden Fraudulent Activities Through your POS Software
What do you think is the reason behind the resounding success of Reliance Retail, Aditya Birla Retail and Spencer's? Why are they still ruling over the retail industry? If your answers range from keeping up with the consumer's changing preferences to adopting innovative omni-channel marketing strategies, you are not entirely wrong. But you are still missing one important aspect. There is one area these retail pioneers are doing right, that is keeping them at the top of their game. It’s the way they have tackled retail fraud.
There was a time when even big names faced a pressing challenge with fraud and thefts at their leading flagship stores. These varied from shoplifting, employee theft to cash skimming. Such malpractices created a massive drop in revenues. The retail giants decided to take a smart and intuitive approach to deal with these growing anomalies.
Deploying advanced security is something every business does. But these brands went one step further. They deployed fraud-proof POS systems at their stores. This has helped them in controlling inventory losses, reducing thefts and curtailing retail shrinkage.
Every retailer and entrepreneur should seek inspiration from this. A discerning, one-time investment like POS can make a big difference to your revenue. The truth is retail fraud leads to a 40% loss of total sales according to the National Survey Security Report. The truth is Prevention is always better than the cure. Spot the red flags before they get the best of your business. Read this blog to get a head start on how a POS can mitigate fraudulent activities and transactions.
Limiting Void Out Sales
Void out sales are prevalent in the retail industry. They happen due to many factors like selecting the wrong product, choosing the wrong size and lacking sufficient cash. In scenarios like these, customers usually request cashiers to cancel their purchases. This is where cashiers get the scope to commit theft. Instead of returning the cancelled-out items to the shelves, they swindle them out. What’s even worse, the retailers cannot track these embezzlements happening right under their noses. Though these transactions are legitimate, in reality, they aren’t. This is why your business should adopt high-performing POS software to stop employee fraud and theft. The POS software requires the cashier to barcode the void purchases and punch in their respective codes. Until this process is completed, the customer will not receive the refund amount. The software even limits who can access these void sales.
Enabling Cash Tracking
Though digital payments are becoming more commonplace, cash still dominates the majority of financial transactions. This is also a reason why businesses become easily vulnerable to cash embezzlements and misappropriations. With POS software, your cash will be as safe as houses. The employee can access the cash drawer only when a transaction has taken place. Very soon, things like cash skimming and fraudulent disbursements will become things of the past.
Tracking Cash Expenses
Cash lying in the till could be used for fake expenses by the cashiers or other parties. To ensure that this does not happen, you need to implement petty cash tracking so that all expenditure is recorded in the system to be verified before cash reimbursement is given.
Preventing Discount Abuse
Discounts, loyalty programs and gift cards help in offering memorable customer experiences. But many times, cashiers tend to provide unauthorized discounts and freebies to employees, customers and their relatives. This practice is called sweethearting in retail parlance. So, how does the POS software avoid this? Well, the POS software sends a direct alert via OTP (one-time-passwords) to retail managers whenever there is the tampering of discounts and vouchers. It also provides them with detailed reviews of the discounts given.
Utilize Promotions Engines
Ever wondered why there are no discounts at large retail stores but rather there are sale periods when prices are reduced across the board for everyone. This is a major practice to limit random discounting to preferred customers. What’s more, this also boosts up sales as there are more walk-ins in every sale period.
Empowering Effective Inventory Management
Did you know that inventory theft accounts for 35% of yearly losses according to a report by Shopify? This calls for better inventory management. Leverage the prowess of well-built POS software for advanced inventory monitoring. It records what inventory is coming into the business and what is going out. Such platforms also show where the inventory has been stored and at which location.
Most importantly such POS software / retail applications will automatically lock inventory movement during a stock audit, hence you are sure of the base value of inventory when doing the physical audit.
Even better, the POS software offers real-time inventory tracking and insights into your best-selling and cold products.
You get a peek into the latest market trends that help you in making informed sales decisions.
Securing digital transactions
Here’s something every enterprise should be aware of: Your POS system can be hacked easily. A report by Business Standard states that India ranks 2nd in POS frauds and ransomware attacks. If that’s not all, you will be shocked to learn that an average business can face more than 15 different kinds of POS malware attacks. Therefore, what your company needs is POS software with integrations with the POS systems used to collect credit card payments, debit card payments and more. This means the cashier cannot enter the transaction value directly into the credit card swipe machine. These days UPI and mobile wallets are extremely popular, so it is necessary to have POS software and POS apps that integrate with the payment apps like Paytm, GPay and PhonePe.
Daily auto reconciliation of these values by the accounting team is also a necessary step to eliminate any gaps in the payments to the bank by these companies.
Conducting Regular Audits
How do you know your company is performing well? Are there any glaring gaps or discrepancies? Is there any area that needs significant improvement? You get all this information and more through conducting an audit trail. A robust POS platform is what you need to carry out regular audit trials. It helps to:
- Monitor all business transactions
- Receive updates on what is happening on the premises
- Identify and resolve any issues and problems.
Not only this, here’s the other key areas you can supervise with the POS software
- Time clock ins/outs
- Void orders
- Price fluctuations and changes
- Security breaches
The Path Forward
It's clear that frauds and threats will be a part of the business ecosystem. In fact, it will evolve more as technology and criminals become smarter and more advanced. But you can always stay miles ahead of such imminent dangers with well-rounded POS software. With Ginesys One, get ahead with their resilient POS systems that come with an in-built audit trail. This audit trail monitors large sales transactions and other business operations that assists your firm address future concerns and make build key strategies.