A successful convenience store (C-store) and fuel business should operate efficiently, deliver a great customer experience, and turn a profit year after year. However, operators can't focus their financial priorities solely on generating revenue via retail sales, food service, and fuel – they must also consider losses through things like surplus stock, food service waste, and potential employee theft.
Employee theft, in particular, is a looming threat for convenience stores and gas stations as it can cost the business hundreds of thousands of dollars every year. Recent shifts to leaner staffing models and self-checkouts have created even more opportunities for theft in the past several years.
Traditional security measures like surveillance cameras and cash balancing are essential in reducing theft, but they still leave opportunities for employees to take advantage of your business. That's why daily reports from a business intelligence (BI) solution are crucial in helping operators spot the warning signs of employee theft and resolve concerns before they impact overall profitability.
In this blog post, we'll explain how automated reports can raise red flags and tell you how to prevent employee theft, saving your business both time and money.
Employee Theft in Convenience Stores and Fuel Stations
When most retailers think about theft, their minds go first to external theft – customers or other individuals attempting to shoplift or break into the cash register. Unfortunately, this isn’t the only type of theft that can negatively affect their business.
Employee theft is a major threat as well, and one that can go undetected without the proper precautions in place. In some cases, employees’ intimate knowledge of operations and regular access to assets like cash drawers and inventory makes them an even greater concern than outside parties.
Employee theft encompasses any stealing, use, or misuse of an employer’s assets without permission. It doesn’t just refer to team members covertly swiping merchandise from the stockroom. These are the main categories of employee theft:
- Stealing money: skimming off the top of their cash drawers, stealing gift cards, or even taking customers’ cash without ringing up their purchases.
- Stealing merchandise: whether they take products off the shelves or enjoy free meals from your on-site restaurant.
- “Sweethearting:” letting friends or family members take goods from your store without ringing them up or giving them an employee discount.
- Altering financial records: making intentional errors when balancing their tills or even manipulating financial statements to hide losses.
- Misusing company time: things like staying clocked in on breaks, excessively using their phone during a shift, rounding up time, “buddy punching,” and more.
All these activities can be detrimental to your store’s profitability and reputation, causing direct financial losses, increased labor costs, inventory problems, and tarnishing your reputation.
Using Business Intelligence to Uncover Potential Employee Theft
No matter the reasoning or intent behind it, identifying and putting an end to employee theft should be a top priority for your business. But you need more than cameras and store alarms to effectively combat it and get the employees responsible back on the right path – or out of your organization if they’re stealing intentionally.
Business intelligence (BI) software is a highly effective tool for gaining detailed insight into your business performance and health. Many operators rely on a BI solution designed specifically for C-stores and fuel to combine data from multiple sources, measure industry-standard key performance indicators, track ongoing trends, and surface insights to employees across the organization.
BI reports can also serve as an integral tool for loss prevention. They give you a bird’s eye view of operations and allow you to quickly find inconsistencies or unusual patterns in time, inventory, and financial data. By checking these reports daily, managers can spot atypical patterns and discrepancies that may point to employee theft.
Bolstering your loss prevention strategy with BI reports and dashboards will help you:
- Save Time: Automated reports eliminate the need for hours of manual data collection and analysis every month.
- Respond Quicker: Immediate access to your data enables quicker detection and response to potential theft.
- Increase Data Accuracy: Automated systems reduce the risk of human error, so you’re always acting on reliable business insight.
- Boost Your Bottom Line: Identifying and mitigating theft protects your bottom line and increases your overall profitability.
Four Key Reports to Help Operators Prevent Employee Theft
Automated reports give business leaders a comprehensive, up-to-date view of each store’s activities and performance in every area – from retail sales to daily inventory levels. While every business has unique needs and requirements, there are several types of reports that can help you determine how to prevent employee theft at your C-store:
#1 Inventory Reports
Inventory reports help you keep an eye on turnover and stock levels in every product category you sell. These reports are important for maintaining adequate stock levels, identifying top-performing products, and helping you avoid dead stock.
By tracking your store’s inventory levels consistently, you can more easily spot discrepancies or patterns of missing items that could signal potential theft. BI software can automate a variety of inventory reports, including exception reports that will clearly highlight any unusual figures.
You can even configure custom alerts that go out to managers via email when inventory numbers fall out of your pre-designated range. That way, they can dig into the root cause and take corrective action right away, rather than waiting for an end-of-quarter report to reveal weeks or even months of inventory theft.
#2 Financial Exception Reports
Another key report for mitigating employee theft is a financial exception report. These reports allow you to monitor transactions constantly, and quickly alert you to unusual financial activities such as large or frequent refunds, voided transactions, or unauthorized discounts.
What’s more, these reports include detailed records of who processed each transaction, so you can see if certain employees have a pattern of financial errors or unusual transactions. This system holds employees accountable and enables you to call out potential theft directly, rather than manually digging through transaction records to see which cash register or employee is tied to the exceptions.
You can use this data to start informed conversations with employees and determine which discrepancies are tied to human error or inadequate training, and which ones stem from theft.
#3 Loyalty and Coupon Utilization Reports
You likely already generate loyalty-related reports to measure the effectiveness of various promotions and marketing campaigns. In many cases, these reports can also be helpful for identifying the abuse of such programs.
Imagine a customer is purchasing an item that’s an extra 20% off with a loyalty card. When asked if they have a card, the customer answers no, and your cashier says something like, “Don’t worry about it. I’ll apply the discount anyway.” This type of activity isn't necessarily nefarious at the surface level.
Oftentimes, cashiers are simply trying to give customers the best deal possible. However, this method also allows your employees to rack up way more points than the average customer, and it doesn't help you grow your loyalty program.
Similarly, employees may hold onto coupon codes and redeem them over and over, potentially combining multiple coupons or re-using ones that should be limited to one per customer. Over time, these seemingly small discounts add up, taking away from your bottom line. Regular reports can help you establish an average for the number of coupons used or rewards applied. Then, you’ll be able to spot spikes in redemption and tie them back to the cashier who completed the transactions.
#4 Voids and No Sale Reports
In extreme cases, an employee may attempt to steal money from your store by abusing the POS system. Void and No Sale Reports can help you identify any bad apples within your business and remove them before further damage occurs. While a certain number of voids and no sales are normal, unusual spikes in these cashier activities, or a certain employee with a higher number than their coworkers, can point to cash theft.
For example, an employee might ring up products at the register for a customer paying in cash, then void the transaction or cancel the sale so they can pocket the cash for themselves. By comparing void and no sales data to shift reports, you can spot anomalies or unusually high numbers across shifts and specific cashiers.
In addition to helping you identify theft, these reports can also prompt further investigation into why voids and no sales occur – whether from customer pushback about pricing or employee errors on the POS – so you can address them appropriately.
Get Ahead of Potential Theft With TARGIT
BI-powered reports can significantly improve your loss prevention efforts by enabling you to stamp out theft, eliminate dishonest employees, and remediate accidental employee theft with training or process changes.
Plus, a business intelligence solution designed for c-store and fuel operators seamlessly connects to your ERP and other systems and equips you with pre-built reports based on industry best practices – so you can start generating automated reports right out of the gate.
Not only will your BI reports inform daily decisions and help you stay on track toward company goals, but they’re also an invaluable tool for employee theft and identifying other exceptions that may cut into your profits.
In fact, TARGIT customer TXB Stores used automated exception reports to identify and resolve over $250,000 in employee theft in a single year.
“These reports show us if people are abusing marketing promotions or manually inputting lower prices, both of which are instances of employee theft. We have found and addressed at least $250k in theft since implementing TARGIT.”
- Rick Tellez, CFO, TXB Stores
Read the full customer story to see how TXB Stores uses TARGIT’s all-in-one BI solution to refine daily operations, stay ahead of potential concerns, and uncover numerous improvement opportunities.
