How an Unbalanced Register Impacts Shrink

The “Register” is the cornerstone for any retail store. It holds an opening balance of cash and holds anyone with access liable. There are a number of problems that influence the balance in a register and have serious consequences for the business. Shrinkage is the loss of inventory influenced by factors such as theft, administrative error, damage in-transit or cashier errors that benefit the customer. Early identification of these issues will impact shrinkage and positively impact the entire business.

Problems at Checkout

The term “Overages and Shortages” refers to the money in cash drawers that are either over or below the opening balance of a register—typically handled by cashiers and money center associates. If a register is over or short from the beginning balance, shrink can occur because of a direct loss to money that is on-hand.

There are multiple reasons as to what causes a register to be over or short:

  • Scanner Error
  • Incorrect Change Given/Taken
  • Wrong Item Rang-up
  • Theft
  • Coupon Error

These overages and shortages will help identify if there are consistent problems within the checkout area of the supermarket. In some cases, a cashier may need further training on counting and handling bills given that there are occasions when the bills will stick together which ultimately causes a shortage.

Some Solutions

One proper measure to take is setting a threshold where the management and LP associates track the shortages and overages daily and conduct investigations more thoroughly when the number surpasses what is acceptable.

Best Practice Solutions

For most shrink conscious stores, if a register shows on a report that it is over or under $10, LP and front-end management will look into the cashier via video right away to investigate what happened.

Another measurement is frequency. If it’s a lower dollar amount, further investigation may be required because of the consistency in which the register reports being over or under.

While performing these video investigations, LP is looking into breaking down the causes and putting them into categories such as coupon errors, incorrect change, and theft. After creating these buckets, LP will code the reason for the overage or shortage, creating the ability to track the loss.

Why You Should Implement These Solutions

Applying this type of tracking and accountability system for register cash shortages and overages can give LP and front-end managers the ability to plan and create an action plan to fix the problems. Additionally, having the capacity to see where the loss is occurring can appropriately direct the management team as to where they need to put their efforts and attention.

For example, if the majority of loss came from coupon errors, management would be able to put a training program together for cashiers on properly issuing and collecting coupons. Ultimately, this is a system of gathering data to identify root causes and then implementing a control or training to improve that particular process or behavior at the front end—giving a defined daily tactic on reducing paper shrink.