Employee theft is one of the most common — yet often overlooked — threats to small and mid-sized businesses. According to the U.S. Chamber of Commerce, employee theft costs businesses an estimated $50 billion annually. For retailers, quick-serve restaurants, salons, and other small businesses, those losses can be devastating.
Thankfully, your Point of Sale (POS) system can do more than just process sales. It can be a powerful tool for detecting suspicious activity, ensuring accountability, and safeguarding your bottom line. In this post, we’ll show you how to spot red flags of internal theft using your POS — and how to stop it before it affects your business.
Common Signs of Employee Theft (and How to Spot Them in Your POS)
1. Unusually High Number of Voids, Refunds, or Discounts
If a particular employee consistently processes more refunds, voids, or discounts than others, this could be a sign of skimming or giving away items to friends.
How Your POS Helps:
Use the reporting feature to filter transactions by employee and flag high refund or discount activity. Many systems also allow for manager approval on certain actions.
2. Inventory Shrinkage Without Sales to Match
If products are missing from your inventory, but there’s no corresponding sale, you might be dealing with theft.
How Your POS Helps:
An integrated inventory tracking system helps identify missing stock. Match sales reports to inventory movements and get alerts for discrepancies in real-time.
3. Sales Spikes at Odd Hours
Unusual sales activity during low-traffic periods — especially involving high-value items — can be a red flag.
How Your POS Helps:
Look at your POS’s sales analytics dashboard to track time-of-day activity. EkiKart, for example, can break down sales by hour and flag anomalies.
4. Suspicious Transaction Patterns
Watch for patterns like frequent “no sale” drawer openings, overuse of manual price overrides, or an odd number of canceled transactions.
How Your POS Helps:
Audit logs and detailed transaction histories allow you to track every action by staff. Set alerts for repetitive “no sale” activities or manual price changes.
5. Cash Drawer Discrepancies
If the register often comes up short — and only during certain shifts — this could indicate employee theft.
How Your POS Helps:
Use your POS’s cash management tools to reconcile each drawer per shift and employee. Automated shift reports can identify when and where the discrepancies happen.
How to Prevent Employee Theft Using POS Features
Role-Based Permissions
Assign access levels so that employees can only perform the actions necessary for their role. For example, limit discount/refund capabilities to managers.
Mandatory Manager Approval
Require managerial authorization for refunds, discounts over a certain percentage, or voided transactions.
Shift Accountability
Enable shift tracking so each transaction is tied to a specific staff member. This boosts accountability and transparency.
Real-Time Alerts
Set up real-time notifications for high-risk activities like excessive refunds or drawer openings without sales.
Video Surveillance Integration
Combine your POS with CCTV to visually verify suspicious transactions. This creates a clear trail of evidence if needed.
Regular Audit Reports
Schedule automatic weekly or monthly reports to review anomalies in sales, inventory, and cash flow.
Final Thoughts
Employee theft may be difficult to discuss but ignoring it can cost you far more than uncomfortable conversations. A modern POS system like EkiKart does more than process payments it gives you visibility into your operations, helping you detect problems early and build a culture of accountability.
Want to see how EkiKart can help you protect your business from the inside out?
