What is Material Retail Dumps?
Material Retail Dumps is a short-form podcast with brief but valuable content for independent retailers selling clothing, home goods, stationary and more. As business owners we don't have time for a 30-minute lesson with a ton of banter, that's why we created our podcast. We get straight to the meat of the topic and aim to give you actionable information that will help you optimize your retail operations and make more money every day.
Welcome to the Material Retail Dumps podcast. If you've listened to us before, thanks so much for coming back. If it's your first time listening, welcome Material Retail Dumps is a short form podcast with briefly valuable content for independent retailers. As business owners, we don't have time for a 30 minute lesson with a ton of banter. We get straight to the meat of the topic and aim to give you actionable information and will help you optimize your retail operation and make more money every day. Welcome to Material Retail Dumps, episode 27. This is the second episode in a three part series about not getting screwed over and just not losing money due to fraud theft or anything like that. Unless episode we discuss customers. In this episode, we're gonna discuss employees. Now this is again, a sensitive topic. Nobody wants to think that their employees are stealing, stealing from them.
Nobody wants to think their employees are cheating them and, and also nobody wants to think that employees make mistakes that cost them money, but at the end of the day, it's a part of business. We gotta make sure that we're keeping as much of the money that belongs to us with our business so that at the end that so that we get to take home more money at the end of the year. At the end of the day, that's why we're in business. And if we're gonna make less money, I hope it's not because we're getting stolen from. So let's jump in. First thing I wanna talk about is just having very clear policies and procedures. So this can be anything from how we ticket and bring in new merchandise into the store, how we, who we're willing to give discounts to, who we're willing to give return exceptions to and things like that.
Our employees need to know exactly what you are and are not willing to do. Um, and it needs to be written down and they need, everybody needs to know it. Now, one thing that comes to mind is receiving merchandise. It sounds basic, but it happens often where something is mispriced and it's tagged incorrectly. And you know you're selling a $200 item for 80 bucks because the employee put the wrong ticket on it. And then you can't sell the $80 item for 200 bucks cuz it's not worth it. So the item doesn't end up selling. So what I'd say on that one might wanna have some sort of checks and balances in place to make sure that things are going onto the floor ticketed correctly. Next thing I wanna touch on is, you know, returns in what you're willing to do for exceptions to the rules.
So if you're a store, you undoubtedly have a return policy, most likely it's clearly written on your receipt and on a sign in the store and everybody knows it. You know, maybe it's two weeks money back. However, that doesn't mean all customers are going to honor that. Customer's gonna come in if you have a two week return policy four weeks later and wanna return it and some of them may get pushy. You need to tell your cu your, your employees need to know where, you know, where's the line that you don't want across? Would you rather upset a customer and not give a refund? Or would you rather give the customer a refund just to keep them happy? And that's very important because you don't wanna leave those decisions necessarily in the employee's hands because it opens up a door to where the employees not listening to their return policy.
I mean, customers are not gonna listen to their return policy and then you're gonna be given away a lot of returns that you shouldn't be given away. So those are just two examples of just having clear policies and procedures in the store will just, you know, help you just keep a little more money in your business and you're giving out extra money, then at least it's on your terms. The next thing I want to talk about is in your pos. Now this is extremely, and it's very important to implement this in so many places in your point of sale and other software that you use, is you wanna have employee codes or employee security rules in those systems. So you wanna know if you know, did Laura make that sale or did Emily make the sale? Did Elliot give a discount to the customer or did Eric give a discount to the customer?
Now this is very important because it will tie an employee to every single transaction in your store. So you'll know who's giving out discounts when they shouldn't be, who's pressing returns when they shouldn't be, who's just doing things that they shouldn't be doing. Because if you have a problem two weeks later you pull up that receipt, you see who did the sale, you know, you have a conversation with them, maybe it's their 15th time they made that mistake and maybe it's a problem. Maybe they're doing it on purpose. Having employees listed on every transaction is super important. Another thing you could do is you can implement employee security features. So most point of sales systems now will have different security levels. So you can have a security level for cashiers, you can have a security level for managers and you can have a security level for the owner.
And maybe you only allow cashiers to do certain things and maybe you only allow managers to do certain things. For example, maybe you allow cashiers to ring up customers but you don't allow them to do returns. So there's no reason why you have to allow the cashier to make that decision. You just need to not let them do it through the system and you know, that'll prompt them to say, you know, manager override or something like that. Same goes with entering inventory and removing inventory from the system. You only want your most trusted employees going into the system and editing your inventory. And again, this goes for any part of your system that you don't feel comfortable with anybody having access to just, you know, you set it up one or you know, one time and then all of a sudden you have these rules in place forever and you don't have to be the bad guy cause the POS is the bad guy.
The next thing I wanna recommend you do is just get cameras in the store. I don't even care if they don't work. Put up cameras in the store. Let your employees know where the cameras are. Let them know that they're everywhere and that by the cash crew out there, they're by the fitting rooms, not looking into the fitting rooms but by the fitting rooms and they are everywhere because an employee who knows that they're being watched is going to probably not wanna do anything a little bit shady. And you know, even if you have an employee who is, you know, malicious, maybe they'll just find a new store to take advantage of. And if you have an employee who's not malicious but maybe like, you know, has a bad thought in their head, maybe the camera will deter them. The last thing I wanna talk about is very basic, but sometimes gets lost and a lot of people just don't do this anymore, is you need to count the cash that comes into
Your, your register every single day. Every day you come into the store and you count your cash and every night and you close up, you count your cash. Um, you'll know if cash is missing. So by this point, you should have a POS system that has closing reports that tells you how much business you did in the store that day, how much of it was cash, how much of it was card, how much of it was store credit and stuff like that. You should know you started there with 200 bucks, you did $400 in sales. You should end the day with 600 bucks. Count the register, yes there is 600 bucks. Then you take that $400 out, put it gear to the bank in the morning, you start with that 200 bucks. Again, if you're not counting the register every day and you're not checking those, those closing reports to see that the right amount of money was deposited, you're leaving yourself open up to easy theft.
Now, quick story I want to tell and then I'm gonna end. You know, I used to work in a retail store. We were noticing, you know, money missing for the register every day. So my manager told me every morning and every day at 12 noon and every day at 4:00 PM and every day at closing, you're gonna count the register and make sure it's accurate. So for like a month straight, I would count the register four times a day. And then finally we noticed, okay, $20 is missing. And it happened between 12 and four. So we sat and looked at the cameras, cameras in the store, sat and looked in the cameras and we saw an employee steal the money. If we were not counting the cash multiple times a day, we did not have cameras in the store. We would never have found that employee.
And that employee who probably stole a few hundred dollars from the store, may have stolen a few thousand dollars from the store over the course of, you know, years. Instead, we were able to just part ways with the employee didn't have to be brutal. We let her know what we saw, we let her know that it's, you know, our last day of employment and we all just moved on with our days and thankfully we had some security in place and we were able to just take care of it. That does it for episode 27. Hope you guys have a great day and um, looking forward to episode 28.