How to Prevent Theft In Your Store With a POS System

According to FaceFirst, inventory shrinkage costs the U.S. retail industry over $45 billion each year. Needless to say, internal theft, shoplifting, fraud and organized retail crime can result in a significant decline in profit margins.

As a retailer, reducing the incidence of theft and strengthening your bottom line can seem a bit overwhelming, but the right tools can help you manage your losses. Here are 5 ways your point of sale can make the task easier:

1. Keep Track of Your Inventory

Keeping a close eye on your inventory management (what you purchase, sell and/or lose) is essential in discovering where your retail losses are occurring.

When you use automated inventory tracking, all items in your store are barcoded and a central database keeps track of where items are stored and how many items are in stock.This helps you reduce internal theft by monitoring the whereabouts of your inventory.

Using reports in your POS, you can also perform regular inventory checks, comparing them with your point of sale system to determine if your automated reports and physical inventory counts match up.

Constantly tracking your inventory and reviewing trends using data from your POS will go a long way in helping you prevent costly losses resulting from theft.

2. Assign Access Levels for Your POS Users

Unfortunately, not all employees are trustworthy. That’s why it’s important to assign different access levels for your POS. These tiered levels of access (cashier or manager logins, for example) serve to control who can perform certain actions, such as voiding transactions or providing a discount.

POS systems such as Rain POS allow you to create unique user groups with special permissions to areas of the system they are authorized to access and edit. Because the system is integrated with your website, you can also restrict employee access to the website, while still allowing them to use the POS.

Assigning different permission levels for your POS will ensure that employees are only given access to the information they need to do their jobs.

3. Use Your POS’s Mobility to Walk the Floor

Taking advantage of the mobility that your POS offers can be a major factor in combatting theft. Why? The traditional point of sale system requires merchants to stay behind the counter, giving shoplifters plenty of opportunities to find hidden spaces where they can stash unpaid items in bags, pockets, or under clothes.

Employees who have the freedom to roam the sales floor can offer better customer service while posing a physical and psychological obstacle for shoplifters. After all, the last thing a thief wants is to be noticed.

Using a cloud-based POS system on a tablet, you can look up products or ring up transactions for clients wherever they are on the sales floor, allowing you to engage more customers, which is often a key way of discouraging theft.

4. Make Sure You’re EMV Compliant

In-store theft has many faces. Often theft comes in the form of credit card fraud, resulting in costly chargebacks to retailers.

EMV is the global standard for chip-based debit and credit card transactions and provides enhanced security. This new technology helps reduce the chances of credit card information being cloned and used for fraudulent transactions. When you use an EMV chip reader to process a customer’s credit card payment, Visa, MasterCard, etc. take on any liability, not your business.

Additionally, accepting NFC payments in your store is not only convenient for customers, but it also protects your store’s profits at the same time. Mobile wallets (like Apple Pay) operate by tokenization technology so credit card numbers get stored and transmitted in random numbers (or tokens), making them useless to swindlers.

Using the most recent payment technology is a good way to reduce the likelihood of fraudulent charges in your store and save you money.

5. Review Employee Transaction Reports

Internal or employee theft typically doesn’t receive as much monitoring as customer theft, even though a whopping $50 billion is stolen from US businesses annually by employees.

That’s why conducting random internal audits is an essential tool in combatting theft in your retail store. Using your point of sale system to run reports periodically will help you see the sales your store associates are making.

This gives you the opportunity to evaluate suspicious transactions that might be occurring during a certain time period so you’re better able to pinpoint specifically when—and by whom—the theft happened.

Also, inform your employees that random internal audits are a standard practice so they’re aware that they’ll be held accountable for inventory or cash losses that occur during their shift. This will help dissuade would-be thieves among your ranks.


There is no bulletproof solution for preventing retail shrinkage. As long as retailers use computers and Internet services to conduct business transactions, security and fraud will continue to be a major concern.

Many retailers are missing out on a key method of preventing losses resulting from theft. Don’t be one of them. Your POS can help in the fight against theft, saving you hundreds of dollars per month. Use the 5 point of sale tips mentioned above to start reducing theft in your store today!

See our cloud-based, all-in-one system for yourself.

Also published on Medium.

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and two small business e-books. She is a voracious reader who owns more books than she can ever read in this lifetime. A graduate of Brigham Young University, she worked in advertising for many years before moving to her current writing position at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with small business owners.