Integrating your video surveillance with the POS system makes a lot of sense. This example shows a skimmer being installed by some shop thieves. Your staff may not be involved in the fraud at the point of sale. This fraud took three (3) seconds. Nothing would show here on the computer if the cameras had never been installed on the tills; it would never have been found.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

You already spend time and money counting the stock in your shop. Let's take a look at the real story behind your missing stock. I will show you how to calculate stock shrinkage and identify causes using your Point of Sale (POS) system. What we want is better control of profits.

What Is Stock Shrinkage?

Stock shrinkage is the difference between the stock value recorded in your system and the value you actually count on your shelves. It is the financial gap between what you should have and what you do have. For example, if your POS says you should have 100 units of a stock line, but your physical count finds only 92, the missing eight units are your stock shrinkage.

Since we have so many lines, the only useful ratio is the dollar value, so we measure:

So, for example, if you should have $100,000 at cost and your count finds $97,000, the $3,000 difference is your stock variance, which is $3,000 / $100,000 × 100% = 3%. In this example, on a 30 per cent gross margin, you need to sell $10,000 worth of extra goods to get back to where you should have been.

It also distorts your buying decisions, since the computer thinks you have more stock than you should have; it does not order enough. Over time, you will not trust your stock figures as that 3% adds up.

Let us Calculate Your Stock Shrinkage Rate?

Here is an easy two-step process:

Step 1: Calculate the stock shrinkage value

• Book stock value: your POS reports before the stocktake have the book value. If your system, unlike our POS system, cannot give you this value, your accountant can tell you the figure. It's actually a fairly easy figure to calculate.

Now the Physical stock value is what your POS System said after the stocktake.

Step 2: Calculate the shrinkage rate

What Does Stock Shrinkage Include?

Stock shrinkage includes a wide range of causes. You need to separate them. Generally, most retailers divide them into two main categories: external shrinkage and internal shrinkage.

I find it helpful to separate known shrinkage from unknown shrinkage. Known shrinkage includes stock you have already written off in the system for damage, breakage, expiry or other approved reasons. Unknown shrinkage is the unexplained difference between your POS records and the physical count after accounting for all known movements.

For example, if your variance is $3,000 and you can see $1,200 of recorded damage and $300 of recorded expiry, the remaining $1,500 is your unknown shrinkage.

The more information you know, the better. For example, if staff leave damaged greeting cards in a drawer instead of recording them, they become unexplained shrinkage. When, in fact, they are a known problem. It should never have happened.

Departments

What I find very useful is to redo the calculation by department.

Generally, we find different departments have different problems.

Conclusion: Make Your Stocktake Work for You

Stock shrinkage is not just a number you give your accountant at the end of the year. Stock shrinkage is a powerful signal that your stock control, receiving, pricing or security needs attention. When you separate known and unknown shrinkage, recognise the special risks in newsagency departments, build a simple control framework and use your POS system to investigate.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

We all have people in a hurry walking past our shop every day. Next, modern shoppers won't wait. "86% of consumers say they avoid stores if they perceive the queue to be too long, while 66% have abandoned their purchase because of long queues, with only 22% returning later to make the purchase."  Many won't even join a queue if they see three people ahead.

Now, how fast should your Point of Sale (POS) system be? Here are six free ways to speed up processing.

What is POS Transaction Speed in Retail?

First, transaction speed is the total checkout time from your first scan to handing the customer the receipt.

Moreover, it includes scanning, price lookup, discounts, EFTPOS processing, and receipt printing in a single workflow. For example, transaction speed covers like scanning three magazines and tapping in 50 seconds.

Additionally, fast checkout stops walk-aways. For example, fast checkout means you serve a time-poor shopper before she leaves for a faster shop.

Why Does Transaction Speed Matter for Small Retailers?

Transaction speed is the final factor that determines whether you keep the sale or lose it to a queue.

Moreover, slow queues cost real money.

Furthermore, if your queue is six people, there is an 80% chance someone will walk out. For example, that means six people in line at your newsagency equals one lost $28 book-and-card sale.

Additionally, more speed means less need for more staff.

Next, faster checkout also reduces stress.

How Fast Should Your POS System Be?

The industry standard for a POS system's speed is 40 seconds per transaction, plus 3 seconds per item. This gives you a clear benchmark to test against. For example, a sale with three items should take about 40 seconds, plus 9 seconds, for a total of 50 seconds.

This standard includes everything. It includes scanning three gifts, applying a card discount and EFTPOS speed.

Ideally, your figures should beat that standard. My client data show that our system performs better than 50 seconds; see the graph above for real-world speeds using our POS System. It comes from 20,000 cash register sales captured by one of our clients' POS Systems.

Our client's average sale time was 36 seconds. Now that is impressive! If you study the graph, you will see our client was doing much better than that in places, hitting 36 seconds. In a pinch, that means serving 90 customers per hour during a Saturday rush instead of 60.

Additionally, in terms of speed, we match anyone in the market. 36 seconds is achievable for a newsagency, gift shop, or small retail store.

How Does Queue Length Affect Walk-Aways?

First, queue abandonment is customers leaving when the line looks too long.

Moreover, the maths is simple and brutal. For example, if each sale takes 50 seconds, six people in the queue equals over 5 minutes' wait.

Remember, 5 minutes is the tipping point: only 80% of customers are willing to wait in line if it takes longer than 5 minutes; the odds are someone walks out. Additionally, you will find many shoppers won't even join. If they see three people, they walk past.

How Can You Speed Up Your POS System for Free?

Faster checkout is a set of low-cost changes to layout, hardware, and habits that shave seconds off checkout without buying a new system.

Moreover, you can fix speed today with what you have. For example, these six ideas come from my work with thousands of retailers.

1. Use Your Fastest Computers Upfront

First, computer placement is putting your fastest, newest computer on the busiest counter.

Faster front-end computers on your main till process faster.

2. Use Scanning More and Barcode More Items

Scanning! Manual keying in is too slow. Besides, scanning is faster and more accurate.

3. Consider Several Cash Drawers on One Computer

First, multiple cash drawers are running on one Point of Sale (POS) system computer.

Moreover, it improves security and speed in a pinch. For example, several drawers means you can have two staff working the tills from one fast computer.

4. Integrate Your EFTPOS

An integrated EFTPOS terminal automatically receives the sale total from your point-of-sale system.

Moreover, integration removes double handling. For example, integrated EFTPOS eliminates the need to type $52.90 into the terminal after entering it in the POS, only to type $529.00 by mistake.

5. Use Touchscreens at the Counter

Touchscreens let staff tap products and discounts instead of using a mouse. They are both more natural and faster. 

Additionally, they shorten training time. Next, new staff learn faster with pictures than codes.

6. Switch to Email and SMS Receipts

Email receipts are digital receipts sent directly from your pos system rather than printed. For regulars in your VIP program, it can take 3-5 seconds per sale. It is also cheaper to produce.

7. Bonus tip: Use Tap and Go 

It is not free, so it is included in your bonus tip. Tap and Go, although it costs, is faster. 

What Should You Do Next to Measure Your Speed?

Measure your current transaction speed during your busiest period. Time at least ten sales. For example, time 10 sales from first scan to receipt during 4 pm-6 pm when foot traffic peaks past your shop.

Now compare to the industry standard. If you are over 40 seconds plus 3 seconds per item, you have a problem.

Conclusion: Why Does Faster Checkout Mean More Profit?

First, faster checkout is a profit-protection measure for Aussie retailers.

Moreover, most of us have people in a hurry walking past, and it is so easy to lose sales if you cannot process the transaction immediately. For example, you lose a $28 book-plus-card sale because your EFTPOS lagged by 10 seconds.

Furthermore, modern consumers do not wait, and many will not even join a queue. Therefore, the industry standard of 40 seconds plus 3 seconds per item is your baseline, and 36 seconds from real data is your achievable target.

Additionally, you now have six free and low-cost ideas that work today. Finally, use faster computers up front, scan more, use multiple drawers, integrate Tap and Go, use touchscreens, and switch to email and SMS receipts, and your Point of Sale (POS) system will let you serve more customers faster every hour.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

SMB Retail Strategy

 

The browsing customer is gone. Here's what small retailers must build around instead. The traditional retail journey used to follow a predictable map. A customer had a need, went to a nearby shopping centre, spoke with a few knowledgeable salespeople, and made a purchase after some market research.

Today, Google, Facebook and AI have hollowed out this path.

The browsing phase, once the bread and butter of brick-and-mortar shops, has been largely replaced by a search query. Many shoppers, before going shopping, have researched. They have compared prices and read product advice on their phone. This is not a marginal shift. It is the removal of the sales stage that most physical shopfronts were built around. 

Because search engines can instantly connect intent with inventory, the traditional reasons many customers walk into physical stores are shrinking.

Paradoxically, it allows stores to sell items they never carried. This is because they know that Google search will attract buyers.

However, this shift creates a unique challenge for SMB retailers who rely on selling everyday goods that customers already know well.

Redefining the SMB Value Proposition

Many independent retailers tell themselves their primary advantage is building a close, personal relationship with their customers. I am not so sure. Our current high retail staff turnover means many consumers rarely get to know your people in your shop.

Today, customer loyalty is driven by:

- Having the items.

-Pricing that feels fair.

-A frictionless, fast transaction.

What Screens Can't Replace

The internet excels at answering "What is the cheapest option?" and "Where can I buy this right now?"

However, it remains entirely blind to things requiring human observation, taste, smell, and physical judgment. Most of us have ordered an item online based on glowing reviews, only to open the box and realise it is completely useless for our specific needs. Just seeing the items might have cancelled the purchase.

This gap is where physical retail must thrive. SMB retailers must deliberately build their business models around that screen for what it can and what it cannot do:

 

Ambiguous Problem Solving

Expert advice on nuanced, non-standard customer dilemmas.

Immediate Evaluation

Allowing customers actually to see and handle the product.

Unsearchable Inventory

Having unique and unexpected items that a customer wouldn't think to type into a search box. This is important.

Speed

You can do the transaction now.

Trust

Earning credibility through consistent quality, fair pricing, and quick and easy processing of transactions.

The Four Realities of Modern Retail

To survive, independent retailers must navigate:

1. The Global Search Box

If a customer can fully specify exactly what they want in a search bar, you are no longer competing with the shop next door; you are competing with the entire internet. You cannot win a digital commodity fight using a nicer shopfront or a friendly smile.

2. Risk Reduction and Discovery

Successful modern retail focuses on reducing decision risk for the customer. Your shop must give them a reason to make the trip, either by validating a high-stakes purchase or exposing them to products they did not know existed.

3. Ruthless Inventory

Products need to be converted into sales fast enough to cover rent and wages. Retailers must be disciplined about tracking profit margins and clearing slow-moving stock. The old assumption that "eventually it will sell" kills cash flow.

4. Digital Visibility

If Google business profile, AI assistants, Facebook, local search maps, etc., do not know you, you effectively do not exist to many modern consumers. Digital visibility is the requirement to get many shoppers to your front door.

The Bottom Line

The old retail path relied on a captive, browsing customer. That customer is gone.

Today, many shoppers arrive at your doorstep fully informed, price-aware, and highly protective of their time.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Running a shop means you probably know your regulars by name. But knowing who walks through the door isn't the same as getting them to return. You need to bring those regulars back.

This article explains a retail loyalty programme that runs smoothly, gets repeat purchases, and costs nothing to start.

What Is a Retail Loyalty Programme?

A retail loyalty programme is a customer retention tool that rewards repeat customers with points, store credit, or perks, encouraging continued spending. For example, a shop might give a $10 voucher after a customer spends $200.

Joining should be fast. Aim for under twenty seconds — ask only for a first name and email address. Skip the home address, skip the date of birth. Every extra field is a reason for someone to walk away.

You don't need thousands of members to make this work. I've seen suburban shops with just 300 to 400 active loyalty members comfortably sustain a programme. A shop with 400 members who visit four times a year generates the stable, predictable revenue that makes independent retail viable.

Done right, a loyalty programme will:

• Increase your average basket size — shoppers spend more when they know points are accumulating.
• Drive repeat visits without relying on expensive traditional advertising.
• Give you a concrete reason to contact your community. Instead of waiting behind the counter hoping people walk in, you can actively invite them back. A lotto shop, for instance, can message its VIPs ahead of a superdraw and capture the syndicate spend.

How to Make Loyalty Enrolment Effortless at Checkout

Enrolment is everything. The checkout counter is the single best place to ask someone to join — they've already opened their wallet, and they trust you enough to complete the purchase. A cashier asks:

"Would you like to earn points on this purchase today by joining our VIP club?"

Keep the sign-up to the absolute minimum. First name and email address are enough to get started. A mobile number is a useful backup — customers often forget which email they used, but they always know their phone number.

A digital loyalty system has one killer advantage over physical cards: your customers can never accidentally leave their rewards at home.

What Reward Structure Works Best for a Small Shop?

The best reward structure is transparent. Customers must be able to instantly understand what they get and how quickly they can reach it. If the rules feel vague or the thresholds seem impossible, members will lose interest — and worse, they may feel you're being dishonest.

Keep the thresholds achievable. If the first reward feels completely out of reach, most members will forget they ever signed up.

How Email Marketing Drives Your Loyalty Programme

Email is the most cost-effective way for retailers today to communicate with their customers. It can drive immediate foot traffic. Unlike paid ads or unpredictable Facebook campaigns, sending an email to a database of, say, 400 people costs zero to next to nothing depending on your email service. A local shop can email its entire loyalty list about a new product line in seconds.

We've tested several email platforms for SMB retailers. Our current pick is EmailOctopus; its free plan covers up to 2,500 subscribers and is more than enough to get started. You can always upgrade later once you've learned the ropes and you feel that you need better. Another good choice is BlueFox Email. 

How a POS System Manages Your Loyalty Programme

A POS system is the engine of your loyalty programme. It tracks every customer, sale, and point balance automatically — no spreadsheets, no drawer full of stamped paper cards. When a regular buys their weekly coffee beans, the POS adds points to their profile the moment the receipt prints.

A good POS gives you:

• Instant reporting on who your most valuable VIP shoppers are.
• Automatic rule enforcement — the software handles expiries, returns, and redemptions without manual work. If a customer returns a faulty kettle, the POS deducts the loyalty points they originally earned, keeping the programme perfectly balanced.

What Should You Do Next? A Step-by-Step Action Plan

1. Study what's already working. Look up similar businesses to yours on Facebook. Follow their history — you'll see what campaigns they've run over time. Chances are you're already a member of a few loyalty programmes yourself. Strike up a conversation with the owners: "Tell me, do people use it? I'm thinking of setting one up — how does it go for you?"
2. Simplify your current setup. Strip away unnecessary complications. The simpler your programme, the better it will perform. Aggressively cut any step that doesn't absolutely need to be there. Start small — you can always improve it later.
3. Check your POS technology. Confirm that your existing retail POS can handle loyalty tracking. If it can't, factor that into your decision before you launch.
4. Launch with a welcome email. Use the template below as your starting point:

Subject: Welcome to [Your Shop Name] Club — Here's Your First Reward!

Hi [Customer Name],

Thank you for joining our loyalty programme and supporting a local shop. We love seeing familiar faces, so we want to make your next visit extra special.

Here's 10% off your next purchase — a proper thank you for shopping locally.

Earning rewards with us is simple:
→ Earn 1 point for every dollar you spend.
→ We'll automatically send you a $10 voucher every time you hit 200 points.
→ No manual work, as our POS system tracks everything.

Just show this email or give us your name next time you pop in.

We look forward to seeing you again soon.

Warm regards,
[Your Name]
[Your Shop Name]

Email Frequency

Send one email every other month. Don't overdo it — your reason to reach out should always be genuine. Too many messages and people will unsubscribe or block you. In a future post, I will go over some successful retailers' email newsletters.

Conclusion

A retail loyalty programme is the single best tool a small shop has to secure steady cash flow and build a community of returning locals. Keep the rules simple. Go digital-first. Make enrolment effortless. Your customers — and your bottom line — will thank you.

Start small, learn fast, and let your regulars do the rest.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Negative inventory, also known as negative stock, is when your system shows that item quantities are negative. For SMB retailers, this is a warning sign of serious inventory management issues that need immediate attention. Every instance points to deeper problems in your POS system. If not fixed, this negative stock can quickly lead to significant issues.

Understanding the causes of negative stock is a first step toward resolving these discrepancies.

Understanding negative stock

When your records display negative stock, your stock quantities information is unreliable, making it difficult to make informed business decisions. As a result, staff may lose trust in the POS system and hesitate to rely on its information. If the staff start to realise that your controls are weak, it can be disastrous as it invites staff theft.

Additionally, negative inventory distorts sales, purchasing, and financial reports, making it more difficult to analyse performance.

Beyond data reliability, negative inventory also disrupts key business reports.

Causes of Negative Inventory and How to Prevent Them

Negative stock usually results from a mix of factors. -Delays in processing supplier invoices (leading to sales before stock is entered into the POS System) -Errors in supplier invoices -Staff entering incorrect quantities.

Fortunately, some preventative measures can help minimise these inventory incidents.

Preventing negative inventory starts with robust staff training. Ensure your team understands correct inventory procedures and that you consider accurate data entry essential. Check carefully that suppliers' electronic invoices match the deliveries. Implementing barcode scanning for both receiving and selling stock significantly reduces manual entry errors.

Improve Barcode Scanning Discipline

Negative inventory often occurs when cashiers bypass barcode scanning and manually key in an item, accidentally selecting the wrong product (SKU). The system depletes the stock of the wrong item,driving it negative, while the item that was actually sold remains overstated in the system. We need to strictly enforce barcode scanning at the register. If necessary, require manager approval for cashiers to manually type in SKUs. 

Financial and Customer Service Consequences

Negative stock can have significant financial consequences, as it distorts your KPIs and leads to incorrect calculations of the cost of goods sold (COGS) and profit margins.

Possibly the biggest problem is that it will result in inaccurate GST tax reporting.

From a customer service perspective, negative inventory can lead to lost sales and a poor customer experience, as the computer indicates that you do not have stock when, in fact, you do have the stock the customer is looking for to buy.

Detecting and Correcting Negative Inventory

To address negative inventory, use your POS system to run reports like 'Quantity On Hand' or 'Price Check.' It is easier to do it one department at a time rather than the whole shop at once. Items with negative quantities are clearly shown. Please investigate each case to identify whether the cause is a counting error, data entry mistake, or delayed invoice.

These financial inaccuracies also impact customer service in tangible ways.

Finding the negative stock

Fortunately, we have a quick and easy way to check stock quantities for what you have on hand.
 
Go to reports. There is an option for Quantity On Hand and Price check; click on that.

We exclude items with zero stock. 
 
I suggest doing it by department, so in this example, I picked the dissection (department) tobacco. 
 

Now, in the outcomes report, which lists the details of your item, look at the quantities on hand in the QOH column. You may see items in brackets, as indicated by the green arrow below; these are the negative Stock Discrepancies.

At first, you will find it a lot of work to fix it, but once done, it's relatively quick.

You should frequently check this report for negative stock values, say monthly until the problem is fixed.

Now, audit these negative items to determine what went wrong in your inventory management system.

Inventory Adjustment Best Practices

After completing a stocktake, your inventory figures are at their most accurate. So it is the ideal time to review and correct any discrepancies.

When making inventory adjustments, it is a good idea to determine the reason for each correction. It can reduce the problem in the future.

Real-World Example: The Cost of Negative Inventory

A staff member mistakenly told a customer that the item was out of stock when it was actually in stock. It led to a lost sale for the business. When the staff member saw they had the jumpers, they reported this to the owner. What she found was a negative quantity for a popular jumper. However, upon investigation, they discovered that they had not entered a recent delivery invoice.

Empowering Your Retail Business

With proactive prevention and early detection, negative inventory can be handled by utilising tools like our reports to stay informed about your stock quantities.

Only by understanding the causes can you fix the problem.

Let us know if you have any other questions!

*This article draws on industry best practices and current expert recommendations to help SMB retailers understand and tackle negative inventory.

I would like to thank  mentoring software  for their help with this article.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Recently, I was reading a fascinating book about AI in modern legal practice and realised much of it would apply to retail too. The gap isn't whether they use artificial intelligence; it is understanding where it fails and where human control remains essential. What we need to do is safely use AI as an assistant while protecting our stores from its blind spots.

Key Takeaways

• AI drafting tools can only generate rough, initial versions of marketing content and product descriptions.
• Human reviewers must rigorously check all AI-generated text because the software frequently invents incorrect facts, prices, and legal statements.
• Retailers remain legally and commercially responsible for all their published errors.
• Sensitive customer data and wholesale pricing must never be pasted into public AI platforms without a thorough understanding of the provider's privacy rules.
• Sharing confidential material with an outside AI provider may create contractual, privacy, or legal issues for your business.
• Privacy Act obligations apply strictly to customer information even when you use AI to draft emails or handle complaints.

What Is an AI Drafting Tool?

An AI drafting tool is software that quickly creates a first draft of text for review, correction, and finalisation. Our survey shows our retail clients mainly use AI for advertising, such as drafting Father's Day promotional emails. Here, the AI is not an expert. It is not a decision-maker; you are. It must function solely as a brainstorming helper, aiding in organising ideas and overcoming writer's block, thereby speeding up your workflow.

Why Does Human Oversight in Retail AI Matter?

Crucially, human oversight matters partly because artificial intelligence lacks your real-world commercial context and because it is not factually reliable. You cannot simply trust software to understand the nuanced tone of your local business or the specific legalities of your supplier contracts.

Why Does AI Sound Confident Even When It Is Wrong?

An AI is trained to sound confident. They train it to give you what it thinks you want. If you ask it to describe a new candle brand, it might say it has a 100-hour burn time simply because that phrasing sounds good to it. This is what one of my clients got. The problem was that the candle certainly didn't have a 100-hour burn time, not even close.

I had a client disputing his claim for money owed by a private superannuation fund. The AI prepared a highly formal, legally sound letter threatening to escalate the matter to a small-claims tribunal, if it was not paid. He sent it and was ignored. In frustration as time was running out, he lodged his complaint with the small claims tribunal. The tribunal rejected the action because the AI had completely misunderstood the legal structure of the superannuation fund involved. What the AI had created was polished legal rubbish. When queried later, the AI system admitted it had mucked up the legal positioning. It did not help my client by then. His legal position was worse too as he blamed the wrong person. Just because the AI was smooth and fluent did not prove it was accurate.

Checking the Crucial Details

Inevitably, you must review specific elements whenever AI drafts your seasonal promotional copy or event notices. Specifically, you need to verify rigorously:

• Product names and brand descriptions
• Prices and sale conditions
• Dates, times, and store locations
• Stock availability
• Supplier details
• Store contact information and correct spelling
• Whether the tone sounds like your business

I often ask a second AI system to review the draft for possible errors. This can sometimes identify problems. It's not foolproof, but it often works. Here is the prompt I use, feel free to use it or modify it. I think you will find it useful too. 

What Sensitive Information Should Retailers Hide from AI?

Legally, you should be careful about putting sensitive information into a consumer AI tool.

Specifically, sensitive information could include:

• Customer names, email addresses and phone numbers
• Employee details, payroll information or performance issues
• Supplier contracts, wholesale prices and confidential terms
• Financial figures, margins, forecasts and banking information
• Unpublished business plans and new product strategies
• Legal disputes, personal matters or documents that may be legally sensitive

Privacy and Confidentiality

Sharing confidential material with an AI provider may cause privacy breaches and may also violate agreements. Simply entering it into an AI chat might make it public. Supplier agreements often contain confidentiality clauses. Customer information is covered by the Australian Privacy Act. You carry its strict obligations. The legal consequences will depend on the facts. However, a business should not take unnecessary risks with information that could harm customers, employees, suppliers, or the business itself if disclosed.

Consider Local AI, which I previously looked into for AI for Australian retailers. I will need to do an update soon, as so much of the technology has changed, but the central issue here of privacy remains important.

What Are the Best Next Steps for Retailers Using AI?

Set a clear, simple rule for your entire team that a human approves the final version. 

Review the privacy settings of your AI tools.

Opt out of data-sharing features if you are worried.

Do not use public AI systems with your confidential information.

What Is the Final Word on Keeping AI in Its Lane?

In conclusion, AI serves as an incredibly helpful drafting tool that generates fresh ideas and improves your wording quickly. Modern retailers now use it continuously.

Finally, if you would like to read the legal book that originally prompted these thoughts about AI, please let me know. I can easily get you a copy, and it is not expensive at all!

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.