I have seen how retail frauds severely impact retailers. As a retailer with a brick-and-mortar store, you're likely aware of the various business challenges. Void fraud is one of the worst threats to your business, as it attempts to bypass the security in your POS system.
What is POS Void Fraud?
POS void fraud is a sneaky tactic where unscrupulous workers process a sale, take the customer's money, and then erase the transaction from the system, effectively taking the cash without leaving evidence.
The Mechanics of Void Fraud
Here's how it typically works:
- The employee processes a legitimate cash sale.
- They void the transaction after the customer leaves
- The cash is pocketed, and no record of the sale remains
- End-of-day totals appear to balance.
It's a sneaky tactic that can be hard to spot without the proper controls.
Customers returning with queries about purchases not in the POS system are the primary method of catching these people. To make this legally stick, you need cameras on the till. This appears to be the only evidence the courts now accept.
Red Flags to Watch For
In my experience, several warning signs might help indicate void fraud is occurring:
- An unusually high number of voided or no-sale transactions
- Voids and no-sales happening at odd times or consistently by the same employee
- Frequent voids for high-value items
- Suddenly, low rates of cash
Suspicious Employee Behaviour
Be on the lookout for staff members who:
- Frequently process transactions without customers present
- Insist on handling specific customers or transactions themselves
- Are overly protective of their register or reluctant to take breaks
- Want to work alone?
Regular audits and rotating staff assignments can deter potential fraudsters.
POS fraud prevention
1. Implement Strict Void Policies
- Limit void permissions: Only allow trusted senior staff to process voids
- Require approval: Set up your POS system to need manager approval for voids
- Document reasons: Make it mandatory to record a reason for each void
2. Utilise Technology
Modern POS software offers powerful tools to combat fraud:
- Real-time alerts: Get notified instantly of suspicious void patterns
- Integrated camera systems: Link transactions to video footage for easy review
- Detailed reporting: Analyse void trends and identify potential issues
3. What to do
- Do not ignore the seriousness of void fraud
- Proper cash handling procedures
- Spot and report suspicious behaviour
- Review your security camera footage regularly, mainly when a person is alone.
- Conduct frequent, unannounced audits of Void and No-sale transactions
A Personal Anecdote
I once worked with a small newsagency that discovered they were losing thousands of dollars to void fraud. The employee was ringing up transactions in the customer section, issuing receipts and then voiding the transaction in the cash register. We cut their losses almost immediately, needless to say, the owner.
Retail fraud detection
The first point is to check whether many of these voided transactions are occurring and when and who is doing them.
Easy enough to do: go to main menu > Cash register > Transaction Enquiry (see green arrow)
Now, search the transactions by ticking them as in the green arrow with voided entries only.
Now, look at what is happening.
Employee theft prevention
If you do not have our POS system to help prevent a void fraud, look for these features:
| Feature | Benefit |
|---|---|
| User-specific logins | Tracks who performs each transaction |
| Tiered access levels | Limits void permissions to trusted staff |
| Detailed void reports | It helps identify suspicious patterns |
| Integration with CCTV | Links transactions to video evidence |
Conclusion
While POS void fraud poses significant problems, implementing effective strategies and our cutting-edge tools can safeguard your business. Remember, proactive measures trump reactive ones.
