In retail, internal theft detection and prevention at the point of sale remains a significant challenge. Despite the fact that it is widely recognised that sales transactions which include voids, price overrides, refunds, discounts, coupon or voucher redemptions, dump code sales, no sales, low average value per item and suspended transactions amongst others, whether in isolation or not, are a great risk to retail businesses.
The retail industry, in particular the retail loss prevention industry, agree that many types of fraud and theft exist and occur as a direct result of PoS systems delivering such capability - Refund Fraud, Collusion and Sweethearting, Loyalty and Gift Card Abuse, Cash Loss, Price Manipulation, Voids and Tender Abuse are all prevalent across all retail sectors.
Why? The problem is that these point of sale functions are both vital and necessary in everyday trading processes to deliver customer service and so cannot easily be eliminated. Although controls can be, and are, put in place, the functionality will always be required to be available to certain employees. Controls can succeed or fail, but in all cases the opportunity and capability to cause loss, whether deliberate or otherwise will remain and the retailer's ability to prevent and detect internal theft will be challenged.
It is a known fact that in almost all cases, loss generating transaction activity, whether internal theft or loss as the result of cashier error will be almost invisible amongst the millions of genuine transactions undertaken daily.
Retail loss prevention data mining and analysis, when applied correctly to a retailer's transaction activity, will always be a significant enabler to detect and prevent internal theft, fraud and other losses at a retailer's tills.