As is the case with any business, and especially in the quick-service restaurant industry, maintaining profitability requires having and upholding strict internal controls. Without them, valuable sales dollars never find their way to your bottom line.
When the viability of your business depends on capturing every penny from every transaction, and when an estimated 7% of restaurant industry annual sales are lost to theft, keeping any and all fraud out of the equation is a must!
When operating a McDonald's, the first line of defense, when comes it comes to combatting fraud, can be drawn at the front counter. The point of sale (POS), or register, is where transactions are recorded, money is collected, and unfortunately, is often the first place where fraud occurs.
An easy solution
One prominent opportunity for abuse is at the POS, but one that can be mitigated through proper internal controls is manual overrides, also known as "T-Reds." Manual overrides typically occur when a sales transaction needs to be voided or changed and can only be fully executed by entering a password or PIN into the POS for final verification. It is up to each organization to decide who has access to this password or PIN, but in most cases, it will be the managers. Fraudulent manual overrides are often the result when the managers give out their PIN to other crew members, whether through misplaced trust or misperceived necessity, thus eliminating any real barrier to manipulating the sales transaction data.
An ounce of prevention equals a pound of cure
Don’t wait until it seems like something is wrong before taking preventative steps. Implement these simple steps today to help prevent fraud.
1) First and foremost, protect the POS password, or PIN; it must not be shared for any reason.
2) Change the PIN frequently. These changes should occur daily or at the very least, every few days, to ensure security.
While this POS password or PIN technology is not necessarily new, its weaknesses may warrant a renewed internal control assessment.
As a rule of thumb, whenever there is a change in technology procedures affecting the front counter and/or drive thru, we recommend designating a point person in your organization to follow-up and monitor key internal control statistics. In the case of T-Reds, you or the point person should track the frequency and dollar amounts that T-Reds occur. Use R2D2 reports or set-up QSR-Soft e-mail notifications to help keep you informed so you can stay ahead of potential theft.
Cash controls are a huge opportunity for the McDonald’s system as a whole. If you invest in and commit to strong internal cash controls, you’ll help maximize profits and reap greater benefits from your hard work!
