PEMBROKE, Mass. —Three recent incidents lead me to believe that you, Mr. or Mrs. Dry Cleaner, are losing money at the counter.
A friend and I have breakfast every week at a coffee shop and the bill comes to $12. One week when we ate there, the waitress handed us a bill for $6.50. After trying to figure out what she did, we finally paid our bill and walked out.
At a “big box” store, I purchased an item for $11.42. I handed the clerk a $10 bill and a $5 bill and dug out of my pocket 42 cents, expecting to receive an even $4. Instead he handed me a $5, thinking that the change meant he owed me a fiver.
At a dry cleaner, I handed the counter staffer a $20 bill to pay a $14.25 invoice, and she refunded me $8.75.
Must be the new math. Maybe it’s that some high school graduates never really learned basic arithmetic and can’t count. Or maybe it’s that these employees just don’t care, and are going through the motions of doing their job. “What’s the big deal? Hand out a ten, hand out a five, hand out a one—it means nothing to me. Besides, the boss is a real jerk,” goes the mindset.
Whatever the reason, watch out. You might be losing money out of your front counter.
This is unfortunate, because there’s no reason there should be an unwarranted outflow. You have proper procedures. You have an up-to-date, computerized register. You have checks and balances. But, you also have staffers who just aren’t paying attention.
When I owned a business, often at the end of the workday, around 7 or 8 p.m., I would review my 150 invoices and wonder if and where money was trickling out unintentionally. It was all paper I was dealing with, and I made sure enough stuck so I was able to pay the bills and pay my 17 employees their salaries, but I felt that there could be leakages.
So I sat there, in the semi-darkness, thinking about leakages in the system. If an invoice was lost, money was out the window. If items weren’t included in the billing, money was out the window. If there were arithmetic mistakes, money was out the window.
If an employee was taking cash out of the register, money was out the window. If a staffer was stealing stock, money was out the window. I would envision my business as a Rube Goldberg contraption from which money could be dripping out of any of a half-dozen points or more.
A year after I sold my business (and was relieved of the constant worrying), a former supplier of mine declared bankruptcy. He told me his bookkeeper had bled him dry, stealing $4 million over 10 years. While I’d like to think I would have caught that one, I understand how unwarranted outflows occur and often aren’t detected until it’s too late. All this was before the computer, but leakages are a fact of life in American businesses even now.
So watch out. Spot-check your staffers. Without being obvious, observe the money transactions over the counter. When you hire a newcomer, review his/her math skills. If there is some deficiency, provide a remedial course to improve skills. Never, ever assume it is being done correctly. As the examples I’ve described show, there will be surprises.
If you do not use a computerized system that provides complete control, be especially vigilant. There is little control that the staffer is charging correctly, taking in the money accurately, and handing out the correct change. There is little control between staffers. There is little backup documentation to make a case against pilferage. At the end of the day, you have some money in the till, a tape, and you pretty much assume accuracy.
But even if you have a fully computerized system that tells the staffer how much to give the customer, there could be mistakes. At the end of the day, if there is a $25 discrepancy between the computerized figure and the actual tally, most dry cleaners would ignore the discrepancy. This is a mistake. When you find a discrepancy, spend the time to figure out what went wrong and who did it and why. Certainly, $25 won’t break the bank, but by being vigilant, it shows your staffers that you are serious about wanting to preserve the integrity of the company’s cash flow. It shows that you won’t tolerate leakages.
One dry cleaner employs a “shopper spy” to go to his six stores, where she makes transactions and files reports on the findings. On these visits, the mystery shopper deliberately tries to trip up the counter person by handing the staffer paper plus change, trying to make conversation, and questioning invoices.
Another dry cleaner employs cameras trained to go close up to the transaction. From his office, the dry cleaner can beam in on the transaction and see that it was done right. He can check the counter staffer anytime he is in his office, working on paperwork.
When you discover a mistake, don’t rush out while the customer is there. Rather, wait until the counter person is free to explain what you saw and let him/her give his/her side of the transaction. Maybe the staffer did hand the customer a dollar bill instead of a five as you perceived. If you can do a register spot-check, do so. The first check is not to scold the counter staffer but to show that you are watching, that you are paying attention to every transaction. But if this becomes habitual practice, then you must take action.
Of course, if you find a staffer has pilfered register money, you have no option but to dismiss the person. Giving a second chance will not change human nature. Overlooking the theft because of the person’s other contributions shows your too-lax management style. Setting up stronger controls will only encourage the offending employee to be clever in his deceptions. Above all, remember that dishonesty is a lack of character, and it is hard to break that weakness.
You can’t tolerate theft in your business. But inattention, sloppiness, lack of focus, and carelessness are also unacceptable. Insist that your people handle each transaction accurately, and spot-check to make sure that they are doing so. It might be only five dollars a day in mistakes, but that amounts to $1,500 a year you didn’t receive. That’s a serious leakage.
Have a question or comment? E-mail our editor Dave Davis at [email protected].