Familiar with “Overs and Shorts” in Retailing?
“Overs and shorts” is an important process in stores at the end of the trading day. It starts with cashing up the registers when the store closes. Best practice to minimize potential losses is for the people that cash up the registers to do blind declarations. They open the drawer, count the money in it and then key the result of their count into the register. The register compares their count to what it has calculated through the day and tells the cashier if they got it their count wrong but does not tell them its answer. This gives the cashier the opportunity to correct their count or perhaps to put some money back in if they know they had taken some.
The overs and shorts analysis then compares the cash and cash equivalents on hand verses what each register says it received. Staff make occasional errors with change. Customers almost always tell them when they get too little and often don’t tell them if they get too much. Hence, over a number of days the shorts exceed the overs leaving a slight negative. That’s normal, but knowing when it gets bigger because someone is stealing from the store is important. The earlier the manager spots the loss and deals with it, the better the store results will be. There are a number of key analyses that should be conducted to find the root cause of an overs and shorts problem.
We’ll look at what these are in next week’s Martec Minute. In the meantime, if you have access to Martec’s Retail and Consumer Goods knowledge base, you can learn more here.-
Posted by Brian Hume
7th March 2025
