Curb Employee Theft With These 11 Tips

Posted on July 15, 2014

Theft. It’s a dirty little word that strikes fear in even the most diligent business owner. We’ve discussed agriculture and copper wire theft in the past along with security solutions that can be used to help curb it, but what about good ‘ol stealing from a regular business? Are there ways that owners can help stop it?Locked_Money

The Dollars and Cents of Theft

According to the 26th Annual Retail Theft Survey, conducted by Jack L. Hayes International, approximately 1.2 million shoplifters and dishonest employees were apprehended in 2013 from survey participants.*

Employee Theft Statistics

  • 78,085 dishonest employees were apprehended in 2013, up 6.5% from 2012.
  • More than $55 million was recovered from employee apprehensions in 2013, up 2.5% from 2012.

Shoplifter Theft Statistics

  • 1,102,635 shoplifters were apprehended in 2013, up 2.5% in 2012
  • More than $144 million was recovered from apprehended shoplifters, an increase of 4.5% from 2012.

Surprisingly, on a per-case average, dishonest employees steal 5.4 times the amount stolen by shoplifters – $706.21 vs $130.89. A lot of emphasis has been put on stopping theft from the public but how much thought have you put in to stopping your own employees stealing from you?

Curb Employee Theft

It is absolutely impossible to be everywhere all at once at your store but there are tactics that you can implement to help curb theft at your business. The more diligent you are at setting and following these tactics, the more successful you will be at decreasing your losses.

1. Run Background Checks One of the most proactive things you can do when hiring a new employee is to conduct a background check. The old adage goes, “never judge a book by its cover,” and this is absolutely true in the hiring process. There are a few key areas that you should focus on when conducting a check:

  • Criminal history – crimes involving fraud, theft and/or violence
  • Civil history – pending and past lawsuits for collections, restraining order and fraud
  • Driver’s license – check for serious violations
  • Verify education from accredited institutions

2. Two Employees Are Better Than One If at all possible, staff two employees to work at the same time. Having that extra staff member may deter unlawful activity.

3. Monitor Trash Removal Nobody really likes to take out the trash. It’s a dirty job. But less than honest employees can use this as a way to transport merchandise outside without being detected. Use clear garbage bags and designate trustworthy employees for trash duty. It may seem like a punishment to them, but it could end up saving the company money in the end.

4. Create an Anonymous Reporting System Nobody wants to be a tattletale. Make it easier for employees to report things that they see by creating an anonymous phone number or online submission form where they can safely and anonymously report suspicious activity. Keep in mind, if an employee reports something you must keep it secret, even if you figure out who reported it. Anonymity is the name of the game and the key to this program’s success.

5. Get to Know Your Employees It may sound silly but employees may feel less inclined to steal from an employer that they have some sort of relationship with. Make it a point to get to know your employees and their names. Engage when possible and show that you care. Establishing a culture of familiarity may add a little extra guilt to any employee who thinks of stealing from you.

6. Install a Video Surveillance System You can’t have eyes in the back of your head but you can install another pair of eyes that will watch your business, employees and even your cash register 24/7.

7. Educate Your Employees on Policy and Consequences Conduct a new hire orientation and follow up training throughout the year to teach and remind employees of the rules and consequences. It should be unacceptable for any employee at any point to say “I didn’t know that was a rule,” or “Nobody told me I couldn’t do that.” Remember – knowledge is power.

8. Perform Regular and Irregular Audits It’s one thing to audit your financials, but do you ever physically audit your inventory? Schedule regular and irregular audits throughout the year to keep track of your merchandise. It could be as easy as stopping in on your day off just the check on the amount of potatoes you have in your restaurant or the amount of purses on your shelves. The irregular audits will help deter employees from stealing because they won’t be able to tell when you are watching.

9. Limit the Personal Items Employees Can Bring to Work Have an issue with items disappearing throughout the week? Why not limit the personal belongings that employees bring into your store. The less they bring in, the fewer places they have to hide things. An old employee from a large retailer recounted how her and her fellow employees were only allowed to bring clear bags to work and had to check them in and out with a security guard. This extra step made it nearly impossible to employees to leave with merchandise at the end of the shift.

10. Make Reprimand Visible It’s one thing to say what the consequences of theft will be but it’s another to actually follow through with them. If the employee handbook says that the authorities will be called if you shoplift make sure they are called each and every time. One retailer used to wait until an employee’s shift was almost over and then would have the police escort them throughout the store, sending a clear message that the consequences would be enforced.

11. Use Biometrics to Track Employees Did you know fudging the numbers on a time sheet is actually stealing? An extra 5 minutes here, an extra 10 minutes there can really add up if gone undetected. Make sure your employee’s are where they are supposed to be when they are supposed to be by installing a biometric system. Key cards and pin numbers can be given to other employees for use but a fingerprint is yours and yours alone. While there is no way to absolutely stop employee theft, there are many things you can do to deter it. Whether it is a single security camera pointed at a cash register to an entire security system, there is technology to help give you peace of mind when you aren’t there.