Loss prevention is big business, and with over 27 million shoplifters in the nation today, it may be tempting to focus your efforts on people outside of your store. While it’s true that professional shoplifters can do damage to your bottom line, they make up a very low percentage of those who steal (just 3%.) Your everyday, casual shoplifter, while more common, isn’t as likely to steal as much per episode than someone doing an “inside job.”
Surprisingly, it’s the more than 40,000 employees that were ticketed or arrested in 2017 for stealing that had a total recovery of over $38 million in stolen goods and cash; the average case value was more than twice that of a shoplifter. Imagine how much of that wasn’t recovered? Are you losing money you don’t even know about?
The data doesn’t lie. Smart business should continue their external loss prevention efforts, with a continued focus on employee crimes. Here are some of the recommended methods for keeping embezzlement, employee fraud, and internal theft to a minimum.
You wouldn’t think that a potential criminal would admit to theft in advance, but the stats show otherwise. A recent theft survey revealed that, when asked to answer direct questions on a job application (such as “Have you stolen money in the past three years?” or “Could you be tempted to steal from your employer?”), employees who answered unfavorably were much more likely to steal. In fact, those who admit to prior thefts were labeled “high risk” and stole an average of $692.03 per respondent. This was much higher than the average of $58.56 for “low risk” applicants who denied having a history or predisposition toward stealing.
Bottom Line: If your job application doesn’t include “yes” or “no” statements relating to theft, add them. Follow state and local labor laws to make sure you don’t violate hiring rules.
2. Discourage “big ticket” Theft
Many employers mistakenly assume that the majority of theft happens over a long period, and with items that have minimal value. The adage of the employee stealing post-it notes from the supply closet is our most common picture of what theft would look like. In reality, someone likely to steal won’t stop at inexpensive items, and the average value for recovered theft cases is around $966. (That would take a lot of paperclips!)
Bottom Line: Prevent access to expensive merchandise and equipment by anyone who does not need it to do their job. Only give the handling of cash to those who can be trusted. If you have to allow unproven workers to run the till, limit cash amounts and do more frequent counts.
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3. Monitor Everyone
In today’s age of viral videos and doorbell cameras, it’s pretty much assumed that someone is watching you. Employees do have some right to privacy in specific areas of the business – such as changing rooms and restrooms – but not anywhere else. Make sure that employees know that they are being monitored, as simply knowing this can dampen any impulsive urges to steal. If nothing else, you can catch crimes quickly, on the first or second attempt, instead of discovering a long history of embezzlement and theft further down the road.
Bottom Line: Invest in high-definition cameras that can provide the resolution you need to identify any wayward employees. Place them anywhere employees work, including storage rooms and loading docks, and review footage at least weekly.
4. Buddy Up
There’s accountability in groups, and employees are less likely to steal if a coworker is watching. Have no fewer than two people in areas where cash is handled, and send helpers to do things like count inventory or sign for deliveries. While this won’t prevent all loss, it’s another obstacle for thieves to overcome.
Bottom Line: Pair newer, less-proven workers with those who have established trust. Give all employees a way to notify management of suspected theft – even if it is an anonymous tip line.
5. Watch the Doors
Keeping an eye on points of entry is a good way to discourage theft. While you can’t go through employees personal belongings, you can limit what gets brought into your establishment. You may consider prohibiting large duffel bags, backpacks, and containers that can easily be used to smuggle out merchandise. Only allow your most trusted employees to take out trash, recycling, or package shipments.
Bottom Line: Easy in also means easy out. Be watchful for all the places and ways that workers enter and leave the building, and make it keep breakrooms and employee “hang out” areas far away from where valuable merchandise and cash is kept.
6. Be Present
Finally, getting to know your workers may have more effect than any other piece of advice. By having a genuine relationship, being privy to personal information, and knowing their life struggles, it’s possible to identify risks early. If the worker is genuinely in a hard spot, you can refer them to safe, legal resources to help with their situation. If nothing else, knowing about other risky activities can help you know what to guard against.
What should you do, if, after all your efforts, you do catch an employee stealing? It can be tempting to let first-time offenders go with a warning, especially if you feel like the worker is valuable in other ways. The statistics show that theft crimes are rarely a one-and-done activity, however. Workers who feel it is safe to cross the boundary of theft will usually continue pushing the line and are more likely to engage in risky behavior that can harm your business. Whether you choose to press charges – or simply let the employee go – it’s best to confront the activity head on and send the message to the rest of your team that theft will on be tolerated.
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