Five finger discounts. Every business has it. Face it. Employees steal. As a business owner you may feel you want to trust your employees, and why not? You hired them to do an important job for you and you can’t do it all.
But trusting your employees can set you and your business up for a big disappointment in lost profits. Chances are very high that if you have employees, you have a thief on your payroll. According to the US Chamber of Commerce, 75% of employees steal from their boss and do so on a regular basis. According to a retail theft survey conducted by Jack L. Hayes International, a loss prevention consulting firm, one out of every 40 employees was apprehended for theft by their employer in 2012. The survey also found that employees steal 5.5 times more than shoplifters. In fact, a typical business can lose as much as 5% of its annual revenue to employee fraud.
While these statistics and the premise of employees stealing from you might get your blood boiling, there are some things you can do to reduce employee theft in your business.
Hire Quality People.
Run a background check and drug test on new hires. Employees with drug addictions are at higher risk for stealing to support their habit. Also, if someone has been convicted of a larceny in the past, then you don’t want them handling your money or coming near your inventory.
Tag Team Your Closing & Opening Crew
Having only one person opening or closing your store can almost immediately set you up for theft. This creates an easy opportunity for minor theft as the employee begins to realize that nobody is around and he or she can experiment with pilfering. Having two employees work for both opening and closing to limit opportunity.
Have a Second Set of Eyes on Refunds
Having two supervisors on crew to monitor refunds and approve them will help reduce fraudulent transactions at the register. Embezzlement is rooted in a lack of oversight and can cost more than inventory shrinkage.
Lock Down the Network
High profile breaches like Target and Adobe have made 2013 an unforgettable year for credit card users. This makes securing your network and keeping your employees away from digital records critical. Make certain no employee has administrator access to any system from the POS computer to the server and firewall. According to the FBI 65% of hacking is caused by insiders.
Use a Digital Manager
People will be less likely to steal if they know that you are always watching. A video surveillance system helps deter employees as well as catch theft after it happens. Install cameras in storage rooms, shipping & receiving areas, safes, server and network room as well as in the store. You should always use the highest definition video you can afford so you can clearly identify employees and transactions. Some systems use intelligent software known as video analytics to alert you when something needs your attention. You should also monitor the areas used for trash removal. Employees often steal merchandise by stashing it in the outgoing trash and then retrieving it later from the outside trashcan or dumpster.
Zero Tolerance Policy
Put in your employee handbook (you do have one, right?) that your business has a strict anti-theft policy and all theft will get prosecuted, even if you don’t plan on it.
It’s much easier to steal from someone you don’t know very well, but it is much harder to steal from someone with whom you have a relationship. Connect with your employees and being aware if they are going through financial difficulties or high levels of stress, which can increase the impulse to steal.
We hope you never have to experience employee theft in your organization but the numbers prove that you will eventually. You just need to reduce it or curtail its effects.
Everyday, we hear the same thing from customers and would-be-customers, “I should have called you before this happened!” While we appreciate the call, our goal is to ensure that each customer is protected and safe from the many perils that can befall a business owner. Call us today for your FREE 100 Point Commercial Assessment.