How to minimize employee theft

Late last year the National Retail Federation noted that while shoplifting is the leading cause of retail shrink, employee theft is only marginally behind.

Their 2018 research found one third (33.2 per cent) of all retail loss came down to employee theft, effectively costing the industry around $15 billion.

Here are the top tips for minimizing employee theft…

Screening

Thwarting employee theft starts with minimizing the type of people you have in your business who are likely to steal, and that comes down to good employee screening.

As part of the employment process, all potential staff should be interviewed, their references and referees should be validated, and where possible their criminal history should be checked.

Training is a critical component of loss prevention in general.

The right training allows staff to understand the signs of shoplifting and how to address it, along with the proper processes and systems that minimize internal error and loss that can’t be accounted for.

Meanwhile, training on employee theft in particular helps staff understand what to do if they feel a fellow staff member is doing the wrong thing, and better understand the repercussions if they are tempted to steal.

Morale

Quite simply, staff who feel valued, appreciated and adequately remunerated are less likely to steal, with ‘retribution’ renowned as one of the major reasons for employee theft.

This also continues further to morale in general, with staff who feel happy, part of a positive work environment and part of a team also less likely to do the wrong thing.

Policy

All retailers should have clear policies on what type of behavior is appropriate within a workplace, and what type of actions are unacceptable. This clear policy allows staff to understand what is expected and what the repercussions will be should someone steal.

Remove opportunity

Temptation plays a role in both shoplifting and employee theft. The less opportunity there is for a staff member to steal, the less likely it is that they will.

Measures that remove opportunity include having a supervisor on duty, requiring access codes for the Point of Sale, using security tags, and employing smart cabinet locks and keys that track which staff member opens what cabinet or drawer within a store.

Meanwhile, Loss Prevention Magazine suggests implementing a two-person rule for the handling of high value stock.

“Don’t just require that two individuals be present when in the presence of extreme valuables; require that they are from different departments,” they recommend.

“Individuals who report to different chains of command and who do not regularly interact are less likely to form the kind of trust required for successful collusion, or suffer the same disgruntlement to motivate theft.”

Monitoring

Visible monitoring like CCTV can also reduce the likelihood of employee theft, particularly in areas like the Point of Sale. If your staff are aware they are under surveillance, they are less to steal, but there is a fine between the normal monitoring of a retail outlet and implying that staff are not trusted.

Emotional investment

Staff who are emotionally invested in the welfare of a retail outlet are also more likely to act in its best interests. That means they should be involved in discussion about loss prevention and aware how employee theft impacts a retailer financially and ultimately affects their own job security.

Loss Prevention Magazine notes managers who reinforce the message that good security protects the livelihoods of every employee report the most success.

Meanwhile, they also explain having staff involved in the security conversation and rewarded for their contribution also assists in minimizing employee theft.

“One step every organization should take is to consciously reward, rather than marginalize, employees who point out security vulnerabilities and options for improvement,” they note.

The final word

While shoplifting is the loss prevention problem that hits retailers’ bottom line the hardest, employee theft is often the crime that takes the greatest emotional toll.

It occurs at the hands of people who are trusted and considered part of a team, and losses can often be significant before the cause of the problem is determined.

Like all loss prevention, minimizing employee theft requires a mix of strategies, but at its core it is often about good policy, good management and good people skills, with a little technology utilized to assist.