Here are surprising facts about employee theft that you should know:
- TD Bank estimates that employee theft is a factor in the bankruptcy of 10 % of failed SME’s.
- Employees are responsible for about 33 % of the annual $4billion Canadian retailers lose to shrinkage, like theft.
- Retail profit margins are often slim, and it can take as many as seven customer sales to recover the financial loss of a small $3 theft.
Ways that Employees Steal
Dishonest employees are resourceful, judging by the almost limitless techniques they use to steal from their employers. They may steal merchandise and conceal it in trash, their vehicle, in storage areas or personal belongings. There are a dozen methods for skimming cash drawers or cheating customers who use gift cards. Many dishonest workers have an accomplice who acts as a normal customer in order to make fraudulent merchandise returns that put money in their pockets.
Why Employees Steal
There is no valid reason for employees to steal from an employer, but understanding the most common justifications can improve your education and detection efforts:
- Revenge for a perceived slight by the employer.
- They feel entitled to a “bonus” and do not consider that it hurts anyone.
- They suffer from an uncontrollable compulsion to steal.
- They have severe financial problems.
Steps You Can Take to Prevent Employees Stealing
- The applications of new hires must be analyzed thoroughly. Check all references and consult prior employers. Check public records for possible criminal activity and use screening tools such as the Forte Study.
- Create a presentation that outlines why employees steal, a sampling of their methods, a sampling of your detection methods and the consequences to them if they are caught. Make this presentation part of your basic workplace orientation process.
- Maintain an inventory system on everything inside your business. This includes the office supply cabinet, the lunchroom, incoming stock and so on. At the very least, go through the motions of a weekly inventory so that employees know you are paying attention.
- Watch for telltale signs that your employees are stealing such as tally marks by registers, frequent trips to their car, POS exception reports, a marked change in work habits, discrepancies on their time sheets or repeated complaints about compensation.
- If you keep your stockroom locked, use tamper-proof locks that are not susceptible to picking or key bumping. Electronic locks with punch codes or card swipes can track which workers enter and leave storage areas and at what times.
- Install CCTV cameras over registers and anywhere else where valuable merchandise is not clearly visible to everyone. Consider installing a modern camera, sensor and alarm system that allows you to monitor your premises from any device with an Internet connection.
If You Suspect an Employee Has Stolen Something
Confronting an employee about stealing is a difficult situation for both of you. Before this situation arises, develop a written procedure to follow that is reviewed and revised by your attorney. It is critical that you remain objective and calm as you gather evidence, fill out an incident report and then interview the employee. Do not hesitate to involve the police but do not threaten the employee with prosecution. Keep all interviews with the employee confidential.
Get Expert Advice on Security
To learn more about techniques and equipment to avoid employee theft, consult one of our experts at Aim Lock and Safe. We can help you find effective and affordable solutions.
