Sunday retail management advice: how to cut employee theft in retail

Theft is something to be managed in your business. You will be stolen from. Good management is about reducing the opportunity for and instances of theft.

Follow this advice and the opportunity for theft will be lower and the certainty of detecting it higher.

Unfortunately, many retailers read up to here and think this will to happen to them.  Too many of these business owners are the ones who do experience the hurt of employee theft.

If you are still reading, well done. Here are simple steps you can take to catch and manage employee theft:

  1. Use stock control for a high volume high interest category (if not all stock). Enter new stock as it comes in, scan all sales and only reorder based on what you software says. Every month do a stock take. Stock discrepancies of the right item are an indicator of theft. Had one retailer we know of been doing this they would have caught their $250 a day employee theft months earlier.
  2. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  3. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One retail business where this was not done was being skimmed regularly for $200 a day.
  4. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  5. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  6. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  7. Check GP by department. If GP is falling outside what you expect, research it further.
  8. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it. See the last page of this advice.
  9. Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
  10. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  11. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  12. Beware of calculators with memories at the counter. One employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  13. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  14. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  15. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  16. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping newsagents to reduce and manage employee theft.

Theft, employee and customer, costs a typical retail between 3% and 5% of sales revenue. Management attention can cut this dramatically. It does not take much time. No, it is more about having professional processes in place which everyone in the business follows.

Leave a Reply

Your email address will not be published. Required fields are marked *

Reload Image