Theft is a financial and emotional problem in retail, especially in local small business retail. Too often, it is not discovered until after the event, primarily because of a lack of belief that theft is a problem, particularly theft by employees.
One of the best ways to detect employee theft is to look at your business transactional data.
In our experience at Tower Systems, serving thousands of local small business retailers with our specialty retail POS software, we often find evidence of questionable behaviour indicating theft – behaviour that could have been observed in the business much sooner.
Our professional and based on experience advice to local small business retailers is to use the theft detection and mitigation tools in your POS software. learn about them. Use them. But don’t tell others what you are doing.
Cases of employee theft in local small business retail in which we have been involved have ranged in theft cost from $5,000 to $245,000. In every single instance, using the secret tools we have mentioned here could have detected the theft sooner and reduced the financial an emotional impact on the business and others.
If you have read this far, thank you and well done. Most will not, because theft is not an interesting topic – until they are personally impacted.
Recommended steps any retailer can take to reduce employee theft in retail:
Theft is something to be managed in any retail business. Retailers are stolen from by employees. Good management is about reducing the opportunity for and instances of theft.
- Value employees. Experts say this is the top step to take.
- Share information. Often, theft can be driven by a misconception about the profitability of the business. Sharing accurate business performance data can educate against theft.
- 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 business where this was not done was being skimmed regularly for $200 a day.
- Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
- Check GP by department. If GP is falling outside what you expect, research it further.
- Demand the cash drawer be closed after every sale. A drawer left open is an opportunity.
- Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
- Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
- 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.
- Beware of calculators with memories at the counter. One retail business 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.
- 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. Popular daily items such as tobacco stock discrepancies are an indicator of theft. Had one retailer we work with been doing this they would have caught their $250 a day employee theft months earlier.
- 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.
- Do spot cash balancing using your PO)S software. 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.
- Check your Audit Log in your POS software.
- Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
- Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
- 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.
- 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.
- 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 small business retailers to reduce and manage employee theft.