Why are small business retailers reluctant to act on employee theft in their shops?

Employee theft is the single largest source of loss for small business retailers, yet it is often the most ignored. At Tower Systems, we have seen theft losses reach hundreds of thousands of dollars because the business owner chose not to look. This post explores the psychological barriers that prevent retailers from acting, how our “deep-data” tracking provides irrefutable evidence of fraud, and provides a ready-to-use 12-point Theft Policy to protect your livelihood before it’s too late.

Looking at theft in small business retail, the biggest component of theft loss is from employee theft. We say this based on decades of work helping small business retailers run their businesses. From our small business focussed POS software through to advice we provide in support of this. theft mitigation is an ever present focus for us.

Too often, we are brought into a theft cost discussion when the cost of theft is tens of thousands of dollars and even hundreds of thousands of dollars.

In almost every case of employee theft, evidence was there, curated by our software and available to small business retailers. They actively chose to not look at this. So it beggars the question:

Why are small business retailers reluctant to act on employee theft in their shops?

Based on our experience with many different types of local small retail businesses we think disinterest in timely discovery of theft comes down to a preference for avoiding confrontation. You know the old saying – what you don’t know won’t hurt you. It’s human nature, especially if you are close with employees.

We have seen it time and again. We get a call about a data discrepancy and soon enough we have evidence, from data tracking deep held in secure files not accessible staff – irrefutable evidence of theft. We can track it to day and time and show how they were stealing.  Our software captures this and here’s what matters – owners of retail businesses using our software have access to this, they can catch theft sooner if they want to.

Retail business owners don’t do this and it costs them as a result.

Too often, employee theft is retail is only discovered when the business is suffering financially. This can be, sometimes, the it is too late to save the business.

Another reason some retailers are reluctant to act on theft is because of their arrogance that it is not happening to them. They done;t allow the possibility that theft is an issue.

Retailers using our Tower Systems POS software have access to indicators of theft that enable it to be discovered sooner, evidence that can open a conversation about theft, demonstrating it is a live concern for the business. These things can help reduce the opportunity of theft.

Another way retailers can reduce theft is by having a Theft Policy placed where all staff can see it. Here is what we have shared with our POS software customers:

1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.

2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.

3. We have a zero tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.

4. From time to time we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here you accept this as a condition of employment.

5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.

6. Cash is never to be left unattended outside the cash drawer or a safe within the business.

7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.

8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by local labour laws.

9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.

10. Employees are not permitted to provide a refund to a customer without appropriate management permission.

11. Employees are not permitted to complete sales to themselves, family members or friends.

12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.