I’ve put together some tips for cutting employee theft in a retail business. These tips are based on several years helping clients address the problem when it has been discovered by our software. My sense is that employee theft costs many small businesses upward of 60% of all theft in the business. Yet, employee theft is the easiest theft to manage. I had to take a hit in one retail business I owned before I realised how much I was helping people steal. It was a $22,000 lesson and well worth it.
Here are my suggestions for reducing / managing employee theft:
1. Background check every new hire. Get their permission and use an agency to check with the police and other sources. Make sure you know the person you’re hiring! Often just asking their permission to submit to a background check will turn away those you don’t want.
2. Pay above award wages. The quality of your employees is up to you. If you’re doing your job you have good employees. Value them. Pay above award – by up to 10%. This will reduce theft.
3. Engage and show respect. Ask for their honest comments about the business. The more they feel, genuinely feel, valued, the less likely they are to steal from you.
4. No employee bags at the counter.
5. Tight refund policy. Theft is less in business with tight and enforced policies.
6. Offer fair discounts to employees. Let employees buy products for a fair discount and demonstrate respect for their involvement.
7. Don’t take cash out yourself. If employees see you take money out for questionable items like a coffee or your lunch they will feel invited to do the same.
8. Roster mix up. Change your roster regularly. It is common that a roster change will show you a theft problem you never thought was there.
9. Tight internal systems. Setup good systems with little room for error. Demonstrate through your actions that employees will be caught if they steal from you. Experts advise that people likely to steal choose employers who they assess to be soft targets.
10. Roster rules. Don’t have friends working with friends if they are the only ones rostered on.
11. Speed humps. Have a day where you turn on receipts for ALL customers. Then a day where you require that everything is scanned (as opposed to using hot keys and the like). These changes will keep employees and customers off guard and make it easier for you to spot problems. It will also keep you on your guard and that’s good for the business.
12. Spend more time up front. The further you are from the action in your business the greater the opportunity for you to be ripped off. Spend time where the action is – unexpectedly.
13. Balance the register during the day. Do this every so often. Again to keep people on their toes. It is also good practice.
14. Don’t let employees ring their own purchases up.
15. Don’t let employees sell to family and friends.
16. Your local council. Many local councils offer theft prevention training and help as do some local police. (Local U.S. police stations are considerably more active in this area.)
17. Beware of popularity. There is anecdotal evidence that the more popular the employee the more likely they are the one stealing from you.
18. Tell employees you suspect you have a theft problem. This might uncover comments. It might also scare them to stop.
19. Install a camera system and use it. Too often retailers have the technology and don’t use it.
To do nothing is to invite trouble. These suggestions are easy and most involve no or only a low cost.