Thieves at Work

Prevent employees from stealing from your retail business.

It’s Thursday afternoon. You’ve been trying for days to reconcile your inventory with your written records. To take a break from looking at numbers, you start to straighten up the back room. What’s this? A pile of highvalue goods is definitely out of place and concealed in the far corner. It’s only a few steps to the rear exit. So that’s what’s been happening to your inventory!

Employee theft causes one out of every three business failures in this country today, according to investigative firm Michael G. Kessler & Associates.* To help you protect your retail business, Benefit Resourcing (which provides an insurance benefit program for VDTA/SDTA members) has compiled some tips on how you can control this kind of loss. Review our checklist on the back for ideas about curbing employee theft.

Hire and Train Well
Your first line of defense against employee theft is to hire honest employees. This means taking the time to check references thoroughly, including verifying dates of prior employment, and screening for past shoplifting arrests or other criminal activity.†

Train new recruits thoroughly, both in job procedures and in your expectations about the level of integrity you expect from them. Let them know they are accountable for their actions. Set realistic rules and enforce them daily. Selective enforcement encourages dishonesty.

Be an “Employer of Choice”
Employees who feel they are underpaid or treated unfairly may feel justified in being dishonest or in failing to report other employees’ dishonest acts. Give your employees the tools to be honest. Make sure they know how to respond when friends ask them to steal or ask for “discounts.” Let them know they are trusted and you are counting on them to be fair and honest, just as you are with them.

Establish Zero Tolerance
Every preventive action you take reinforces the impression that stealing from your business is a bad idea. Be highly visible on the sales floor, and appear in unexpected places at unpredictable times. And if you catch a thief, prosecute. Statistics show that many employees will steal if they see that others do it without consequence.

The more you make it clear that you are intending to protect your business, the less likely you’ll experience employee theft. In turn, you will see your bottom line improve. Zero tolerance for employee theft is good for your business, and good for the retail industry overall. Is your business protected?

Tips For Eliminating Employee Dishonesty

Create Roadblocks to Theft

• Establish one door as the official employee entrance and exit.
• Look for unlocked or disabled security doors.
• It takes only seconds for a thief to hand merchandise to an accomplice when no one is looking.
• Monitor trash disposal. Check dumpsters for concealed merchandise.
• Look for pre-bagged merchandise and employee lunch boxes or purses under counters.
• Require at least two employees to be present at opening and closing.
• Display signs throughout your store, including employee areas and storage areas, stating shoplifters will be prosecuted.
• Replace the locks whenever any employee leaves your employment.

Keep Track of Your Inventory

• Conduct annual inventories, preferably using outside help.
• Conduct unscheduled, periodic inventories, especially of high-value items or items frequently targeted by thieves.

Watch Cash Register Transactions

• Require supervisor approval of returns. The employee who made the sale should not be the same one to process the return of that merchandise.
• Appoint a small number of specific individuals to be responsible for ringing up sales for other employees and their friends or relatives. Employees should not ring up their own sales, or sales of their friends or relatives.
• Require the cash drawer to be closed after every sale.
• Make sure over-ring slips are not covering up for shortages.

Monitor Shipping and Receiving

• Take note if more goods are delivered than appear on the shipping order. It could be a deliberate excess order for diversion to personal use or sale.
• Require padlocks to be snapped shut on hasps when not in use to prevent switching of locks.
• Take steps to combat employee-vendor or employee-driver collusion.
• Require a supervisor to be present whenever goods are received or shipped.
• Separate the ordering and receiving functions, and be sure different employees perform them.
• Watch your invoices. Spot check to verify that all merchandise you ordered was actually received.

Invest in Electronic Assistance

• Install video surveillance of cash register transactions and storage, shipping and receiving areas.
• Install motion-detecting alarms. These will deter dishonest employees from remaining after closing and “breaking out” with the goods after hours.

Visit www.benefitresourcing.net for more tips on how to protect your business. This is just one more example of the value you receive from purchasing insurance through Benefit Resourcing. For more information, call Michael George C.I.C. of Benefit Resourcing at 1-317-328-4518.

†Note that such verification and screening may require applicants’ authorization. See federal and state laws or regulations.

The information set forth in this document is of a general nature and provided for informational purposes only. The content of this document may omit certain details and cannot be regarded as advice that would be applicable to all conditions, situations or businesses. In addition, the information presented is not a substitute for a thorough loss control survey of your business operations. Readers seeking resolution of specific safety issues or business concerns regarding this topic should consult their professional safety consultant. Benefit Resourcing does not warrant that the implementation of any view or recommendation contained herein will result in the elimination of any unsafe conditions at your business locations or with respect to your business operations. Further, Benefit Resourcing does not warrant that the implementation of any such view or recommendation will result in compliance with the healthy, fire or safety standards or codes of any local, state or federal ordinance, regulation, statute or law.

Reprinted from Floor Care Professional, January 2008