Shoplifters are a menace, but a bigger one may be working in your store. The stats on employee theft are alarming. It’s estimated that close to one third of U.S. employees steal from their place of business, resulting in billions of dollars in losses to their employers. In fact, according to the FBI, employee theft is one of the fastest-growing crimes in the country.
Stopping employee theft is difficult, but setting clear policies and procedures can help safeguard both your money and your merchandise.
An effective policy should address the most common forms of employee theft:
- Pilfering inventory
- Stealing cash
- Taking home supplies
- Skimming from vendor deliveries
- Engaging in shipping and billing scams
- Forging or hiding receipts
- Faking an injury and claiming compensation
- Putting fictitious employees on the payroll
There are four keys to preventing employee theft:
- Hire carefully. There are several services available that will run background checks on potential hires. Use these services, but also check references and talk to previous employers. Don’t underestimate your gut feelings. Look for sincerity, good values, and communication style. Ask questions that discern character, such as, “What would you do if you found out that another employee was stealing?”
- Leave no task to the discretion of only one person. No one besides you should have sole responsibility for anything. Double-check bookkeeping and other key financial processes, and designate more than one person to such tasks. Rotating responsibilities is also a good idea, so that no one can have too much control. This includes the smaller jobs. Someone who opens the mail has first access to checks and sensitive documents as they arrive.
- Make sure employees understand the rules. Make sure there is a set way for doing everything. While you don’t want to become a control freak or a micromanager, it’s important to provide clear guidelines for handling merchandise and receipts. You should also give all new hires the store’s policy (in writing) on how the company handles employee theft, which can result in penalties ranging from firing to pressing charges.
- Be mindful and watchful. While nobody wants to be working for “Big Brother,” you can’t afford to be too relaxed about monitoring operations. Manage by walking around. Do spot inspections of a shipment, check the register once in a while, look over your bookkeeper’s shoulder for a minute or two. Make sure records are well organized and kept up-to-date, so that you can step in at anytime and review the process. Let everyone see that, while you’re not hovering, you are still around and aware. When you can’t be there, a few well-placed surveillance cameras can be a cost-effective way to keep employees honest.
For specific tips on thwarting sticky-fingered workers, read Eight Tips to Prevent Employee Theft and Fraud.