Employee Theft: It's Real, It Happens, and You CAN Prevent It!
Nobody wants to think about the possibility that employees might steal money or merchandise. Most small retail store employees are like family. Despite statistics that say employee theft exists in nearly every retail store, when I think of my own employees, there’s simply no way I can imagine one of them stealing. Yet, according to a 2011 study called the Global Retail Theft Barometer, employee theft accounted for more than 44 percent of total shrink (losses from shoplifting, administrative errors, and other causes) in North America—surpassing even shoplifting. So, as store owners, what do we do?
First, we can stop burying our heads in the sand, hoping the issue will disappear. We can be proactive about preventing employee theft, even if we believe it’s not happening at our establishment. The idea is to avoid setting up situations that make it easy or tempting to steal, in case someone toys with the idea of being dishonest. The following simple practices make good retail sense and reduce opportunities for employees to make poor (and costly) decisions.
Work in pairs
Have two people open and close the store every day. Do not have any employee spend a lot of time alone in your store, no matter how much you appreciate the extra work, until you are certain you can trust them.
Cash management rules
Set clear rules about cash management in your store, such as who is allowed to access cash from the backup change bag, how cash is handled at the end of the night, where the deposits are kept, who can “skim” excess bills on a busy day, and so on.
Manage employee sales
Do not allow employees to ring up their own sales or handle their own refunds. Have a manager sign off on all employee transactions.
What’s good for the goose
Set a good example. If employees know or suspect that someone in management is dipping into petty cash or taking home merchandise, they may take it as a green light to do the same.
Customer refund policy
Have a manager OK every refund in front of the customer. Track voids and refunds nightly to ensure they are legitimate.
First published in Vol. 26 No. 5 of Retailing Insight. © 2012 Continuity Publishing Inc. All rights reserved.