If you manage a retail business, employee theft is likely one of your biggest concerns. Businesses lose a significant amount of money to employee theft each year, whether one employee pockets $10,000 or several employees commit smaller thefts. Time theft and misappropriation of company property are also major concerns for retailers, making a comprehensive loss prevention plan a must. Implement these loss prevention strategies to prevent occupational theft and keep your retail business as profitable as possible.
Computerized Inventory Tracking
If you still rely on an outdated point-of-sale system, now is the time to upgrade to a computerized inventory tracking system. This type of system allows you to track retail goods from arrival to final sale, making it easier to identify where theft is occurring. If items disappear between the loading dock and the stockroom, for example, you will be able to focus your investigative efforts on employees in these departments.
If an employee has the authority to sign checks and record financial transactions, it would be very easy for that employee to write a check to herself and cover up the fraud by recording it as a legitimate business transaction. Reduce the likelihood of theft and fraud by implementing access and authorization controls for all employees. Access controls limit the number of people who have access to cash, financial records, and company assets. Authorization controls ensure that every financial transaction is authorized, recorded correctly, and reviewed to ensure it is legitimate.
Team Building Activities
Creating a positive work environment makes it more likely that employees will adhere to your company's policies. Providing comprehensive job descriptions and a detailed employee handbook are a good start, but you also need to devote some resources to team building. One way to help employees get to know each other is by creating a trivia game show with questions related to each team member's hobbies and personal background. Team members will learn more about each other and start to develop the trust needed to maintain a positive work environment.
Loss Prevention Employees
Comprehensive site security services act as a deterrent to would-be thieves, making loss prevention officers or security guards a must-have for your business. These officers monitor surveillance feeds, observe employees, and teach managers how to spot the signs of fraud. Some loss prevention employees wear uniforms, while others work undercover to make it easier to catch employees in the act of stealing.
Thorough Background Checks
Just because an applicant checks the box next to "I have never been convicted of a crime" doesn't mean it's true. Your standard background check should include criminal convictions as well as civil actions related to fraud, especially if the new hire will have access to cash or valuable assets. If an applicant says he quit his last job, contact his former employer to verify the story. Some employers will not reveal anything beyond a former employee's dates of service, but it doesn't hurt to ask.
Asking for Help
As a manager, you probably spend a lot of time assisting customers and running sales reports. Although these activities are important, they take you away from the sales floor, making it difficult to spot suspicious behavior. Don't be afraid to ask cashiers, sales associates, and other employees to come to you if they see someone pocketing money or concealing merchandise. Asking employees for assistance gives you more eyes watching for unusual behavior, making it a little easier to catch perpetrators in the act.
If you always announce cash audits ahead of time, dishonest employees will have plenty of time to conceal their activities by falsifying reports or returning stolen money to their cash drawers. Conducting random audits eliminates many opportunities for concealment, making it easier to identify fraud. If you conduct random audits, do them at different times of day and on different days of the week so employees are unable to anticipate when they will occur. Employees may be less likely to steal if they know there is a good chance they will get caught by an unexpected audit.
In the United States, retailers lost nearly $35 billion to shoplifting, internal theft, vendor fraud, and administrative errors in 2011, reports Lauren Covello of Fox Business. Unfortunately, 44 percent of the staggering losses were attributed to employee theft. If you are unable to screen out dishonest employees by conducting thorough background checks, hiring security guards, implementing auditing procedures and internal controls, and creating a positive work environment will help you curb theft in your organization. Read more about security services and what you can do to prevent loss in your business.