Employee theft costs retailers tens of billions of dollars each year. Of the $32 billion of “shrinkage” – loss due to shoplifting, employee or vendor theft, and administrative errors – about 40% is due to the dishonesty of employees and vendors.
The National Retail Federation (NRF) undertook a survey of companies in 2014 to determine the scope of the problem of employee theft.
Some of the highlights from the NRF’s 2015 report include:
- The 25 companies surveyed collectively operate 23,250 stores and reported apprehending more than 80,000 employees for theft in 2014, an increase of 1.7% over 2013.
- Shoplifters stole more items, more often, but in terms of dollars employees stole six times as much.
- Half of the responding companies reported an increase in apprehensions of dishonest employees while half reported a decrease. The companies that increased employee theft apprehensions credited a renewed effort toward asset protection and loss prevention.
- Companies responded that they believed the increase in employee theft was due to less supervision, reduced staffing levels, and increase in number of part-time employees, who are generally less loyal to the employer.
Measures to prevent employee theft
Theft can be reduced with proactive security measures. The major theft prevention methods credited by the companies that reduced employee theft are realistic and affordable measures that any size business can adopt.
Our top three take-away tips are:
Don’t cut corners on the background check. Think of the employee background check as your first line of defense – if you hire honest employees then the rest of your job will be a lot easier. According to the NRF survey, companies experienced an increase in internal theft when they chose to cut costs by scaling back their background checks. Choose a complete background check that uncovers criminal matters and verifies education and employment while complying with the Fair Credit Reporting Act.- Enhance supervision. Your inventory and property are safest when they are being watched. A practical and economical choice is a custom-tailored surveillance system. In areas where you want employees or customers to know about the surveillance, visible cameras can provide both a deterrent factor and visual evidence. Remote surveillance allows you to keep an eye on many locations from one place. Hidden cameras can help catch a thief.
- Review and update store policies for management of inventory and cash. Debit and credit cards make up the bulk of consumer purchases but some dishonest employees still find ways to game the process, such as by altering records of returns. By having managers or other responsible people double checking inventory and whether they match up with register receipts, you can zero in on points of weakness.
Improve your bottom line with Maryland Security Professionals
The cost of employee theft is a burden on the companies they steal from and the customers who end up paying more as a result. Maryland Security Professionals offers full service security services to keep your business secure. Call today to find out more about how we can help you.
Additional Resources
- Fortune, U.S. retail workers are No. 1… in employee theft, http://fortune.com/2015/01/26/us-retail-worker-theft/
- Society for Human Resource Management, Employee Theft Costs Retailers Billions, https://www.shrm.org/resourcesandtools/hr-topics/risk-management/pages/employee-theft-costs-retailers-billions.aspx