Preventing Loss and Theft in the Workplace

Crime and employee theft are a serious problems for retailers. The U.S. Chamber of Commerce estimates that approximately one-third of all businesses fail due to crime and theft in the workplace. What can a retailer to do avoid becoming a number? Implement prevention.

Prevention is an employer’s best defense against fraud and theft, but it is not always so easy. It takes time and planning to develop a “theft-free” workplace. Use the tips below to help simplify the process.

Employees and New Hires

Most retailers need employees in order to operate a successful business. When interviewing and selecting candidates, look for the smartest and most honest applicants you can find – it will pay off in the long run. Here are things to consider when handling and recruiting your workforce:

Hiring. Carefully interview applicants during the interview process. Ideally, you want to hire honest employees who will not commit theft in the first place, but there are never any guarantees. Conduct an interview that exposes an applicant’s moral background and level of honesty. Ask scenario-based questions such as “what would you do if you caught a co-worker stealing?” The more thorough your interviewing process with new applicants, the more likely you will be able to weed out problematic applicants.

Perform background checks. Although there is a cost, background checks usually pay for themselves. You will especially want to perform background checks when an employee will be handling money, cash, and credit cards. Check for items such as: past employment, education, and certification verifications, reference checks, drug testing, and civil or criminal convictions.

Employee treatment. Hire the best employees you can find and treat them well. Most employees need to feel that their time and work efforts are valued. They also need to feel that their job is secure. It should go without saying that unhappy employees are more likely to commit thefts than happy employees.

Work environment. Employees may be less likely to commit theft if they are in a positive working environment. Establish and enforce policies, procedures, job descriptions, an open-door policy, and a culture of compliance. Keep in mind that positive behaviors should come from the top -- all managers and supervisors should abide by and emulate the behaviors they would like to see in the workplace.

Preventative Measures

Unfortunately, there are no guarantees that you will always hire the best employee. For this reason, it is wise to implement additional measures to further combat against crime and fraud. To help avoid employee and customer thefts, consider the following:

Understand theft methods. Employees (and customers) can be very creative when it comes to stealing. As an employer, you should understand how thefts occurs in the first place. Arm yourself with the knowledge so you understand the “tricks of the trade.” Some of the most common methods of theft include larceny, skimming, or fraudulent disbursements. If you are aware of how theft occurs, you are better prepared to keep a watchful eye over your business.

Implement checks and balances. Implement internal checks and balances to help prevent internal thefts. For example, this can be done by making sure employee duties are separated – no one employee should be responsible for both the cash handling and recording of the same transaction.

Another idea is to have slight overlaps in responsibilities. This would come in handy especially in the inventory and warehousing arena. For example, if you have two employees counting inventory of a new shipment at different times, the figures should reconcile with each other. Although duplication of efforts may require slightly more time and pay to your employees, it is worth the extra cost if theft is prevented.

Reporting system. Establish a reporting system so employees and customers can report fraudulent behavior. For example, offer a hotline. Note that if the reporting system is anonymous, employees and customers may feel more comfortable reporting fraudulent behaviors. Also consider rewarding employees that come forward and report thefts.

Perform audits. Employers should perform both regular and unannounced audits. If dishonest employees are committing theft, chances are they will cease their criminal activities in the event of an audit. However, if an audit is unknown, this will help shed light on new vulnerabilities and liabilities in the workplace. Perform audits, especially unannounced audits, on a periodic basis.

Surveillance. Depending on the nature of a business, it may make sense to implement surveillance methods, such as cameras or security guards. Surveillance methods can especially help combat against shoplifting. If a shoplifter notices a security camera or guard, he or she will likely more onto an easier target.

Conclusion

Crime and fraud does not have to be a daily reality for retail business owners. There are ways and means for preventing theft in the workplace. In the event a theft has occurred, do not waste any time – address the matter immediately. Conduct an investigation, determine the extent of the theft and who was responsible, and try to recover the stolen property or funds. Thoroughly analyze each fraudulent situation that occurs, and determine what needs to be done to prevent it from happening again.

This article is designed to offer an informative overview of how to prevent loss and theft in the workplace. For more precise advice on individual circumstances, seek the appropriate legal counsel.

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