Theft in the workplace is a major problem. According to the Global Retail Theft Barometer employee theft costs American businesses even more than theft by non-employees. Employee theft made up 43% of all lost inventory in 2015. That’s an annual cost of roughly $18 billion. It’s $2.3 billion more than the cost of theft by customers. Most of the theft that occurs isn’t an employee taking items and walking out of the store with them.
“Usually it happens during checkout, when an associate manipulates a transaction to benefit themselves or someone else,” Ernie Deyle, a 30-year veteran of the retail loss-prevention wars who leads the business consulting practice at London-based data analytics firm Sysrepublic told Fortune.com. Employees might, for instance, enter refunds, discounts, or voided transactions into a cash register or “cancel transactions, modify prices, or say someone used a coupon when they didn’t.”
The interesting question, of course, is not so much how as why. “Key reasons … include ineffective pre-employment screening, less employee supervision, and easy sale of stolen merchandise,” the report says.
Deyle sees cultural differences at work too. “Internationally, there’s more of an unwritten code that says it’s not honorable to do something dishonest toward an employer,” he says. “Here, it’s a different mindset. There’s so much turnover in retailing, and very little loyalty.”
So what can businesses do to combat employee theft and protect their investments? For starters they can invest in a stronger background check system. The reports says one of the key reasons theft happens is due to “ineffective pre-employment screening.” Everyone’s trying to cut costs and increase their dividends, but a lack of investment in screening employees thoroughly can end up costing your business more down the line.
One of the best ways to prevent losing inventory to employee theft is to get your employees involved in the prevention process. Very few people want to be the one to tell the boss about a coworker’s theft. It’s not that they think stealing is ok or don’t care, but who wants to potentially ruin relationships with people you have to work with every day?
Tip lines in 2016 mean more than just 1-800 telephone numbers. Setting up an email address dedicated to tips allows employees to anonymously report a coworker’s stealing. Everybody text messages nowadays and creating a text message tip line is perfect for younger employees. Tip lines are a great way to empower your employees to report cases of theft without exposing themselves to retaliation from coworkers or the people they report.
Another cause for employee theft is a lack of consistent oversight. Employees don’t want someone constantly standing over their shoulder, but thinking someone is watching them will decrease the rate of employee theft at any business. Cameras are a good option to create the presence of supervision and keep employees mindful of their actions.
Private investigators can help with every aspect of this and more. Recommending and installing cameras in places most likely to disrupt theft is too easy for a good P.I.. They can also operate the tip lines to make sure every tip is investigated and your employee’s anonymity is protected. Investigators are perfect for higher quality background checks too. Don’t wait until it’s too late. Protect your assets today.
For Private Investigation Inquiry contact Thomas Lauth, Lauth Investigations 317-951-1100