Stop Employee Theft

Internal theft counts for one-third of inventory shrinkage. Here’s how to cut your losses.

Written by Allan Britnell

Though it’s a hard fact to swallow, statistics show there’s a good chance your staffers are stealing from you. The Retail Council of Canada estimates that in the year 2000, internal theft accounted for one-third of “inventory shrinkage” in this country. That works out to nearly $1 billion among retailers alone — and companies in all sectors are at risk.

How can you cut your losses? Sgt. Rob Radbourn of the Toronto Police Services and Ursula Lebana, owner of Spy Tech, a retail store specializing in anti-theft gadgets and equipment, share some tips.

Checks and balances. The first step in preventing employee theft is careful screening of the people you hire. Contact at least two or three recent employers for each candidate, suggests Radbourn. He also recommends a criminal records check.

Policy paper. It’s important to have a defined policy on internal theft and make each individual (and their union, if applicable) aware of what the policy is and what it means. “Ensure that the consequences — be it dismissal, suspension, whatever — are clear,” says Radbourn.

Who has the floor? Limiting access to sensitive areas is one way to reduce the temptation or opportunity for theft. With a retail operation, employee lockers and change rooms should not be located near stockrooms. For large offices, you should consider limiting employee access to sensitive areas by installing a security pass card system.

Smile — you’re on Candid Camera. Monitor cash registers with a hidden camera. Pinhole cameras hidden in smoke detectors, radios or even the perforations in ceiling tiles are inexpensive watchmen, starting around $100 each. An office- or warehouse-sized system with multiple remotely monitored cameras would cost about $3,000, says Lebana. Legalities vary, but in general, hidden cameras are allowed if there is no sound recording and they are not installed in private areas like change rooms.

Oversight committee. Worried that someone on your sales staff is making deals on the side? Install monitoring software on your computer network. “It records everything that’s being written or viewed on the screen,” says Lebana. “It’s like having a VCR on the computer.”

© 2003 Allan Britnell

Originally appeared on PROFITguide.com