How Do Businesses Prevent Theft?
May 21, 2018
Theft, unfortunately, can take a wide variety of forms. Theft in a retail business might include the loss of physical property from shoplifting; it also can come in the form of embezzlement.
In the retail sector, the 2017 National Retail Security Survey reported the average cost per shoplifting incident is $798 and of those incidents, approximately 36.5 percent were attributed to external shoplifters and 30 percent to employee theft.
According to the 2017 Hiscox Embezzlement Study, the median loss to a business from embezzlement is $319,350 and 55 percent of cases of embezzlement occurred at companies with fewer than 100 employees. The types of businesses most frequently affected by embezzlement theft include financial services, municipalities and government, manufacturing and real estate.
The statistics are telling: if you’re running a business, theft is a real threat. What can you do to protect yourself?
Weed out the bad apples
Careful screening of your employees is your first line of defense in preventing theft at your business. Through a process of multiple interviews and carefully chosen honesty questions, employers need to evaluate the integrity of the person whom they are hiring to represent their business, not only to provide quality customer support, but to prevent theft.
Criminal conviction and drug screening, past employment history, personal reference checks, education verification, driving history and credit checks are all options to screen potential new employees.
What are some of the warning signs that an employee might become a potential thief? According to the Hiscox study, here are some common characteristics to look out for:
- Intelligent and curious – embezzlers pick up on things quickly and are eager to know how everything in the office works. Once they learn the processes, they can manipulate them for their own gain.
- Extravagant – embezzlers may flaunt their wealth, so watch out for employees who are living a lifestyle out of proportion to their salary.
- Egotistical – embezzlers often are rule breakers both in and out of their work life, from speeding tickets to overusing sick time.
- Disgruntled – an employee who feels they are being treated unfairly may be tempted to steal to even the score.
Carefully supervise your team
Instituting a system of checks and balances in your business is extremely important and limiting employee alone-time is first and foremost in that plan. Both employee theft and shoplifting often happens when one employee is alone at the store or register. Make sure your cash register is always attended to and keep interaction with vendors in open areas. Keep stock rooms and back storage rooms organized and neat. This will help to keep an eye on your products and inventory and make it easy to see if anything has been moved or taken.
Use purchase orders in your business and make sure the payment, receipt and preparation of purchase orders are handled by different individuals. Also, make sure balancing of sales slips and register receipts is done by someone other than the sales clerk. Make sure all bank statements and cancelled checks are reviewed by more than one person and have corporate bank statements delivered to the business owner, preferably to a home address.
Finally, make unannounced audits in the workplace and consider having an outside firm conduct an official yearly audit.
Loss prevention awareness and training programs are important for everyone on your staff. Topics you should consider conducting recurring training on include: managing disgruntled customers, handling and counting money and making sure the register area and locations where expensive merchandise is on display are constantly monitored.
Consider inviting local law enforcement to your business to teach employees what actions may signal shoplifting is occurring and what to do in the event of a robbery.
Also, set up an employee tip line so employees can confidentially report suspicious behavior and reward staff who provide information that prevents theft.
Monitor your business
While it may sound big-brotherish, keeping a close watch on your employees and customers, and installing the proper security and surveillance methods, is critical.
Install computer security measures to prevent diverting of money or inventory. Restrict access to computer terminals and limit access to online files based on an employee’s need to know. Properly dispose of sensitive data by shredding documents containing confidential information and removing data from electronic devices before disposing of them.
Keep your software and operating systems up to date, encrypt data and install and use antivirus protection on all your machines. Use strong password protections and periodically change entry codes.
Finally, invest in loss prevention systems. The top systems in use in the retail sector include burglar alarms, digital video recorders, armored car deposit pick-ups, live closed captioning TV monitoring, secured fixture displays, magnetic tagging of merchandise and employing door greeters and receipt checkers.
At FSS Technologies, our security team is trained on the latest technology and will take the time to walk you through each step of the process and provide you with a custom security system that fits your business and your budget.