Putting a Stop to Internal Theft
Nowadays, threats to business abound, with vulnerabilities ranging from shoplifting to cyberattacks. But not all threats are external, and security needs to start “closer to home.” Internal employee theft examples include everything from skimming funds to taking inventory. And employee theft statistics have proven it to be a much larger problem than external theft. As a result, business owners need to be intentional about preventing things from happening right under their noses.
Strategic Ways to Prevent Internal Theft
Smart businesses recognize the need for a multi-pronged approach to loss prevention, complete with internal controls to prevent internal theft. Here are several for consideration. As with most security plans, more efforts are better.
Recruitment and Hiring
Perform background checks on all employees and potential employees. This simple proactive effort can save you lots of trouble later. Adding this step as a standard component of your hiring process doesn’t single anyone out.
Get to know your employees personally during the interview and beyond. It’s always a good idea to know employees as people, not just staff members. That way, you build mutual respect and appreciation. (Obviously, avoid asking about marital status, pregnancy, sexual orientation, and other protected statuses.)
Offer a livable wage and pay people for every minute of their time, including overtime. Research shows that higher wages reduce internal thefts. If employees feel respected and adequately compensated, they are less apt to supplement their income by stealing.
Hands-on supervisors and managers are good for business in many ways. They keep everything running smoothly and engage with employees. In addition, your management staff will notice irregular behavior that might indicate trouble is afoot.
Establish procedures for handling cash, inventory, equipment, and supplies. And make sure that both the procedures (and the repercussions for not following them) are clear to all employees. This process is advisable in all industries, but defining retail internal employee theft consequences is of particular importance. Retail businesses have more opportunities for employees to enact schemes involving refunds or discounts, for example.
Create policies that address employee theft and share those during the onboarding and training process. You may consider having an attorney draft an anti-theft policy that makes it clear you have a no-tolerance mindset that may include termination, filing a police report, or even legal action.
Handling Employee Theft Incidents
Provide ways for employees to report suspicious activity anonymously. They can watch each other and “do the right thing” if they suspect something without fear of repercussion. This is a useful retail store internal theft prevention method. It can also be invaluable for detecting fraud and other white-collar crimes.
And when investigating workplace theft, assure employees the investigation is completely confidential and private. This is very important for establishing trust with potential whistleblowers.
Don’t just punish unacceptable employee behavior. Reward good behavior, too. You might offer a financial incentive if an employee’s accuracy is consistent, for example.
Limit access to systems and areas if they aren’t necessary for an employee’s job. If someone doesn’t need certain software or files, like financial records or payroll tools, restrict these. And be mindful of changing passwords regularly, as these are sometimes intentionally or inadvertently shared.
Establish checks and balances in everyday actions. While empowering and trusting employees is important, it’s also wise to have another department or employee review accounts. That way, a second set of eyes confirms nothing suspicious (or accidentally incorrect) is going on. For example:
- Internal retail theft prevention could involve random cash drawer counts during the day.
- Different employees should handle payments, receipts, and the preparation of purchase orders.
- In accounts receivable, make mail-opening and posting separate functions.
- Use pre-numbered purchase orders.
Track inventory in the stockroom, warehouse, etc. with a regular monthly check. Perform random checks as well. And make employees aware of those checks. A visual scan can reveal potential problems, like empty shipping containers or missing items.
Similarly, perform regular audits by reviewing financial records to confirm there isn’t missing money or incorrect data. It’s typical to audit accounts once a year. But there’s no reason you can’t do periodic, unannounced audits as well.
Devices and Systems
Technology can play a role in preventing internal theft, too.
Surveillance is not only for watching customers. Business security cameras, strategically placed around the workplace, deter both customer and employee theft. Monitor key areas like warehouses, cash registers, and any place with valuable items. A business surveillance system from Deep Sentinel is ideal for after-hours monitoring. This solution combines the most advanced AI technology and the power of live security guards, ready to address any threats and keep your business safe.
In addition, an inventory management system on your point of sale system is a logical way to track inventory. With the right POS, you can automatically create daily sales reports and monitor cashiers, since employees each have a unique, identifiable account. If a certain employee account has a high number of refunds or voids, for example, you know who to investigate.
Forget Internal Theft Woes
While you may not be able to stop all instances of internal theft, you can certainly make it less likely. By providing your staff with a positive, well-run work environment and establishing procedures to handle issues, you can keep your inventory and your business safe.