Thwart Employee Theft

03/05/07

With the holiday season upon us, many retailers are adding temporary staff to help ring up all the sales.

Careful. Unless you do a thorough job screening these—or any—retail employees, you may be opening your doors to both petty thieves and well-organized gangs.

Employee theft is a much bigger problem than shoplifting. According to the National Retail Security Survey, employees stole $13.2 billion worth of goods last year, while shoplifters pilfered items valued at $9.7 billion. And while the average shoplifter takes items worth $128, the average dishonest employee walks off with goods worth $1,023.

Watch Out for ‘Sliders’
Gary Cornick, president of background-checking firm. PeopleWise (www.peoplewise .com) points to one of the biggest problem retailers’ face: Sliding. That’s slang for when cashiers let friends walk out of the store without paying for merchandise.

Employees steal in other ways, too, of course. And why not? As Cornick points out, “Employees have time to plan out a theft. They are there all the time. They know the layout of the store, and when they have access to the goods.

Don’t Relax Your Standards
“The biggest mistake employers make,” says Cornick, “is that they don’t apply the same hiring criteria to seasonal help as they normally would.” The result: Turnover—and theft. To prevent it:

1. Scrutinize job applications and interview applicants thoroughly to make sure they fit the job and have the skills you need. Watch for inconsistencies in what they write and what they say. In some cases, you might want to test applicants to ensure they have the skills to succeed on the job.

2. Perform a background check. Says Cornick, “Screen to make sure you’re not bringing in someone with a history of stealing.” At the very least, do an identity check. “People sometimes come in under false pretences—gangs especially like to work this way. They send people in with phony ID cards.” An identity check will often uncover such a ruse. You should also do a criminal background check, which will put a spotlight on the 10 percent or so of the applicants who have stolen or been violent on jobs in the past.

3. Let people know your expectations. Make your anti-theft policy part of the employee orientation. Let people know it’s a big concern of yours, and that you’ll be watching closely. Make sure people know you’ll investigate thefts and prosecute if necessary.

4. Monitor operations. Put cameras on cash registers and watch sales carefully. “Look for big fluctuations in receipts from day to day or from employee to employee,” says Cornick. That could be a tip-off that you have a problem.

5. Pay attention. As Yogi Berra said, “You can see a lot just by observing.” Look for employees who seem to have a lot of extra cash. Some may even be brash enough to brag about thefts in the break room. You’ll scare off many would-be thieves if people know you’re keeping a close eye on the situation. Also, you might have a policy that requires employees to report, confidentially, all misconduct.

6. Be a good employer. Don’t forget the time-honored components of motivating employees: Pay well, show respect and flexibility, and offer skill-building opportunities. Do those things and you’ll build a loyal, dedicated workforce that wouldn’t dream of stealing from you.