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Close The Window of Opportunity

Close The Window Of Opportunity: How to Deter Employee Theft

Most theft in retail comes from internal sources. Almost half of all reported fraud is internal. The second most frequent form of reported fraud is shoplifting or external theft, and administrative error accounts for the smallest amount of loss to retail organizations.

You can put precautions in place that will allow your employees to know that you are paying attention. Closing the window of opportunity means taking a realistic look at what is going on within your organization. Knowing your employees is one of the most important things that you can do. Notice if they are doing a diligent job and acknowledge them. It is very important that employees have a sense that what they are doing is worthwhile that they feel invested in your company and your success. This will stop most people with a propensity to steal from continuing or never even starting.

Most people will steal the element of time from you first, elongating breaks, coming in late, leaving early. Once they see no one is giving them any consequences, the opportunity is there to move onto your products, your supplies or other valuable company assets.

In my experience, I have seen three types of employees in regards to theft. People who are completely honest and would never steal from you are a small part of the population. Another small minority of people are out to take a job specifically to steal time, money, merchandise and any other asset your company may have to offer. The largest part of the population would normally not steal. However, if morale is bad, recognition for their work non-existent, and the windows of opportunity are wide open, they will steal from you and are stealing from you.

Depending on your type of business, answering these questions may help you to assess whether or not your business is at risk for employee theft:

Who carries keys and has access to your building?Is the list of key carriers up to date? Have locks been changed and/or keys collected after last management change?Who takes out the garbage and when?Who is signing for your bank deposits? Are two people verifying cash and checks?Are two people going to the bank together to eliminate the opportunity to steal money? Do you vary routines and personnel?How is your inventory handled by your supervisors?Do employees carry large bags that seem unnecessary?Do employees have the opportunity to wear products or place products in an area for later pick up?Do you have a manager that is responsible for ensuring policies and procedures are put in place and followed?Who is checking up on the manager?

There are a few ways to help control employee theft. Many retailers recommend having a hotline to report suspected employee or internal theft. Retailers can also encourage employees to report suspicious behavior to managers and supervisors. Bringing in upper-level supervisors on an occasional basis to review policies and procedures will help your company be able to maintain assets. If you have a board of directors or a financial review committee, they should ensure that deposits are being made and accounted for to the financial statements, as well as conducting a fiscal review of assets.

Many small businesses want to trust employees and do not have these policies in place. By implementing of policies and procedures, these things become a matter of policy rather than trust—and everyone benefits.

Michele Baehr is a 30-year veteran retail multi-store manager with training on interview and interrogation techniques for internal theft.

For questions on this subject, please contact Johanna Bush at

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