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The Surprising Truth About Shoplifting…Part 2

Moving from external theft to internal theft.

 Last week we talk about potential customers entering your store and stealing product—and the surprising insight that most shoplifters are adults and many are actually buying items at the same time as stealing them. In that blog, you’ll find some solid strategies for reducing shoplifting as well as a tease for this blog focusing on employee theft.

Now you might be thinking that you only have a few employees who you trust or that you are around most of the time so this blog does not apply to you. And, by all means, we hope that is the case. However, adding an extra layer of vigilance make all the difference. The reason we suggest you consider this is that, according to Forbes, employee theft of merchandise costs over $18 Billion dollars a year. And that doesn’t account for other types of theft such as skimming, embezzlement or stolen time all total employees who participate in these types of theft make up 75% of the workforce.

So what do to?

First, recommended over and over again by the experts: run background checks on employees, especially anyone who will be managing the books. Once you are sure you’re not hiring anyone with a criminal background, move on to making policies and procedures to keep them on the right path.

That includes instituting a zero-tolerance policy and be clear on what that means to employees. Jon Davis of Davis Oil, who owns a chain of Convenience Stores, told us that “over the years we’ve seen theft from our most trusted staff including someone who’d been with the company over 30 years”. He went on to say that “once someone steals they are more likely to do so again” meaning offering second chances often leads to more lost revenue.

Once you’ve got your policy in place keep a general eye on their employees. According to The Balance, employees who’ve had a major life change or who are living beyond their means are more likely to steal. Also, employees may be motivated by greed, addiction or even revenge. An open dialogue with your employees will help you identify these motivations and even bring them to a stop before they get an employee in trouble.

Do you think someone is stealing?

If you catch an employee taking merchandise, switching price tags or letting a friend remove items from the store without paying, those are all places you may want to consider enacting your zero-tolerance policy; especially if you live in a Right To Work state.

However, depending on the situation, consider fully documenting the situation before you make a move to fire the person. This will allow you to better make a case in court if that becomes necessary. This would be if you have an employee who you think is embezzling (cooking the books) or skimming (taking money without reporting it). BFS Capital has a good guide with a step by step process you can follow if you’re in this situation.

As easy as it is to be upset by shoplifting, employee theft often hits closer to home. Many employees feel like family and that they would never do something to harm you or your store. That is why instituting smart policies in the beginning, like background checks and a zero-tole nce policy, will help avoid employee theft later on.

Have you encountered employee theft in your store? How did you manage it? Share with us in the comments below.


Melrose International is an industry leader in wholesale home décor, giftware, and seasonal items. Providing outstanding products, service, design, and value since 1985!

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