Retail Shrinkage and More News

theft (13)Recent research about loss prevention states that the industry loses about $57 billion yearly. The perpetrators are more brazen and the consequences more expensive. Surveillance and private surveillance personnel are not enough to stop shrinkage in the retail industry. The steps that the store employee can follow depend on the store and the state they are situated. Private Citizens are generally not allowed to restrain people against their will and by doing so opens the doors for civil or criminal law suits. For more news about shoplifting follow the links below.


Survey: Retail shrink translates into $57 billion loss; cash theft jumps 20%

New York — Shrinkage levels average 1.27% of sales, which translates to a $57 billion loss to the industry, according to the U.S. Retail Fraud Survey, which is based on research into the systems and strategies used by 100 leading North American retailers.

The biggest area of store loss remains employee theft (38% of shrink), up 3% from last year, according to the study, published by U.K. based Retail Knowledge and sponsored by Volumatic and Kount. It is followed by cash theft (24%), up 20% from last year, administration and book keeping errors (21%), down 9%, and shoplifting (11%), down 15%.

The biggest area of online loss is fraudulent use of credit cards (59% of shrink).

In other survey highlights:

• Return fraud is costing retailers an average of 0.25% of sales this year, compared with an average of 0.4% last year.

• With regards to loss prevention departments, on average, each member of the fraud prevention team is responsible for $103 million of sales.


Retailers apprehend shoplifters and dishonest employees in record numbers

While the increased brazenness and skills of both shoplifters and unscrupulous employees continue to plague retailers across the United States, the industry’s most respected loss prevention researchers offer some good news in their just released survey. According to numbers highlighted in the 26th Annual Retail Theft Survey conducted by Jack L. Hayes International, the leading loss prevention and inventory shrinkage control consulting firm, both apprehensions and money recovered from retail theft increased again in 2013.

The survey says almost 1.2 million shoplifters and dishonest employees were apprehended in 2013 by just 23 large retailers, who recovered over $199 million from thieves. The figures show that shoplifting apprehensions were up 2.5 percent and recovery dollars increased by 4.5 percent. When it came to cracking down on internal theft, the survey revealed that apprehensions for dishonest employees rose 6.5 percent and recovery dollars rose 2.5 percent. According to Mark R. Doyle, President of Jack L. Hayes International, these figures display a positive trend of apprehension and recovery that has been seen for three consecutive years.


A look back: Four lessons from my first LP conference

I was named NRF’s Vice President of Loss Prevention a little more than a month ago. It was perfect timing for me to jump in and do my best to meet thousands of my peers at NRF’s annual Loss Prevention Conference. Here are my top takeaways after experiencing the event for the first time behind the scenes.

  • There’s a live stream audience for retail loss prevention. Gus Downing, producer of the LP News Network (LPNN), led this historic first-ever live broadcast from any loss prevention conference. Thousands of viewers watched LPNN’s eight hours of educational content, news and even an interview with me and Vicki Cantrell. Thanks to Downing and his team for their diligent coverage of the retail loss prevention issues that matter most to our community – at the event and throughout the year. There is added value as the stream is currently being broadcast on the D&D Daily as the gift that keeps on giving to the LP community.
  • We’re in the age of “Brand and Business Protection.” The protection of products, our brands, employees and customers: No matter your focus, Cantrell was direct in her opening remarks last month. “We must prepare, plan, preserve, prevent and – most importantly – protect those we are entrusted to serve. By protecting our organizations, we keep them strong, and it is the strong who survive and thrive.” The transformation of NRF’s Loss Prevention Conference to NRF PROTECT is a commitment from NRF to prepare this community for the growing challenges, threats and responsibilities for retail loss prevention professionals. Keep your eyes peeled for more to come!

Why Your Employees Need to Know The Shoplifting Policies in your Store

law-3A shoplifting case in any state can run from an infraction or a misdemeanor to a felony charge. Many communities across the United States are urging government officials to make a shoplifting case charge into something serious to deterred shoplifters from entering their stores and getting away with stolen merchandise.

Policies across the retail industry vary tremendously. Regardless of the policies you want your employees to adhere to, those policies have to be understood and follow through regardless of the situation. Law suits against retail stores are prevalent and costly, educating your security employees about the policies and laws in the state and your store can prevent expenses your business can do without.

Follow more stories about shoplifting by following the links below.


Target security officer fired after reporting shoplifting

Dallas Northington spent nearly eight years working for Target in loss prevention, roaming the stores and scanning the surveillance cameras. In an episode at the Leesburg Target store in May that he said was typical, a man was allegedly captured twice on video shoplifting, and Northington responded as he said he always did: He called the Leesburg police, made a report and provided them the videos of the two incidents.

But the man in the video may have been a Fairfax County sheriff’s deputy, Northington said he soon learned. And within days, two things happened: The deputy retired from the sheriff’s office and Target fired Northington, 29, a married father of two with a third child on the way.

Northington said Target officials told him that he had violated procedure by not filling out the proper paperwork before contacting the police, though he said his office had operated the same way for years. He said he also was told that he had been insubordinate for not seeking approval before calling police, though he said the standard practice was for him to act as needed.


Va. sheriff’s employee to be charged in shoplifting

WASHINGTON (AP) – Leesburg police say a Fairfax County Sheriff’s Office employee will be charged with shoplifting in a case that drew attention after the Target security guard who reported the alleged crime was fired.

The sheriff’s office employee has not been identified, and formal charges have yet to be filed.

Leesburg police say they identified a suspect a few days after the theft in late May and were awaiting word from Target on whether to proceed with charges. Police say they got that word from Target on Monday.

Police say the decision to fire the security guard was a corporate decision made by Target. Dallas Northington told The Washington Post that he was fired after Target told him he violated procedure by filling out paperwork before calling police.


Man wanted for shoplifting at Suffolk Walmart

Suffolk, Va. – Suffolk police are seeking the public’s assistance in identifying a man involved in a shoplifting incident at Walmart.

It happened on July 12 shortly after midnight at the Walmart located in the 6200 block of College Drive.

The suspect is described as a black male in his late teens or early 20’s wearing a dark tank top, camouflage shorts, a dark do-rag, flip flops and dark socks.

Surveillance cameras captured the suspect pulling a plastic Walmart bag from his pocket and placing several items in the bag and then proceeding past the register.

A loss prevention officer saw the suspect driving off in a tan colored Ford SUV.

Anyone with information is asked to contact Crime Line at 1-888-Lock-U-Up.

When calling Crime Line, callers do not have to give their names or appear in court.


Are You Letting Your Employees Steal From You?

theft (2)Employee theft is one of the most difficult issues a business owner faces. An employee is 15 times more likely than a non-employee to steal from an employer and they are responsible for approximately 44% of business’s theft losses (National Federation of Independent Business). And yet it’s one of the problems owners and managers are least likely to address.

However, the denial method of management doesn’t work causing nearly a 1/3 of businesses to fail due to employee fraud (U.S. Department of Commerce).  There are many reasons why owners are resistant to addressing the problem of employee theft. Three of these reasons are centered in the owner’s personal beliefs.

I’m a good guy – Some managers simply refuse to consider the idea that their employees would steal from them. They believe “I’m a good guy, so my people will never steal from me”. They misinterpret the issue of employee theft as a personal issue, a referendum on their character, rather than the personnel, business and legal issue that it is.

It’s not that much – Many loss prevention specialists, accountants and business analysts are aware of the open “secret” in many small businesses. Some owners and managers know and don’t care that their employees are stealing. They think, but don’t actually know, the loss is a small amount and for a variety of poorly thought out reasons believe it’s “not worth dealing with”.

There’s nothing I can do about it – These owners or managers don’t want the responsibilities of their jobs. They develop beliefs which permit them, in their minds, to not be held accountable for their managerial duties. For example, they have convinced themselves thatit’s impossible to find good quality workers, so employee theft happens all the time and everyone does it. In this rationalization, there’s nothing the manager can do, so he’s justified in doing nothing.

One of the most important components to any comprehensive loss prevention program is management’s commitment to and involvement in it. Many times business owners can be the biggest obstacle to a successful program due to their erroneous personal beliefs. Regrettably, many have found that ignoring the vital issue of employee theft leads to drastic consequences.

Nicole Abbott – writer, educator and psycho-therapist


Crime and Education

law-3It is unclear according to researches whether the United States can reduce the crime rates by increasing education. The clear notion about crime- and in this case shoplifting crime- is that the United States alone loses billions a dollar every year to this very expensive social issue and a solution is still to be seen. To read more about this follow this link.

To read more about other shoplifting issues follow the links below.


Are All Criminals Stupid?

Sane people are thrilled that those dimwitted criminals are in prison so they can’t add to the gene pool even more.

Are all criminals stupid or are all stupid people criminals? Evidently it is true that one has to be a little stupid to choose a life of crime. The following evidence seems to substantiate that fact.

James Elliot took his .38 caliber revolver with him to carry out a robbery in Long Beach, California, and the gun failed to fire leaving his intended victim wild-eyed in fear. James then did something that will guarantee his entrance into the Stupid Criminal Hall of Fame. He looked down the barrel and pulled the trigger again! This time it worked. Jimmy is no longer with us but then he never was!

Recently a man walked into a gun shop and tried to rob it with a baseball ball bat! The owner and customer used their guns to convince him that he was deficient in his planning. Just as an intelligent person does not take a knife to a gun fight, you don’t take a ball bat to rob a gun store.


Sears Holdings Support Communities, Fight Shoplifting with Restorative Justice Solutions  

Petty Theft Loss Prevention Program Success Leads to Expanded Adoption Nationwide.

SALT LAKE CITY – June 18, 2014 – Turning Point Justice (TPJ), the trusted provider of collaborative loss prevention solutions for retailers, and its partner the National Association for Shoplifting Prevention (NASP), today announced that Sears Holdings Corp. is expanding TPJ loss prevention solutions at select Sears and Kmart locations nationwide. The Court Alternative Program (CAP) is an innovative restorative justice solution based upon the principle that cooperation between retailers, law enforcement and the justice system saves time and money for both retailers and communities while improving offender accountability and reducing recidivism.

“Sears Holdings continues to support progressive loss prevention practices, such as TPJ’s innovative restorative justice solutions, that further elevate our leadership position in this industry and support our communities’ law enforcement efforts,” said Scott Glenn, chief security officer, Sears Holdings. “In pilot testing, we experienced a more than 50 percent reduction in the need for police and prosecutor support for shoplifting incidents at stores, which helps local law enforcement focus their resources on more serious crimes than petty shoplifting.”

CAP enables loss prevention teams to quickly identify qualifying offenders who voluntarily admit to the theft and desire to resolve the incident without the need for an immediate law enforcement response. Offenders who choose to participate in CAP pay restitution to retailers and complete proven National Association for Shoplifting Prevention (NASP) shoplifting education programs that are used by justice systems across the United States. CAP is available at no cost to retailers.


Shoplifting Prevention For Retail Stores

If you’re the owner of a local retail store, there are many things that you can do to maximize profits. One thing that every retail store faces is loss due to theft, and some business owners just write theft off as something you can’t prevent. While you certainly can’t prevent theft with absolute certainty, there are certain things that you can do minimize it and prevent major losses. One major thing that you can do to combat theft is to invest in security cameras that you can place around your store. There are many ways that cameras can help you avoid theft as much as possible.

First, cameras act as a major deterrent to those who might otherwise try to shoplift in your store. The presence of cameras can be intimidating and make it discouraging for potential shoplifters. It’s one thing for an otherwise confident person to walk into a store he or she knows isn’t monitored by cameras, but it’s an entirely different thing to know that every move made will be recorded. This forces shoplifters to be extra careful, which many of them likely won’t really consider to be worth it.

Although cameras can reduce theft, they can’t prevent it entirely. In cases where theft does take place, having high performance cameras in place can help you ensure the responsible parties are brought to justice. Having high-resolution images to sort through as you’re attempting to find culprits in cases of theft can make it much easier to do so.


Same Time Next Week

theft (5)Shoplifters are surprisingly creatures of habit. My initial assessment was that a shoplifter, who is desperately trying not to get caught, would work hard to vary the times and days that they would come into a store to steal. I thought they would want to take a surprise approach to their thieving ways. I was actually quite wrong in my assessment.

The truth is most shoplifters want to find a comfort zone to steal in. They are looking for a tried and true way to get in and out of a store undetected. That is why if they steal something and get away with it on the first try, they will continue to use those same methods and manners in their subsequent thefts.

Luckily for us, when a shoplifter develops a pattern, it makes it easier for us to catch them and put a stop to the shrink losses they are creating. By identifying the pattern they created, we can be one step ahead of them and can be waiting to catch them, just like this shoplifter.

I was working for a home improvement store. We started loosing large rolls of electrical wire worth several thousands of dollars. Since these were large, heavy items that were not frequently shuffled around, we set up a camera to see if we could find out where they were going. After a few weeks of watching, we saw that every Friday around noon a man came in, loaded a roll onto a cart and then switched the price tag out for a less expensive one. The cashier charged him for the roll of wire based on this lower priced tag.

Since we found his pattern, we waited until the following Friday. Sure enough he was just like clockwork. Noon came and so did he to walk off with another one of our rolls. This time, we were there to intercept the transaction and have him arrested.


Shoplifting Laws and more News

theft (10)Shoplifting laws across the United States vary and some states can and will change the laws as they see fit. Laws in Arkansas, Georgia or Indiana may well be worded differently but the truth is shoplifting is a crime and shoplifters may face criminal charges or a misdemeanor. The National Association for Shoplifting Prevention has a page with the laws for every single state in the United States and the laws governing shoplifting and what it entails. Follow the links to see more about this topic.


Alleged shoplifter flees scene with kids in car, crashes

CABOT, Ark. (KTHV) – A man is charged with numerous felonies after allegedly fleeing the scene of a shoplifting at a Cabot Walmart with four children inside the vehicle.

Sgt. Keith Graham said officers responded to the Walmart on S. Rockwood June 16 just before 7:45 p.m. about a shoplifter fleeing the store. After chasing the suspect through the neighboring Dixie Café, the suspect then got into a gold Suburban and fled the area.

Officers began chasing the suspect from the Walmart to 67/167 southbound. Graham said the gold Suburban took exit 16 at a high rate of speed, then lost control of the vehicle and it flipped, coming to rest in a ditch long the roadway.

The driver, 28-year-old Christopher Carver, was taken into custody after the accident, and while searching the vehicle, officers found four small children inside. They were taken to Arkansas Children’s Hospital to be checked out.

Carver was taken to North Metro Hospital for minor injuries, and then transported to the Cabot Police Dept.

He is charged with shoplifting, fleeing, two counts kidnapping, second degree battery, and four counts of first degree endangering the welfare of a minor.

He is currently being held on $100,000 bond.


Local Stores Meet In An Effort To Prevent Shoplifting

Competitors are coming together to combat a big problem in Grand Island: shoplifting.

Grand Island Police brought local stores together for a second meeting Tuesday.

Shoplifting isn’t a huge problem at Carla Jensen’s store, but she knows the consequences if it becomes one.

“If there’s no money coming in, if it walks out the door, that means no money goes in my pocket or no money goes to the store,” said Jensen, owner of Royalty Boutique. “If there’s not enough in there to pay the bills then the store shuts down.”

G.I. Police Officer Butch Hurst said other local stores are being hit hard by thieves.

“It’s fairly severe,” Hurst said of the problem.

That’s why retailers – big and small – are coming together to swap information on the shoplifters they’re encountering.

“If they have photographs or digital, they show it to each other and say ‘hey, do you know this person,'” said Hurst.

Police want that information too.


Storeowners complain new shoplifting law in Indiana too lax

INDIANAPOLIS — Retailers are relieved that lawmakers have fixed an error in a new criminal law that would have made it tough to arrest shoplifters. Now they want a harsher penalty restored for thieves.
They contend the real problem with the new criminal code that goes into effect July 1 is a provision that drops theft from a felony to misdemeanor if the stolen goods are valued at less than $750.

“We’ve got a huge problem with that,” said Grant Monahan, head of the Indiana Retail Council, which represents thousands of store owners statewide.

On Tuesday, the General Assembly met in an unusual session to make “technical corrections” to the 400-plus page bill that overhauled crime and punishment in Indiana. While toughening penalties for violent crimes, the new law reduces punishments for some theft and drug possession crimes by making them into misdemeanors that are rarely punished with prison time.


The Typical Characteristics of Embezzlers

theft (8)The crime of embezzlement is on the rise. There are many reasons for why it’s on the increase. One of the reasons is that business owners and managers don’t envision the embezzler as a potential criminal. The average embezzler doesn’t fit the idea of a stereotypical offender, therefore, supervision becomes lax. This leaves people and situations not monitored as well as they should be.

Embezzlers share more characteristics with the general populace than with other criminals. As a result, it’s important for managers and business owners to understand the profile of the average embezzler. Here are their most typical characteristics.

Age –They’re usually older than other criminals, past 30, and they begin their criminal activity at a much later age. Those who’re classified as major embezzlers often begin in their early 40s. (2011 Marquet Report on Embezzlement).

Family situation – Most are married with traditional family situations. They usually come from intact and stable families of origin.

Education – As a rule, they have higher levels of education than the average criminal.

Race – The majority of perpetrators are white.

Employment/Criminal History – Nearly all of them are first-time offenders with clean employment histories. Over 80% have never been charged with a crime or terminated from a job. (2012 Association of Certified Fraud Examiners Report)

Job Responsibility – It’s estimated that professional and managerial staff commit 40%, clerical, bookkeepers and other employees commit 40% and senior officers and owners commit 20% of embezzlements.

The size of the loss is frequently related to the position the perpetrator holds. The median loss committed by owners/executives is $573,000, by managers $180,000 and by employees $60,000. (2012 Association of Certified Fraud Examiners Report)

Gender – Until recently 70% of embezzlers were older males who’d attained a position of trust and authority, which provided the chance to commit the crime. But, with more women reaching positions of authority and responsibility, the percentage of female embezzlers has increased to 64% in the last several years. However, men on average steal significantly more than women. (2011 Marquet Report on Embezzlement).

Psychological Issues – Embezzlers usually don’t have an antisocial personality, which is much more common in other criminals. However, they do have mental health issues, most notably gambling problems (30%) and depression and/or anxiety, which may be as high as 80%.

It’s human nature to trust those who we perceive as being like us. Unfortunately, there’ll always be people who’ll take advantage of human nature. Managers can better protect their businesses by educating themselves about the typical characteristics of embezzlers.

Nicole Abbott – writer, educator and psycho-therapist

 

 

Summer Employment And Theft

theft (1)Billions of dollars are lost every year due to theft. Research shows that employee theft is one of the most costly thefts for an employer. A policy that clearly states your position for employee theft, and is clearly communicated to an employee when hired can make this costly issue more preventable. Making employee theft prevention a priority in your business will not only decreased shrinkage but will be a great deterrent against employee theft.

Read more about this issue by following the links below.


How to prevent summertime employee theft

With the summer season getting into full swing, many businesses are readying for one of the busiest times of year. Amidst the paperwork and new inventory, it is equally important to be mindful of the employee theft risk associated with this big business boost.

According to the U.S. Chamber of Commerce, 75 percent of employees steal from their workplace and many do so repeatedly. For both summer businesses as well as traditional businesses with a high summer season, the use of seasonal employees is part of the business culture. Studies suggest seasonal employees have increased theft rates creating a dual challenge for business owners and managers – dealing with a large volume of business in a short period of time and managing risk to the business.

While there is no way to eliminate the risk of employee theft, a business can look to ways to minimize it. A business owner or manager can minimize the risk by understanding factors that can lead to employee theft and making adjustments in their business operations. There are multiple factors to consider; but rationalization, opportunity, and the expectation of getting caught are chief amongst them.


5 Clauses to Include in Summer Employment Contracts

Summer is here, and business own should be polishing their employment contracts for seasonal hires.

Here are the five must-have clauses for any summer employment contract:

1. Length of Contract (Term of Employment).

It’s important to be as specific as possible in defining the duration of a summer employee’s contract, so that there is no ambiguity as to when the position ends. A termination clause can also be folded into this area of an employment contract, specifying how either you or the summer hire can terminate employment with or without notice.

2. Compensation.

Don’t just gloss over this step. Be very exacting in describing the kind of compensation that a summer hire will receive. Include whether the employee will be paid hourly, salaried, or per completed project, as well as any benefits included with the position. This may be a good place to include your summer hire’s vacation policy, which does not have to include paid time off.


Checkpoint Systems Launches Next Generation of EAS Solutions

THOROFARE, N.J. – May 27, 2014 –Checkpoint Systems, Inc., (NYSE:CKP) a leading global supplier of merchandise availability solutions for the retail industry, today announced the launch of the next generation of intelligent electronic article surveillance (EAS) solutions.

The EVOLVE iRange, developed alongside global retailers, comprises six different state-of-the-art EAS antennas, a broad range of EAS labels designed for visible and source-tagging application to various types of merchandise, and the Counterpoint iD deactivation unit for faster and consistent deactivation at point-of-sale (POS).

Together, the portfolio promises to deter theft from potential shoplifters, a high degree of confidence that protected merchandise has been deactivated efficiently to avoid unpleasant false alarms for honest shoppers, and security that the antenna alarms are indeed shoplifting attempts so store personnel can respond appropriately.  Initial tests have resulted in increased product availability at test stores, improved in-store efficiency at the POS and an increase in positive attitudes towards the shopping experience for consumers.

EAS Jammer detection technology is one of the latest additions to the EVOLVE iRange. Integrated into antennas within the portfolio, the system identifies if an EAS ‘jammer’ has been brought into the store and activates an alarm, which alerts staff to the potential threat. . This acts as a strong deterrent for possible shoplifters and organized retail crime members, resulting in abandoning the shoplifting attempt.


Preventing Shoplifting In Your Business

law-3When a small business owner learns that an employee has been stealing from the business, many times they terminate the employee without prosecuting. Lawyer’s fee and other costs incurred by hiring an attorney sometimes do not make financial sense compared to the amount the employee has stolen. Prosecuting an employee who has been caught stealing can protect the company or small business owner against a civil law suit, and can help recover the company’s property, but most importantly it can serve as a deterrent to other employees.

Read more about this by following the links below.


10 ways to prevent theft, fraud by your employees

According to the National Federation of Independent Business (NFIB), an employee is 15 times more likely than a non-employee to steal from an employer, and employees account for an estimated 44 percent of theft losses at stores. The U.S. Department of Commerce reports that nearly a third of business failures are related to employee theft or fraud.

Employee theft is one of the most serious problems facing small business owners in the U.S.

According to the National Federation of Independent Business (NFIB), an employee is 15 times more likely than a non-employee to steal from an employer, and employees account for an estimated 44 percent of theft losses at stores. The U.S. Department of Commerce reports that nearly a third of business failures are related to employee theft or fraud.

Business owners are rightly concerned — or should be. Employee misdeeds take many forms:

• Larceny (outright theft).

• Skimming (diverting business funds).

• Fraudulent disbursements (billing schemes, inflated expense reports, check tampering).


Checkpoint Systems Launches Next Generation of EAS Solutions

New EVOLVE iRange Offers Complete Solution to Retailers’ Merchandise Availability and Customer Satisfaction Challenges.

Checkpoint Systems, Inc., CKP -0.39% a leading global supplier of merchandise availability solutions for the retail industry, today announced the launch of the next generation of intelligent electronic article surveillance (EAS) solutions.

The EVOLVE iRange , developed alongside global retailers, comprises six different state-of-the-art EAS antennas, a broad range of EAS labels designed for visible and source-tagging application to various types of merchandise, and the Counterpoint iD deactivation unit for faster and consistent deactivation at point-of-sale (POS).

Together, the portfolio promises to deter theft from potential shoplifters, a high degree of confidence that protected merchandise has been deactivated efficiently to avoid unpleasant false alarms for honest shoppers, and security that the antenna alarms are indeed shoplifting attempts so store personnel can respond appropriately. Initial tests have resulted in increased product availability at test stores, improved in-store efficiency at the POS and an increase in positive attitudes towards the shopping experience for consumers.


Lakewood shoplifting gunman who fled with child in car identified

A man suspected of shoplifting, pointing a gun at a security guard and fleeing with a 2-year-old child in a Jeep SUV has been identified.

Angelo Erin Arellano, 29, was tracked and bitten by a police dog in Denver where officers found the suspect hiding, according to police.

The incident started in Lakewood about 11:10 a.m. Tuesday, when police were called about a pair of shoplifters at the Walmart at 7455 W. Colfax Ave., according to a Lakewood Police Department news release.

A store security guard who tried to stop the man and a woman told officers that the man pointed a gun and the couple fled in a Jeep.

Officers spotted the vehicle, leading to a chase into west Denver.

The Jeep stopped, and the driver, a man, bolted on foot.

Left behind in the SUV was 28-year-old Jamie Lee Carrillo and her 2-year-old child.

Arellano, found a short time later hiding in a nearby area, was taken into custody, police said.


Narcissistic Behaviors

theft (13)Employee theft is probably one of the hardest forms of theft to detect and resolve. The problem is that these employees have an advantage over you. They know your systems, they know who is observant, and they know when the best times to steal are. Employees also have access to different processes and assets that shoplifters do not have.

An employee who is embezzling money, instead of stealing merchandise, typically will not show indicators that would make you initially suspicious. What we have found over years of investigations and interviews is that these employees do show other behavioral patterns. When combined with certain access to accounts, billing, and cash processing, the behavior should be a red flag to their employers.

The first warning sign is the employee displaying any overtly narcissistic behaviors. The textbook definition is that a narcissistic personality is a person who is excessively preoccupied with personal adequacy, power, prestige and vanity, mentally unable to see the destructive damage they are causing to themselves and to others in the process.

Typically these employees will build themselves, their position and their responsibilities up. They withdraw other employee access to their jobs, saying the other employees simply cannot perform the job functions satisfactorily. The other employees are under qualified, and the employee is the only one who can do the job right.

They will then validate and secure their positions by saying they are the only ones who can do their job. What would you do if I left? No one else can do this, I have to be here. They will often change the way processes are done, or have their own filing system. They will do anything they can to simultaneously confuse anyone who attempts to look in on what they are doing, and validate how complicated their job is; in essence creating their own job security.

What they are actually doing is finding ways to keep everyone else out of their paperwork. If they are embezzling, they are siphoning money by creating false invoices or payments, they can be creating write offs, even when a customer pays in full. They can be floating money from one account to another to cover up the cash they are taking.

The solution is to be wary of any employee who is displaying these narcissistic behaviors. They are building themselves up, while pushing blame onto those around them in an attempt to derail you from becoming suspicious of them. Next, make sure you have a check and balance system in place. There should be a standard way to handle all accounting practices. No one should create their own system. This system should also have a periodic audit to ensure compliance and integrity of your books.

Even though it makes more sense financially to hire only one person to do all of your paperwork and accounting, have a second person split the responsibilities. Accounts payable and accounts receivable (sales, receiving, cash management) functions should be split to lessen the likely hood of an employee embezzling money from you.