Don’t let Employee Theft Run Rampant!

Many small box retailers find themselves centering their full attention on shoplifting as their main cause of inventory loss. This is a very dangerous thought process that can lead to a business crumbling. Employee theft is the largest cause of inventory loss period. I worked for, at the time, a small retailer which sold video and PC games. The business has grown exponentially since then and I have to believe that their success in part was because of their ability to change the overall thought process of how shrink occurs.

When I first started I was brought into the corporate office as a loss prevention administrator. I was dumbfounded to learn that my boss, the director of loss prevention had not one bit of loss prevention experience. In fact she told me that she was a store manager before being promoted into the Director position. My job duties were limited to reviewing daily store paperwork and pulling credit card slips for chargeback disputes (when a customer disputes a charge the retailer has to show a copy of a signed/imprinted credit card slip to win the dispute). There was no talk of employee theft investigation; in fact it wasn’t until my second week on the job before I heard anyone mention employee theft. That conversation was troubling since my boss was telling district managers on a conference call that internal theft is so minimal in the company that they should instead focus on anti-shoplifting methods to control their losses.

This lead to many district managers scratching their heads but they pushed forward using ideas given by my boss. They “gutted” all of their inventory, placing the games in locked drawers behind the register as well as in the stockroom. This process took the stores about two months to implement. My boss had even suggested to the district managers that once the product was secured they could cut back on their daily inventory counts since the losses would most assuredly stop. District managers who brought up the idea of conducting employee theft investigations were met with indifference. There most definitely was a slight improvement in inventory loss in some locations, however in many locations and areas of the country not only did the losses not stop, they shot through the roof.

Employees were given the access to the product in the stockroom, they had keys to the lockable cases, the product was already gutted and easily concealed, there were no bag checks conducted at the store level. Internal theft ran rampant and my boss was clueless. Fortunately I had made a few friends in the inventory control department as well as sales audit and started some employee theft investigations to nail down some of the larger employee theft cases. I was able to work closely with the district managers sharing loss trends, having them do surveillances and then surprise bag checks which ended up catching a few real time employee theft cases. I was able to successfully phone interview the suspects’ real time and obtain large dollar admissions which translated to prosecution and restitution. After about ten of these cases my boss left her position with no notice. To this day I have no idea where she went but it took at least two years for us to put together a real loss prevention team and to gain the respect of the operations sales team. Once the focus was put on internal theft as a primary cause of loss and district managers were properly trained to aid in employee theft investigations were able to cut the company’s shrink by half, which surpassed anyone’s expectations.

For more information on internal theft, employee theft investigation or employee theft contact us or call 1.770.426.0547 – Atlanta Georgia

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