Employee Theft…Management Is Creating It?

Employee theft also known as internal theft causes close to 50% of retail business loss. In the thirty years of conducting employee theft investigations it still shocks me what a poor job most businesses do in common sense prevention. A good example of this is an employee theft investigation I did where $5000 in fraudulent business checks were cashed. It turned out that the back stock of checks were unsecured in a storeroom with office supplies. Janitor’s stole twenty some checks from the middle of the stack waited a month and them began to cash them. Those checks should have been secured under lock and key with strict access. The checks should be issued and logged out to the person that processes them.

Every day we drop our guard because it is more “difficult” to do it the right way. Doing it the right way prevents employee theft. That is the key, “prevention”. Or we say, “oh I trust that person, they would never do that”. Those words get more businesses in trouble. When a management person says that they are basically saying that they have no business common sense.

Another employee theft investigation involved employees that stole hundreds of thousands of dollars in product from a distribution center they worked in. They were given keys to the facility that had millions of dollars of merchandise in it. The alarm system was not set up to log opens and closes. So coming back at night and loading up a truck was not a problem.

Employee theft or internal theft lurks around every corner. You have to be proactive to prevent it. Internal theft will not go away or stop on its own. In fact, it will get worse. Get your policy manual off the shelf, dust it off, update it and make sure people understand that this is your “business bible”, live it and enforce it. That does not mean that it never changes, far from it. As your business changes your policy and procedures should change. If you don’t then make sure you budget for employee theft investigations.

For more information, contact us about internal theft or call 1.770.426.0547