Employee theft happens in many different forms. Most of the time we think of blatant merchandise or cash theft as the most prominent issue. One method that is often overlooked yet yields the potential for serious losses are refund fraud.

I worked an employee theft investigation where the culprit was an employee who worked at the refund desk. I noticed several of the same high dollar drill was missing from the store. I ran a report and noticed three of them were refunded in the same day. Suspicious? Very much so.

I reviewed the transactions on our CCTV system and saw the associate ring a refund without any merchandise present for the same customer in three separate transactions. Well now I know where that loss went! Because there wasn’t any actual product being returned, our inventory was now short the three drills.

While continuing the employee theft investigation, I noticed that this scenario happened several times with several different items. This case of employee theft quickly had reached the thousands of dollars mark.

Once the employee theft investigation had been concluded, we spoke to the employee. She stated that it was easy for her to do because no one ever looked at her returns. This was against our company’s policy to prevent employee theft. All high dollar returns were to be verified by a manager. Due diligence would have prevented these losses from occurring.

Most companies have policies in place for a reason. If they don’t have a policy, make one. Watchful eyes are the best way to keep employees honest. Don’t give them the opportunity, and they will be less likely to try to cheat the systems you have in place.

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

According to most retail sources, Internal theft still accounts for over 40% of retail shrink losses. This beats out the losses incurred by shoplifters, which is only around 30%. When I talk to my managers and employees on the floor, they generally think of shoplifters as the biggest cause of losses. Sometimes it’s hard to educate them that statistically it is the other way around.

I think there are a few reasons why most of the associates don’t truly understand the scope of internal theft. The first is that catching a shoplifter attracts a lot of attention inside the store. You need witnesses that are generally store employees. Everyone seems to take note when LP comes back in with a shoplifter. Then the police cruiser outside the store makes an even bigger impression. I have always said that catching shoplifters are great PR for the LP department.

Internals are different. Employee theft investigations are always covert. No one inside the store is aware of what is going on until it’s time for the interview. Due to privacy concerns, even after an employee is terminated for internal theft, very few people are aware. Inquisitions are generally met with a blanket statement like “ Yes, so and so is not with the company any more”. It could be the biggest case ever, and a $20 shoplifter would still create more buzz in the store.

The other reason is that people still expect the best of each other. No one really wants to believe that a co-worker they see every day, or chat with in the break room could be guilty of internal theft. While employee theft investigations are constantly being initiated, respect for the employee’s reputation is also held in a high regard. Guilty until proven innocent is crucial to a successful and respectable investigation.

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

There is a double-edged sword in the Loss Prevention industry regarding employee theft cases. High dollar cases are often career makers. These are the employee theft investigations that are talked about on conference calls and in managers meetings. Some companies use these cases as examples even in new hire training. Somewhere along the line though, someone always stops and asks- how did this case get so high?

For most incidents of employee theft, there was an operational breakdown. A door left unarmed. Maybe it was the EAS alarm was never responded to, or a refund never questioned. If someone had used the mantra Trust but Verify, would the losses continued?

Generally the merchandise stolen is not recovered in an employee theft case. Same thing goes for cash. Most common is restitution. That means the employee agrees to pay back the dollar amount for which they have conceded to having taken from the company. If the dollar amount gets to high, the chances of a store ever really seeing the money come back is slim to none.

I had a case where the employee agreed to restitution of $100 dollars a month for the next fifty years to pay everything back. The store will eventually get their money, but that year’s shrink line still took the hit and profits were lost, along with a few bonuses!

While employee theft investigations are difficult to catch early on, it’s better in the long run. The key is to track and catch in the early stages of the theft, instead of after the escalation of losses takes place.

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

Each employee theft investigation I have ever worked on has had its own very specific twists and turns. It sometimes took a lot of creativity on my part to figure out just what they were doing and how they would get away with it. In each case of employee theft there was always one common trait- The Curve.

The Curve is the point that an employee’s thefts swing upward in frequency, severity or both. While this is often the easiest time to identify an internal theft situation, it is also the most costly for a store.

When an employee first starts to steal they do it small. They will pick a low dollar amount of cash, or a single item to pocket or give to a friend. Then they wait. They wait to see if anyone notices, or calls them out on it. Once they realize that no one noticed, they are well onto the second step of employee theft.

This is the stage where they start to work out all the kinks in their plan. A change in how often they feel comfortable stealing. They will gradually increase the dollars of their losses to the stores. Still, they are tentative that someone may notice what is going on. This stage could last for weeks or months depending on how long it took them between their first and second thefts.

If they have yet to be questioned, The Curve is now in effect. This is the dangerous time where employee theft is rampant. They are comfortable in their MO and will steal with reckless abandon. They are confident that since they haven’t been caught yet, they have beaten the system.

It is here that they show up consistently on exception reporting. Their pattern has emerged and they are now the low hanging fruit of employee theft investigations.

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

One of the biggest issues a business can encounter is rampant employee theft. Most small businesses do not factor in shrink losses into their business plan when laying out a strategy for hopeful success. These same excited business owners can’t wait to flip on the “open” sign but many do not and have not any idea the problems internal theft can and more likely will cause them.

Having a shoplifter enter your business who steals $50.00 in product on one occasion is a scary enough thought ; imagine, when you do the math, how much you have to actually sell to make up that $50.00 loss. Now hypothetically envision you hired that shoplifter, gave them keys to your business, your stockroom and your registers. Visualize that every shift that “employee” works they steal $50.00. Would you have any idea how to conduct an employee theft investigation? Would you have any idea that it was internal theft? Would you be blind in trust of your employees that you would not even think to consider the losses could be a result of employee theft? Let that soak in a bit because this is what happens to business owners everyday and many never recover. As stated earlier employee theft is the biggest business killer on the block.

So what can you do? Preferably you start your business plan including loss prevention in the initial budget, but what if you didn’t? Can you catch up? Is it too late? The first thing to do is access the controls you currently have in place. Start with your hiring process. Do you have a pre employment screening process? Do you conduct employee/criminal background checks? If not then how do you know you aren’t hiring the “shoplifter” we discussed earlier? Do you ask pertinent questions during the job interview process? Do you take notes and conduct follow up interviews to flesh out any potential issues? Do you have a new hire orientation explaining that your company conducts employee theft investigations and prosecutes anyone caught stealing?

What physical loss prevention tools do you have currently? Do you have cameras? Where are the cameras pointing? Are they set up over the registers to deter internal theft? Are they set up in your stockroom to aid in potential employee theft investigations? Do you have any “pin hole” camera kits to aid in internal theft investigations? Do you have anyone employed who is trained to conduct an employee theft investigation? Do you have daily inventory category counts of product to monitor losses? Do you have daily register audits? Do you ensure employees count in and out on their own registers? Do you conduct bag and pocket checks whenever an employee leaves your business?

It is never to late to take steps to deter employee theft. The key is setting up a strategy that starts with the hiring and orientation, then set up your physical controls (cameras/audits etc). Deterrence does not work on everyone so it is important to ensure that you always consider every loss incurred as being perpetrated by an employee. You should take steps to narrow the focus of when the losses occurred, who was working and who had access to the items stolen. At this point you can utilize your daily reports and cameras to catch the employee who is committing the loss. Once you have gathered the evidence and obtain a confession (I recommend that only a trained interviewer conduct a loss prevention interview). Then it is very important to follow through with conviction and termination. That will also help deter other employees from conducting internal theft.

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

I recently concluded an employee theft investigation. This was a little different than ones I had previously worked on. This case of employee theft wasn’t just about an employee in my store stealing; it was about a partnership between an employee and a vendor.

I was noticing through routine audits that paperwork for some direct from vendor merchandise seemed to be incomplete for a very long time. The policy was within 24 hours, but this manager waited for weeks to complete it. After questioning the manager as to why it took so long, and reiterating the 24-hour policy, it still wasn’t completed.

After the first month or so, I noticed serious discrepancies in what we had for inventory and what we had in invoiced amounts. There was an increase in the orders, but no increase in sales or stock levels in the store. I immediately started an employee theft investigation on the manager.

One of the first steps I took to determine if it was an employee theft case was to watch the deliveries on CCTV. Sure enough, this manager greeted the same delivery guy for each order. Then the delivery guy loaded up cases of the product in question. Under normal circumstances, it would not be unusual for this vendor to remove any “old” product. Since the manger did not record and charge the vendor back for these cases (per policy), I knew I had a case of employee theft.

The end result of this employee theft investigation was that the manager let the vendor take out cases of product but never charged them back to the company. This way the vendor kept his high commission of the product. The manager later met up with the vendor and took the cases home with her for personal use.

This was a case where the paper led a trail in an unexpected way to employee theft.

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

There are many ways that we as retailer can take losses due to internal theft (also called employee theft).  We are vulnerable to the obvious theft of cash.  Also, like shoplifters, employees can steal merchandise as well.  A surprising cause of internal theft is what we call “sweethearting”.  This is where employees steal by giving breaks to others.  These breaks can come in the form of extra discounts and can also be done by pass-offs.  Pass-offs are when the employee bags the merchandise and “passes it off” without scanning it for purchase.  These instances of “sweethearting” can be done to aid co-workers, friends and family members.

The only way to find out if this is going on in your store is to conduct an employee theft investigation.  An employee theft investigation into pass-offs can be hard to do.  Personally, I suggest using a trained Loss Prevention Professional as they are skilled at performing this type of complex investigation.  However, if you choose to look into this on your own, here are some tips I suggest.

First, keep an eye out for cashiers or associates who always have friends and family members hanging around.  Since most theft is a crime of opportunity, these individuals would be a high risk category.  Another thing to look for are customers who are adamant about going through a particular line.  There may be a shorter line available, but they decline to move.  I know that some customers develop a relationship with certain employees, but it is odd that a customer declines a faster checkout experience.  They may be getting hook-ups from the employee whose line they are in and that is why they don’t want to move.  Finally, look at employees who have high amounts of markdowns.  All of these things can help you root out employee theft in your store.

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

Employee theft is unfortunately part of the reality of operating a small or large business.  Employee theft is measured at being responsible for over half of all retail industry shortage.  Any business owner should be aware of this activity and take the appropriate measure to address it.   Employee theft can manifest itself through internal collusion or assisting in the theft by an external party.  Most often though internal theft is the primary form of employee theft that impacts businesses.

Internal theft happens in many different ways.  Most retail businesses have cashiers.  These cashiers have access to many assets.  Retail cashiers have access to the register funds.  Their access to this and the level of direct supervision often create and environment that is conducive to internal theft.  It is just not a business’s cashiers that can cause a loss.  Any employee in your organization has access to assets.  The stock workers have access to your inventory, the facilities staff often work unsupervised and afterhours, and the management staff has direct access to the safe and reserve funds.  As demonstrated, every employee could potentially cause a loss.

If a business is experiencing employee theft, the next step should be to begin employee theft investigations.  An employee theft investigation should begin when an owner or leader notices that a loss has occurred or as a routine measure.   The employee theft investigation’s goal should be to uncover and resolve internal theft issues.  The employee theft investigation can employ the use of loss prevention personnel, interviewers, CCTV systems, personnel surveillance, and controlled auditing.  Whatever the leaders choice, the end goal should not only be removing the guilty party, but also identify any control or supervision issues.   The employee theft investigation can also support an course correction that might be needed.

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

Businesses are facing the growing problem of employees taking advantage of their employers.  In my extensive experience in the retail sector, I have seen some brazen acts of internal theft perpetrated against employers.  Internal theft or employee theft occurs when an agent or employee of a company steals from the company.  Internal theft was by far one of the most costly forms of theft I have seen in all my years working as a loss prevention manager.

I remember a case of employee theft where I began an employee theft investigation based on a tip I received from another associate.  The employee theft investigation focused on cash shortages.  I noticed that there was a pattern of small cash shortages occurring every time a specific associate worked.  During the employee theft investigation I learned that the associate would always do a no sale and open the drawer just before leaving to go to lunch.  I decided to conduct video surveillance of the associate and saw that when she did the no sale, she would remove cash from the drawer.

Once I had concluded the employee theft investigation and brought the associate in for an interview the associate was told that they was seen removing money from the register and not placing it back into the register.  The associate admitted that they were taking the money out of the register and they used the money to buy their lunch.  The associate said they started doing this shortly after they began working.  The associate admitted to employee theft in the amount $300.00 in cash.  The associate had only been with the company a couple of months and was well on their way of costing the company thousands in cash losses.  It is unlikely that the associate would have not escalated the theft to begin taking merchandise as well.

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

There is a new trend of employee theft (also known as internal theft) that I am finding in my stores.  This internal theft concerns gift cards.  Generally gift cards are hard to steal since most don’t have any value until rung in the POS system.  If a cashier tries to ring up a gift card and does not put money in the register then the till will show short and the theft is obvious so this does not happen often.  I completed an employee theft investigation a few months ago that has yielded a new twist and turned into several internal theft investigations.

What I found during this employee theft investigation was that the cashier used coupons to “pay” for the gift card.  Here is how this theft is occurring.  Many stores (especially as we approach the holidays) carry gift cards to a variety of other stores.  Most all stores have in house gift cards available for purchase as well.  The cashier will ring up the gift card when no one is around and then use coupons that have already been redeemed by other customers to “pay” for that gift card.  The register thinks the card was paid for so no shortage occurs in the till.  It is not until you reconcile the coupons that you find that you do not physically have as many as the system shows were redeemed.  In many stores that take in mass quantity of coupons (such as grocery stores) those coupons get sent to a third party and the store may never see the chargeback that hit their cash line when the coupons are “redeemed” with the vendor.

In order to pick up on this type of employee theft I suggest looking at a few things.  First, keep an eye for gift cards and coupons lying around the registers that don’t belong.  Also, look at employee purchases with gift cards and then trace the origin of that card to see how it was valuated.

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