First Person: How To Reduce or Eliminate Retail Employee Theft

When I was a business advisor, I was constantly asked by retailers that I worked with about reducing internal theft. Anyone around the retail industry can point out that internal theft can often be greater than external theft. These are my tips for reducing internal theft. While it might not stop it completely, it will make internal theft much more difficult, and easier to trace.

Regular Inventories

Retail stores need to take regular inventory if there is going to be any chance of catching, and stopping internal theft. I suggest that retailers take full inventories twice a year (once after the holidays and once in the summer). Smaller inventories should happen at least once a month, if not once a week, on the most popular and most expensive items.

One Person Rule

I have always been a supporter of the "One Person Rule" when it comes to handling the store's cash. While I understand that this might not always work for all retailers, if you are able to reduce the number of people that touch the cash to one per shift, I can almost guarantee that money loss from internal theft will plummet.

Cameras

If you are against having cameras in your stock room, you might as well unlock your back door and invite your employees to walk out with your stock. There are hundreds of studies that have proven that stores with cameras in the stockroom have lower internal theft than those that do not. Which side of this statistic do you want to be on?

Bag Checks

If you are dealing with internal theft in your store, you need to brush up on your local laws that govern what baggage you can and cannot check in terms of your employees. Many employees that commit internal theft walk right out the front door with items hidden in their purses, school backpacks, and laptop bags. A simple rule pointing out what rights that you have to search these bags could significantly reduce your internal theft totals.

Lock Up the Valuables

Hopefully, you have at least one or two workers that you know that you can trust other than yourself. Make sure that you lock up the items that would cost your business the most to lose. This would include the highest dollar items, and the highest profit items. Make sure that there are few employees that have a key to this safe location.

A point that I should make here is that many retailers lock up their most expensive items, but few lock up their most profitable items. Remember, the loss of these items could have the greatest impact on your bottom line.

Talk About Internal Theft

Few small business retailers will talk to their employees about internal theft. If your employees know that you have internal theft on your mind, they might think twice about stealing from you. If you are currently experiencing internal theft, make sure that you employees know that you will not stop, until the internal theft stops.

I would like to take this last opportunity to point out that these points are more than just suggestions. These are forms of stopping internal theft that you need to strongly take into consideration immediately if you truly want to eliminate, or at least reduce, internal theft at your business. These few steps could save your business.

More from this contributor:
How to Manage Your Small Business Cash Flow
Common Reasons Why Small Businesses Fail
How to Accurately Predict Your Monthly Business Expenses