Minimising employee theft in small business

The Global Retail Theft Barometer, an international study, shows that for the 2014-15 period in Australia (which generally has similar figures to New Zealand),employee theft, at 25%, was second only to shoplifting at 39% as a cause of retail losses.

Employee theft impacts on your bottom line, so putting in place a few simple retail loss prevention measures can quickly pay-off.

Employee theft impacts on your bottom line, so putting in place a few simple retail loss prevention measures can quickly pay-off.

So as a small business owner, what do you need to look for to recognise staff stealing, and what are your options for minimising the likelihood of it becoming a issue in your business?

Generally there are five sorts of employee theft that you might face in a small business.

Cash – One of the most common source of losses in small business, particularly in one where you take a lot of smaller amounts of cash, such as a cafe. It can be as simple as a staff member pocketing a small part of the take from the till occasionally, or before they cash up at the end of the day, through to complicated schemes such as overpaying, in cash, a third party for goods or services and then sharing the proceeds at a later date.

Stock – Another obvious potential point of loss, staff can take stock either from the shop floor, or from storage areas. If stock is being taken before it gets entered into your inventory, then it can be hard to track, as it will only show as a discrepancy between what your supplier delivers to you and your stock control systems.

Wages – Generally less of a problem in smaller businesses, but often overlooked, staff claiming for hours that haven’t been worked, or for expenses that aren’t really claimable can be a sizeable drain. The flip side of this loss is employees that spend significant amounts of time during work hours not working.

Information – Not so much of a problem in retail-oriented business, information theft can involve customer lists, product data, internal communications or details of future plans. With smartphones so common, capturing and forwarding all kinds of information, particularly as a photo, has never been easier.

Supplies – It can be as serious as furniture, computers or other business equipment, or as minor as paperclips or pens, but it’s all a drain on your business. A key time to keep an eye out for this type of loss is when staff leave.

Retail loss prevention

Minimising staff related retail shrinkage relies on having the right people, processes and technology in place in your business. While perhaps a bit overwhelming at first for the average small business, it doesn’t need to be.

People – Getting the right people is something that all businesses should be well versed in. Hiring the best staff is something that most owners and managers devote a lot of effort to, but the risk of a new employee stealing can be hard to size up. A topic of many detailed articles, the basics can be found in the ‘fraud triangle’, which explores a person’s opportunity, motivation and rationale for engaging in theft.

Processes -Most small business probably already have in place the processes they need, including stock takes, cash handling procedures, how refunds are handled etc. The only changes you might need to make could be how often these processes are undertaken, and revisiting them with more of an focus on addressing retail shrinkage.

Technology – Implementing the right technology has traditionally been problematic for small businesses, especially when it came to the cost and difficulty aspects of technology at a small scale. Progress in cloud processing and IT generally has however resolved most issues for small businesses, in term of cost effectiveness, and ease of setup and use of various systems.

CCTV systems and business security are a prime example of technologies that have changed significantly for business users.

Traditionally a business might have had a security system that they armed when they closed up, as well as a CCTV system that recorded to video during business hours and could be reviewed as needed. Frequently the cost and complexity of these systems tended to put off quite a few smaller business people. Modern systems like CleverLoop combine a range of features and functionality with ease of installation and low cost that makes them perfect for all small businesses, and a great tool to help minimise problems with employee stealing.

CleverLoop Camera Security System

CleverLoop Camera Security System

All controlled from a smartphone, CleverLoop security cameras provide CCTV functionality perfect for keeping an eye on key areas in your premises. The main entrance, counters and tills and the stock room are all useful places to have a camera capturing footage. Being able to view the footage from a computer or phone while still recording makes checking on any incidents a snap.

When you lock up your premises at the end of the day, you leave your cameras recording, and arm the alert system. Should anything unusual happen, you and anyone else you choose receive an alert, to your phones, immediately, complete with 10 seconds of video showing you exactly what happened. You then get to make the call on whether it’s worth calling the police or not.

Finally, if you are often away from your business, but want to be able to check on how things are going, you can live-view your cameras, wherever you are, on your smartphone.

So if you are looking to reduce the impact that retail shrinkage has on your business, a smart high-tech tool like a CleverLoop security system can be a big help. See more at CleverLoop.co.nz

by CleverLoop Team
March 6, 2017