Reducing small business losses from staff theft

Most people, if they think about the losses that a retail small business faces, they tend to think about shoplifting. In contrast the Global Retail Theft Barometer, an international study, shows that for the 2014-15 period in the US, employee theft, at 45% was the number one cause of retail shrinkage, with shoplifting second at 36%.

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 if you are a small business owner who works hard to reduce shoplifting, do you know what to look out for when it comes to staff stealing, and what can you do to stop it becoming a problem?

In any business there are 5 basic types of employee theft that you may encounter.

Cash – Any business that does a lot of it’s trade in cash is exposed to this type of loss. It can range from an employee pocketing bills from the till occasionally, through to hard to catch schemes involving overpaying, in cash, a third party for goods or services and sharing the proceeds at a later date.

Wages – Quite common, but often underestimated, staff claiming for hours they haven’t, done or for expenses that shouldn’t be claimed can be a constant drain on a small business. The flip side of this loss is staff that spend big chunks of time at work not actually working.

Stock – Closely related to shop lifting, loss of stock to employees can occur anywhere on your premises, from retail to storage areas. If products are being stolen prior to being entered in your inventory, then it can be difficult to trace, as it will only show up as a difference between what your wholesaler or supplier freights to you and what gets entered into your inventory or stock control systems.

Supplies – It can be as small as paperclips or pens, or as big as computers, furniture, or other business equipment. Although it can be an ongoing problem, the riskiest time for theft of supplies is when an employee has been fired or let go.

Information – Mostly a problem in business other than retail, information theft can include client lists, product info, emails or business planning. With smartphones so common, copying and sharing any kind of information has never been easier.

Preventing staff related losses

Keeping employee theft to a minimum comes down to having the right technology, processes and people in place in your business . While it can seem fairly overwhelming for the average small business, it doesn’t have to be that way.

People – Hiring the best staff is something that most business owners and managers devote a lot of effort to, but the judging the risk of a new employee stealing from you can be tricky to do. Many articles have been written on it, but the basics are all covered in the ‘fraud triangle’, namely a person’s opportunity, motivation and rationale for engaging in theft.

Processes -Most small businesses will probably have the right processes in place already, including cash handling procedures, stocktakes, how refunds are handled etc. The only things you might need to change are how often these processes are undertaken, and rethinking them with emphasis on minimizing staff related retail losses.

Technology – Having the right technology has traditionally been a big hurdle for many small businesses, particularly when it comes to the cost and difficulty of implementing some systems. Recent advances in computing and cloud services has made thing much simpler for small businesses, both in term of reducing costs, and making the setup and use of systems easier.

Business security and CCTV systems are both areas of technology that have changed significantly when it comes to small business users.

Not that long ago, a business really needed a CCTV system to record video from cameras during business hours, and a sensor based security system that they armed when they locked up. However, the cost and complexity tended to put off many smaller business people.

New systems like CleverLoop combine both these functions, along with a range of other features, easy installation and low cost. All this 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

Controlled from a smartphone, CleverLoop with it’s security cameras provides CCTV functionality that is ideal for key areas in your premises. Counters and tills, stock areas, and the main entrance are all sensible places to have a camera catching footage. Referring back to any incidents, is easy, from either your phone or a computer. Not needing to halt recording to view footage is even better.

When you close up your business, you can leave your cameras recording, and arm the CleverLoop alert system. Should anything happen, you and anyone else you choose gets an alert direct to your phones, complete with 10 seconds of HD footage showing you what generated the alert. You make the decision on whether or not to call the police.

Lastly, if there are times when you are away from your business, but still want to be able to check how things are going, you can live-view your cameras from your phone, wherever you are.

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.com.

by Cleverloop Team
March 6, 2017