The latest retail crime statistics are out and they don’t make for happy reading.
According to the 2012 – 2013 Global Retail Theft Barometer, shoplifting, employee and supplier fraud, organised retail crime, and admin errors cost UK retailers and supermarkets £3.4 billion. That’s 1.2% of their sales.
The biggest problem is shoplifting at 36% of losses. Worryingly, theft by employees isn’t far behind. Staff theft accounted for 33% or £1.1 billion of the overall loss to retailers last year.
But before these figures are enough to make retailers shut up shop forever, we’ve put together our top ten for cutting the incidence of staff theft.
1) Create a positive working environment
Employee satisfaction is the best way to establish trust and loyalty within the team, so communicate regularly with your team, treat everyone fairly, reward good performance as well as addressing underperformance, and lead by example.
2) Set the tone
Take a zero tolerance approach to theft and communicate this. It’s not uncommon for people who defraud their employers to justify their actions as payment for extra time worked, a perk, or by rationalising that the company has a margin for losses.
Ensure your employment terms and conditions include a written policy which explains what constitutes fraud. That way there is no room for misunderstanding or rationalisation.
3) Establish an anti fraud culture
While the policy should become part of the induction process for new recruits, it should also be discussed as a team with everyone suggesting how fraud can be tackled. Involving the team will help establish an anti fraud culture, again making it harder for dishonest individuals to rationalise their actions.
4) Cover the basics
Provide uniforms which do not contain pockets and have a secure place for the team to leave their possessions, away from the stock and the shop floor.
5) Use your point of sale technology
With modern technology it’s much easier to keep track of every aspect of the business, so ensure there are rigorous systems in place and monitor them. For example, use your POS software to track the rate of items returned to the store. If it’s on the increase, check the number of overrides and non-receipted returns performed by each employee. This enables you to monitor when an employee is taking an unusual number of returns.
6) Make regular checks
Often random checks of outer clothing and bags can be enough to put some people off attempting to steal. Just don’t fall foul of the law. The agreement and understanding as laid down in a contract of employment or staff handbook is all that is required for you to carry out such checks.
Ensure another colleague is present at the cash desk when refunds are given or when items are being purchased by a friend or family member. This will hopefully put an end to ‘sweethearting’ – the activity of giving away goods to friends and family at till points.
8) Overt surveillance
Overt CCTV in full view of staff and customers is perfectly acceptable as long as employees and customers are made fully aware CCTV is present in the store. Cameras can be positioned anywhere in staff only and public areas, such as near or above the cash register, in the back office and stock room.
9) Bring in the professionals
The value and nature of the loss will dictate the method of professional investigation. It can range from interviewing staff, covert cameras and the use of smart water; an invisible and fluorescent mist sprayed onto items such as bank notes and only detectable under UV light.
10) Hire honest staff from the outset
There are a range of options available to help combat employee theft but none as powerful or cost effective as avoiding recruiting dishonest staff in the first place.
When hiring, scrutinise candidate information; confirming academic qualifications and the existence of previous employers, verifying length of service, reasons for leaving, and following up references.
Ask your shortlisted candidates to undertake the IntegriTool interview, which screens for honesty and integrity. Used before interview stage, it asks a series of multiple-choice questions which have to be answered within a certain time-frame. The questions relate to ethical matters, such as theft, substance abuse and moral dilemma. Once completed, a report is immediately available to the employer highlighting particular aspects of a candidate’s work-based behaviour and attitudes which may benefit from further scrutiny during the interview process.
Employee theft in the retail sector not only accounts for the second highest losses to the UK high street, according to the British Retail Consortium the average cost of each offence is approximately more than fourteen times that committed by a customer.
Using all available and proportionate tools to stamp out employee theft can only help to make that job a little easier.
For more information please contact us by using the contact form.