I feel like an idiot. For years I have helped newsagents deal with employee and customer theft. I have spoken at regional newsagent meetings about this, I have helped police gather and understand evidence in several states, I have sworn affidavits as an expert witness, I have helped insurance companies verify claims. I have even published guidelines for newsagents on how to cut the cost of theft.
If only I had followed my own advice.
On Monday this week we discovered an employee theft situation at one of the stores with which I am involved. We discovered it when hunting down a discrepancy from Sunday’s numbers. Our Point of Sale software Audit Log provided excellent evidence indicating criminal behaviour. Our linked camera system provided the visual proof we needed.
The rest of Monday and Tuesday were spent researching how long this had been going on for. We were shocked – and this is when I began to feel like an idiot. The evidence indicated that upwards of $20,000 had been stolen.
Following discussions with the police and our insurance company I approached the person involved. Within two hours we were paid $12,000 as settlement of the matter.
While we may have got more by pursuing it through the police, the costs to us would have been considerably higher, it would have taken longer to get paid and there would have been a knock-on impact on our insurance policy. There was also a risk that we would get far less.
Having worked with police previously, I knew there would be a challenge on what they would consider admissible evidence. The recent camera footage and companion data from the computer system is good. While this establishes a pattern of behaviour, it is a challenge to get a court to accept that this was going on months or years before to determine the quantum of the theft.
The best way to cut the cost of employee theft is to:
- Regularly review your audit log – if you have the Tower Systems software. I’ll not go into details here for obvious reasons.
- Twice a month select random shifts and carefully review sales counter staff behaviour.
- Review your processes and eliminate any opportunity to adjust anything which affects cash in your computer system.
- Be wary of employees who are over eager to work.
- Once a month, unannounced, run a spot cash balance.
- Consider blocking access to facilities which could facilitate theft.
I am embarrassed that this happened in one of my businesses. Hopefully, I have learned a lesson. There is no doubt that I am less trusting now.
Anyone who wants to know how the theft was done is welcome to call me on 0418 321 338 or email me at mark@towersystems.com.au for details. I have a document with practcial suggestions on how to determine whether employee theft is a problem in your business.
Newsagency employees reading this post who are stealing from their employer, resign because you will ultimately be caught.
Footnote: before anyone says that they have a computer system which blocks many types of employee theft, ours does too. My view is that is someone is desperate to steal from you they will avoid the technology and find another way. By not erecting all of the barriers I could have in this business, it was easier for me to gather evidence and, ultimately, fix the problem.
I am happy to talk to any newsagent about what happened and how we discovered it. The more we share this information the better.
Mark,
According to NRF’s sixth annual Organised Retail Crime survey, 89.5 percent of retailers surveyed say their company has been a victim of ORC within the past 12 months.
Australia would be similar.
Hopefully the team members who are in the process of completing the unit on Security at the newsXpress Retail Academy will make a difference in their agencies 😉
Mark thank you for your honesty. Once again you are discussing issues which are relevant to all of us. Me, I lost $10,000 in three months before I realised what was happening. The staff member involved came to me from another newsagent nearby. He didn’t even know she was stealing from him. Ignorance is bliss
I has something similar occur a number of years ago…I initially captured video evidence of one incident after suspicions were raised. I then hired an investigator, taped a number of additional theft incidences to demonstrate it was repeat behaviour as opposed to a “one off”, and utilised the investigator to conduct interviews and manage the process to eventually recover all till discrepancies for the period of their employment. This was about $10,000 and was a much better result that achieving a criminal conviction against the employee in question and I think was more of a penalty to them personally.
In hiring a 3rd party investigator it also removed myself from direct involvement with the individual, gave formality and independence to the review…and I was very pleased with the result and great service….It was just a shame that such a circumstance arose, because in employing staff we offer more than wages in giving them our trust and confidence…Even though I subscribe to the theory that anyone can succumb to temptation, and I thought I had minimised such temptations, there will always be some level of temptation to some people…we just have to be wary of discrepancy and trends..Staff movement and till discrepancy can quickly isolate and identify individuals, as distasteful as the recognition that such things should occur. It also lets down the reputation of the majority of great staff you have working with you, of whom you hold in great regard and admiration…Despite this experience we embrace all our staff with trust, confidence and friendship….we just watch our reporting and are mindful of disconcerting trends.
I am a retailer from another field and found this blog tonight while researching employee theft. What a resource. Great tips. Thank you. This theft is a cancer on all our shops. It is much worse today than last year. I just caught a long time employee stealing stock. Like you Mark I had become too trusting.
All the best.
PS I like newsagents.
Mark, I am a manager of a bottle shop that incorporates a similar system to what you have described here. I have good evidence of employee theft but noticed your comments regarding such evidence and the police. Camera footage (although not of any theft) of a ‘no sale’ + companion data indicating ‘no sale’ – however there is no evidence of cash discrepancies; how conclusive is this for the police investigation? did the police indicate you needed to have better/more evidence?
Cheers
It all depends on the requirements of your local police. They will want to see the money shot – i.e. your cash making the pocket of the employee for no valid reason. If they can see this happen several times them they can move. Some police will want to use their camera systems. Others will want to create a sting. Talk to your local station, let them know what you have and be guided by their advice.
In your case, the cost will be found when you do a stocktake.