Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Advice on reducing the cost of employee theft in retail

Mark Fletcher
August 6th, 2018 · 1 Comment

Theft is something to be managed in any retail business. Retailers are  stolen from by employees. Good management is about reducing the opportunity for and instances of theft.

Follow this revised and refreshed advice and the opportunity for theft will be lower and the certainty of detecting it higher.

  1. Value employees. Experts say this is the top step to take.
  2. Share information. Often, theft can be driven by a misconception about the profitability of the business. Sharing accurate business performance data can educate against theft.
  3. Do your end of shift through your software and have a zero-tolerance policy on being over or under. Reconcile banking to your computer software end of shift. One business where this was not done was being skimmed regularly for $200 a day.
  4. Change your roster. Sometimes people work together to steal. One retailer found a family friend senior and their teenage daughter stealing consistently.
  5. Check GP by department. If GP is falling outside what you expect, research it further.
  6. Demand the cash drawer be closed after every sale. A drawer left open is an opportunity.
  7. Keep the counter clean. A better organised counter reduces the opportunity for theft as it makes detection easier.
  8. Have a no employee bags at the counter policy. This makes it harder for them to hide your cash.
  9. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
  10. Beware of calculators with memories at the counter. One retail business employee used the memory function to track how much cash had to be stolen prior to balancing for the day – cash from sales not rung up.
  11. If you sell tobacco products, use stock control. Enter new stock as it comes in, scan all sales and only reorder based on what you software says. Every month do a stock take. Popular daily items such as tobacco stock discrepancies are an indicator of theft. Had one retailer we work with been doing this they would have caught their $250 a day employee theft months earlier.
  12. Scan everything you sell. Do not use department keys as this makes it easier for employees to steal since they know there is no trackback to stock on hand. Using department keys is an invitation to steal.
  13. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that lead to discovery of systematic theft.
  14. Check your Audit Log. Look at cancelled sales, deleted sales and items deleted from a sale. Leaving a cash drawer open from the previous sale, scanning items, taking the cash and cancelling the sale is the most common process used by employees to accrue cash they then take from you. Good software tracks cancelled sales and what was in them. This can be matched with video footage.
  15. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
  16. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
  17. Be professional in your management of the business. The more professional your approach they less likely your employees will steal as they will see the risk of being caught as high.
  18. Advise all job applicants that you will require their permission for a police check. From the outset this indicates that you take your business seriously. In many situations applicants who have been asked for permission to do a police check advise they have found a job elsewhere.
  19. Do not take cash out for your own use in front of employees. If they see you take cash for a coffee or lunch some will see this as an invitation.

These steps work – based on decades of helping small business retailers to reduce and manage employee theft.

Theft, employee and customer, costs a typical small / independent retail between 3% and 5% of product sales revenue.  Management attention can cut this dramatically.  It does not take much time. No, it is more about having professional processes in place which everyone in the business follows.


Category: Ethics · Newsagency management · theft

1 response so far ↓

  • 1 Colin // Aug 6, 2018 at 8:40 AM

    20. Password protect function to change stock quantity.

    21. Review security cameras. Are they purely customer facing.


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