Dealing with staff theft

Is one of your employees stealing a slice of your profits?

There’s no nice way to put this – your staff could be ripping you off.

Bars, restaurants, cafes and shops are all prime targets for staff pilfering from the till, lifting goods from your shelves or offering ‘very special’ deals to friends and family.

Money is thrown at the problem of customer theft in the shape of CCTV, store detectives and tagging but staff theft is more insidious and much harder to track down. Face it, employees are in the perfect position to steal from your business; they are aware of the weaknesses in your systems and they know who the supervisors and security guards are.

Recent British Retail Consortium figures revealed that stores lost £426 million to staff theft in a year. Meanwhile figures produced by the Centre for Retail Research in 1999 are equally worrying: they estimated that staff-related crime was responsible for a remarkable 50.8% of total store theft. These figures might sound shockingly high, but they could underestimate the scale of the problem. Stealing from within a business is often covered up and the blame placed on customers – after all it’s a brave manager that owns up to making some bad recruitment decisions.

To make matters worse, staff typically steal more than customers and you’re much less likely to recoup the stolen goods or cash. According to 1999 figures from the Centre for Retail Research (CRR), when a shoplifter is stopped they have an average of £45 on them, while the average amount a member of staff steals is a whopping £498.

“The big difference with shoplifters is that 95% of the time you actually get the goods or the property back. With staff theft you only get an average of £35 back,” explains Professor Joshua Barnfield, a firector at the CRR.

And it’s your profit that’s walking out of the door, not turnover. If somebody is taking £10 a day on a turnover of £1,000 that’s only 1% and you might think you can live with that. But if you’re pulling in 6% profit (£60) on that £1,000, then thiefs are taking one sixth of your profits. These losses need to be seen as a percentage of net profit not of gross turnover.

Of course it’s not just retail stores that are at risk, any business that deals largely in cash transactions could fall victim to staff theft.

So what can you do about it? Professor Barnfield advises business people to be realistic: “You’re never going to get rid of the problem, all you can do is weigh the scales a bit more in your favour”.

For tips on how to tip those scales in your direction and how to trap and deal with a staff thief, consult the rest of our employee theft section.

Stealing from within a business is often covered up and the blame placed on customers.

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