We recently published a guide to preventing theft from shops. In that guide, we focused on addressing theft from shoplifters. In this post, we will take a closer look at employee theft – why it happens, and how to prevent it.
Understanding the Impact of Employee Theft in Retail
According to research by Retail Economics and Thruvision, employee theft accounts for around 40% of all thefts experienced by UK retailers, which could account for a loss of about £3.2 billion a year.
But employee theft will have some added costs beyond the financial losses. It can affect morale, and lead to a culture of mistrust and suspicion among staff. It can lead to disciplinary actions and legal procedures, which will disrupt your operations, while increasing staff turnover and recruitment costs.
Plus, if word gets out that your business is having a problem with employee theft, then it could damage your reputation. After all, if you cannot keep your own stock safe, then who knows what else you are overlooking? This could affect your ability to attract suppliers, and it may even make some customers reluctant to buy from you.
Common Causes of Employee Theft
Why would an employee steal from their employer? For any number of reasons, including:
- Financial Hardships – If an employee is struggling outside of work, they may be tempted to steal from the till, the shop floor, or the stockroom, to help make ends meet.
- Resentment – If your employees are not happy in their jobs, or if there are poor relationships between staff and management, then employees may turn to theft as an act of protest.
- Opportunism – Sometimes, the opportunity to steal might just be too great to resist. If an employee is handling a large amount of cash, and they notice that there is nobody around, then they might think: “Who’s going to miss the odd note or two?”
- External Pressure – If you do not address employee theft in your shop, a negative workplace culture could take hold, and some employees may find themselves driven to theft as a result of peer pressure. Or worse, employees might get pressured by outside forces, such as criminals, to lift cash or stock from the premises.
How To Prevent Employee Theft in Your Shop
There are a number of actions you can take to help prevent theft in your shop including:
- Employee Screening – Conduct thorough background checks on all of your new hires, particularly if their role will involve handling cash, or if it will give them access to high value stock.
- Employee Training – During induction, make it clear to staff that you take a zero tolerance approach to theft, but be sure to explain why, highlighting how employee theft harms everyone.
- Security Measures – All of the systems that can help prevent shoplifting can also help prevent employee theft: CCTV, thorough stock management procedures, mirrors to eliminate blindspots, security tagging, and so on. You should also implement strict controls on who can handle cash, with robust security procedures for doing so.
- Anonymous Reporting – If a staff spots another employee stealing stock or money, they may be reluctant to report the incident, as they might be wary of reprisals. But if you allow for anonymous reporting systems, staff can report incidents in total peace of mind that they will not face any direct retaliation.
- Staff Support – Finally, we mentioned above how unhappy or dissatisfied staff may turn to theft. With regular performance reviews, you can identify any possible sources of discontentment as early as possible, while also helping to build trust between managers and employees.
Get The Right Cover For Your Shop
A comprehensive retail insurance policy will not prevent employee theft. But it can give you the cover you need to bounce back from any major disruptions or significant losses.
James Hallam is an independent Lloyd’s broker with a dedicated team of experienced insurance professionals who care about protecting your shop. Whether you run an online store, a single high street shop, or a chain of shops, we can help you get the cover you need at a price you can afford.
Find out how we can help your shop today.