Nov 03, 2016

3 Ways Retailers Can Ward Off Employee Theft

Retailers want to trust their workers, but employee theft remains an ongoing dilemma. According to the U.S. Chamber of Commerce, 75 percent of employees have stolen from their workplace, and most are repeat offenders.

To make matters worse, workers are sneaking more than just a couple of dollars from the register. In the U.S., employee theft accounts for 43 percent of lost retail revenue. This adds up to about $18 billion each year, which is $2.3 billion less than the cost of customer shoplifting. 

Rather than sneaking merchandise out the back door, employees are apt to steal in subtler ways. These methods include manipulating sales during checkout by entering false coupons, discounts or returns and pocketing the cash. While theft can sometimes be tracked through daily sales audits and random register counts, these solutions don’t effectively address the root of the issue.

Here are three underlying reasons retail employees steal, as well as how employee engagement initiatives can help managers prevent them:

1. Lack of supervision: One surface-level cause of internal theft is lack of oversight. Retail managers are busy juggling tasks like scheduling, inventory and hiring, so they often don’t have time to spend face-to-face with their team.

Solution: Increase time on the sales floor.

Managers shouldn’t micromanage their cashiers, but they should spend more time near the register. Doing this on a more regular basis will not only improve surveillance, but also increase communication. To make time for this, managers can streamline administrative tasks like scheduling to employee engagement platforms, which allow workers to input their own schedules and give managers time to spend with associates.

2. Workplace dissatisfaction: When an employee feels overworked or underpaid, they may feel entitled to pocket some extra cash from the register. Controversial practices like on-call and just-in-time scheduling can aggravate these feelings. In addition, if a worker doesn’t get along with their boss or feels that his or her voice isn’t being heard, stealing may be an act of subtle retaliation.

Solution: Listen to workers’ opinions and scheduling needs.

Use a scheduling application to let employees enter their own availability and switch shifts with co-workers. This enhances their work-life balance and demonstrates that their employer is listening to their needs and respects their well-being. Also, motivating employees to share their opinions through employee engagement platforms can help make them feel like a larger part of the company, encouraging them to be honest with their employer.

3. Turnover and seasonality: High turnover rates in retail set the stage for theft. Seasonal workers may see no long-term involvement or upward mobility with the company. Furthermore, increased transactions during the holiday season provide more opportunities to fudge numbers when ringing up sales. When workers realize they’ll be no longer with the company in a few weeks, they may not fear the repercussions of getting caught. 

Solution: Provide rewards and recognition to boost loyalty.

Because seasonal workers are around for such a short time, managers may not see a reason to build solid relationships with these employees. However, simply increasing the employer-employee connection can help cultivate honesty and brand allegiance. To do so, employers should schedule regular face-to-face check-ins with seasonal employees to track their progress. If applicable, managers should also be transparent with workers about long-term opportunities, such as allowing them to return next year or bringing them on full time.

No manager wants to accuse workers of the five-finger discount, but loss prevention is a core concern in the retail space. To help eliminate employee theft for good, retail managers should look past short-term solutions and ask themselves why their workers are stealing in the first place. By addressing these reasons through employee engagement, managers not only protect their bottom line, but also build a stronger, more unified team.

Steven Kramer / Total Retail

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