A Current Affair ran a story about employee theft in a Queensland newsagency this week claiming the owner lost the Nextra Caloundra business as a result of theft of $36,000 over two years.
The reports indicating theft used in the ACA report are from the newsagency software from Tower Systems, the software company I own. When theft was suspected the COO of the company undertook a free theft check at the request of the owner of the newsagency and provided the evidence subsequently used by the police.
The ACA story frustrates me for a new reasons.
- Long term employee theft is avoidable. The newsagent and the majority in Australia have access to evidence of possible employee fraud. Detecting it is easy yet most newsagents think it will not happen to them – not matter how many times they are told it could easily happen to them. Had this newsagent followed the advice provided to them by Tower through contistent communication on theft they could have detected it after the week it began.
- Did $36,000 stole over two years really kill the business? I struggle to accept this as it is not a large sum of money. Further, for it to be the reason of the loss of the business the loss of the cash should have been discovered sooner. I’d more readily accept that the experience caused the owner to get out as the psychological impact of this type of theft is considerable.
- The report says the employee did not receive a pay rise for most of the time they worked in the business. If this is true it is illegal. The ACA report did not adequately address this as in doing so left questions about the quality of the reporting.
In all my work with newsagents: individually helping businesses, through this blog, with Tower Systems and with newsXpress, theft is a common topic. Theft in a newsagency by an employee ought to surprise no newsagent I am in contact with. yet it does … because too many newsagents choose to ignore it. This is why I wonder: Who is to blame for long-term employee theft in a newsagency?
In this case from ACA, I think the newsagent is to blame for the extent of the theft. Their management approach allowed the theft to go on far longer than should have been the case.
We, each of us, need to own our own situation. This is why the newsagent in the story ought to say they are to blame for how long this went on and the cost to the business. Taking such a stand would be more helpful to small business retailers seeing the story.
One of the worst cases of employee theft I saw was in a newsagency where an employee stole more than $250,000 in case over almost three years. The theft went on almost a year longer than it should as the newsagent said my advice they were being stolen from could not be right as it could only be one person and they would never steal from the business. Almost a year later they realised they were stupid to make such an assumption and ignore the evidence they were provided.
Yes, this stuff frustrates me because all the advice, all the training, all the warnings are too often ignored … and then when it happens, the their is the only person responsible.
newsXpress offers its member newsagents training and resources for confronting employee theft. I hope this is something all the newsagency marketing groups do. One of the theft mitigation resources from newsXpress is documented advice accompanying a store Theft Policy document.
As a courtesy to all newsagents, click here to download a copy of the latest version of the newsXpress theft advice that was first published years ago. This advice is part of a set of more than 100 business management advice documents provided to newsXpress members as part of their management assistance and training. I mention this to reflect that the approach to employee theft is part of a whole of business approach.
A few months ago I tried to take a different approach to warn about theft. In the studio at Tower Systems I and the video production team created this video. I share it here in the hope it makes a point:
Why do you seem to be saying the Newsagent is at fault here? I know if I lost $36,000 I would go out of business too. Most of us smaller business are flat our doing the job of more than one person as we cannot afford the number of staff we would like. How many hours can we put in spot stocktakes etc. ? We just have to trust but be wary. I let my staff know I check the security system from time to time to check on shop lifters but actually I am wanting them to get the message I am watching.
Carol it should not take two years to discover the theft. This is why I say the newsagent is to blame for the extent of the situation.
Unfortunately we inherited a light fingered staff member 5 years ago when we purchased our newsagency. There were poor quality cameras around the shop but none were put over the counter(that was soon rectified).
With no background in newsagencies it took a few months learning the ropes and during that time we had sales data continually showing a shortage. All stock sold was manually entered by key into categories and no stock in the shop scanned.
We had to isolate employees to find out who it was, and without concrete proof just had to reduce hours until they left.
I believe we lost around $10,000 in 10 months, but that equates to counter sales of around $30,000 to pay for the theft.
In the case here it would be the profit from well over $100,000 of sales, a lot for a business to carry.
Good actions Peter. Too many newsagents do not take the time to know if theft is happening and when it is discovered they accept no responsibility.
If you want a laugh read the blog post from POS Solutions. They say this type of theft cannot occur in their software. They in the same article they say how there is theft in businesses using their software.
POS do not know how this theft was done at Nextra Caloundra. Had the owner followed recommended processes, the theft would have been caught early.
Don’t be tricked by what Bernard from POS says – not that the post could trick you as it’s nonsensical in my view:
Please check this out, it was shown on A Current Affair of an employee who was trusted and considered part of the family by the owners.
http://www.9news.com.au/national/2016/02/09/19/48/queensland-newsagency-employee-stole-36000-over-two-years
She then used her insider’s knowledge of shop security measures to steal. She is not sorry for what she did. I am certain she thinks the owners were fools to trust her.
If you are wondering can this particular problem occur in our point of sale system, the answer is NO.
Clearly it shows some bad software designing that such a situation could even occur but also what it clearly shows is the danger that can occur in a business when people have access to high level security passwords. She would not have been able to do this without such access.
Passwords should be changed regularly and kept secret.
Next question you may have is that its an exceptional case, well not in my experience. Nor is it, particularly big. In November, one of our clients reported to me that almost $200,000 went missing. In NSW, one of our senior staff Garth there, reports that he regularly get reported in the $100,000 range.
Nor do I see despite what some feel that people are particularly good at picking these dishonest employees from what I see they come in all different shapes, sizes, ages, sexes, ethnic backgrounds, religions, levels of education and economic status even blood relatives do it.
I recently saw a video of a shop keeper in tears confronting her best friend since early school when she discovered that she had been stealing from her. Apparently, they even had gone on a holiday together.
If there is any lesson here, it is please make sure you follow correct procedures and there are sound reasons for these procedures.
Any comments, I am happy to hear them.
Kind Regards
Bernard
I’ll one up all of you with a small part of my life story. Worked with the old man in a recycling yard he’d purchased in SA.
The one worker we inherited was light fingered. The previous owner’s told us that, even his previous employer told the old man that, whom they’d sacked for theft.
So when Mr Lightfingers returns with the cash register trays, they were all empty of notes, just coinage left, each time. Happened each weekend. When I worked that shift I always had notes left. His previous employer visited Dad and said he’s turning up to his old workplace(a drive thru bottle shop) showing off a wallet full of notes.
The local CIB even offered to ‘mark’ all the notes! Nup, offer not taken up. I quit after 9 months. It was hard enough seeing your inheritance ending up with an idiot. The worst part was a having a father who, decided to look the other way.
Bernard Zimmermann from POS has published a comment from a ‘mark’ (a made up name I am guessing as there is no transparency about who wrote the comment. Since Bernard allowed it to be published he is the publisher of the comment. Anyway the comment claims Tower is sending out an update because of theft. This is untrue. No foundation whatsoever – and Bernard knows it.
FYI here is a link to an email I sent to newsagents about this: http://eepurl.com/bQqbRH
It was almost as though he was big noting that his customers loose more .
Nor is it, particularly big. In November, one of our clients reported to me that almost $200,000 went missing.
Bernard is his own worst enemy, again.
Here is the comment that I posted that has so far been blocked. Click on then image for a large version:
I think you’ll find there’s 1 person responsible for the theft and that’s the thief. There’s also someone responsible for it going unnoticed for an extended period and that’s the owner.
Any decent POS system would give you the tool’s to discover theft, but if you don’t go looking for it you wont find it.
She was only working for them until she could get a job in the police force, she wanted to become a policeman.
Maybe she needed the money for a sex change 🙂
And Steve that is my point. had the owner of the business used the tools at their disposal, they could have discovered this theft a few days in and not two years later as happened.
It is unfortunate Zimmermann from POS Solutions has published false and misleading information.