theft

The harm to a retail business from employee theft can be far reaching, debilitating the business and those who work in it. The keys for moving on from the crime, because you must move on so the business has a future, starts with confronting the situation.

Too often I find newsagents who do not confront the situation. Too often they are angry, hit out in anger but do not deal with the matter such that it is resolved and they free themselves to move on.

Through my newsagency software company I have been engaged in helping newsagents deal with employee theft for many years. The practical advice I offer here on handling a discovered situation of employee theft is based on that work.

The goal is to offer straightforward steps to help you get through as it is on the other side of this where you can find the opportunity to move on from the feeling of violation that often accompanies employee theft in small business.

1. Be sure of the facts, gather the evidence. Evidence could include, video footage of cash being take from the business, business records being modified to cover tracks, stock being stolen and more. Evidence does not include gossip, feelings and opinions. Without evidence you have nothing to proceed with.
2. Once you have all available evidence and if this clearly implicates one or more employee, quickly work out what you want.
   1. If you involve the police, they and, subsequently, the courts, will control the process including getting your money or goods back, an apology and more.
   2. If you don’t involve them, think about if you want the money or goods back, an apology, the person to stop working for you without negative impact on you – or a mixture of these.
   3. Check your insurance policy. Be sure you understand what you might be able to claim and in what circumstances. For example, your policy may require a police report. This could determine your next steps. If you are not sure what your insurance policy says, call the insurance company for advice. Knowing your insurance situation early is vital.
3. If the person committing the crime is a minor:
   1. Advise their parents or guardian by phone. Invite them to the shop or an independent location to see what you have. Have someone else there with you, as an observer. This meeting needs to happen quickly.
   2. Present the evidence.
   3. Listen for their response.
   4. If they (their parents) ask what you want, be clear.
   5. If agreement is reached, put it in writing there and then and all involved sign it, so there is clear understanding.
   6. If agreement is not reached you need to decide your next steps and engage them with haste.
   7. A return of the money, likely by the parents, should be in a lump sum, immediately. I have seen a parent pay $22,000 where a uni student studying psychology stole and out their career at risk by being caught. I have seen another situation where a 75-year-old mum repaid the $12,000 stolen by her adult daughter so the daughter did not have to tell her husband about her gambling problem.
4. If the person committing the crime is not a minor:
   1. Get an opportunity to speak with them face to face, ideally with another person there as a witness.
   2. Tell them you have evidence of them stealing from the business.
   3. Ask if they would like to see it. If they say no, ask what they propose.
   4. If they do want to see the evidence, show it and ask what they propose.
   5. If there is an offer of a full refund, an immediate resignation and never entering the business again it could be a good practical outcome. The challenge is you may not know the value of what has been stolen. Experience indicates that someone stealing cash will understate the amount considerably. I was involved in one case where they said they stole $10,000. The irrefutable evidence showed it was $75,000.
   6. Get any agreement in writing. If there is an offer to repay, our advice is to only accept an immediate lump sum. If the proposal is payment of, say, more than $10,000 over time, involve the police.
   7. If the person denies any wrongdoing, go to the police immediately.
5. If you have suspicions and do not have the evidence, put in place opportunities to gather the evidence without entrapping the target, without setting them up. I have seen situations where local police have provided advice and support for this. It could be worth asking them if you are in a regional or rural situation.

If you are nervous about meeting the person or their family, write down what you plan to say. Keep it short. To the facts. No emotion. Having a script prepared can be useful even if you do not read it.

If there is any risk of violence, do not have a meeting. Go straight to the police.

Time is of the essence here. The longer you know about the situation and the longer you do not act the less useful the outcome is likely to be.

If you are not sure what to do, contact me. I will help in any way I can.

I am not law enforcement, a lawyer or an investigator. The advice here is based on my own experiences in my retail shops and my work with other retailers.

A newsagents who recently discovered employee theft in their business discovered the person stealing cash was also stealing instant scratch tickets. They put ticket cash being out of balance to a lotteries reporting problem. Any time numbers don’t balance, be suspicious and get to the bottom on it.

A newsagent colleague recently was stolen from by an employee. The cost to the business was $2,500. The person’s story at the interview was they had been out of the workforce for a year taking time off. However, given their age and health the story did not make sense. But it was not questioned. The reality is they were working in another newsagency for much of the year and were intimately sacked because of theft. They paid money back and left without prosecution. They found a new job in a newsagency an hour from the old job and the new boss eventually discovered their dishonesty.

If there is a gap in a resume, pursue it, ask questions. If you are not sure, don’t hire them.

There are people who like working in newsagencies because of the family aspect and the last of strict controls managing cash. This can provide a window long enough for them to steal, as they did in the latest case, thousands of dollars.

Employee theft costs between three and five times more than shopper theft yet small business retailers obsess about shopper they and tend to ignore employee theft – until it hurst them.

Theft is a cost of doing business in retail. Don’t let theft divert your attention from the bigger picture. Don’t let it get you putting up signs that turn customers off. Don’t let it get you hiding stock from customers.

I see too many retailers obsessing about theft to a point where their obsession costs the business more than the theft they are trying to avoid.

A simple sign like this placed near popular products could be the difference between someone looking and stealing. The sign is a reminder of the surveillance in the business. While there are other ways to show pop;le they are being watched, a small sign like this can week too. It costs less than, for example, screen monitors placed in-store. Costing a few minutes to make and a few cents to print, the sign is good value for money. This is why it is my management tip today.

It is tiresome talking with a newsagents, or any retailer for that matter, where theft has occurred and only recently been discovered, and where the business has few or no rules around the processing of cash at the end of the shift.

I say tiresome because my advice has not changed in years. It is advice I have shared here before and elsewhere. It is also basic business management advice.

Retailers who are sloppy with cash management and end of shift reconciliation are more likely mohave employee theft in their business that is undetected for longer.

Using your computer system and taking a structured rule-based approach to end of shift processing means you are more likely to detect theft sooner. You also provide fewer opportunities for theft to occur, because of the structured checks and balances.

Balancing the register is easy if you and your employees are disciplined in how they transact business the=rough the day and to the end of the day. Get this right and the cost of theft in your business will be less.

Checks and balances on cash, inventory and other business assets is as important between partners as it is with employees. Too often I see theft occurring in newsagencies and other small retail businesses where a partner has stolen from the business.

Theft by a partner in the business is usually done in the same way and for the same reasons as that by employees.

Managing theft by a partner, stopping it, is done by having good management practices in place for cash, inventory and assets and applying the rules and requirements against everyone working in the business. Core in the management practices are checks and balances along with transparency at every step.

Discovering theft is often too late for any effective recovery for the business.

When was the last time you looked at video captured by your security cameras? Most time I see retailers do this it is to look for something specific. My tip today is to look without a specific goal. Play it on fast forward and be open to learning things about your business that you have missed.

Every time I do this with retailers we see things they did not expect. It could be employee behavior, shopper behavior or a realisation about hot-sports in the business.

A half hour fast forwarding through vision can be enlightening.

One part of my work with newsagents if dislike is dealing with employee theft situations. Too often a newsagent has come to me after they have discovered theft, having ignored advice on how to protect against this.

Last week we shot this video at the office to try and grab attention in a different way. Please watch it. The sole goal of the video is to get newsagents and other retailers engaged to manage against theft.