Tips for Preventing Employee Theft in Retail

Posted by Pekin Insurance on Jul 18, 2016

Find out how preventing employee theft is easier and less expensive than you think, and if you do it right, you'll be rewarded with more loyal employees. 


It's the end of the month. You're reviewing your sales and expenses and notice it yet again. Inventory is clearly missing. In fact, it's gotten progressively worse. You can tackle the problem in several ways: take more care of your inventory, prevent shoplifting, or work on preventing employee theft. 

Shoplifting, employee theft, and inventory mistakes are common problems in the retail industry. Inventory mistakes are the easiest to correct. Check that all of your orders come in correctly, that items are priced and rung out correctly, and that you receive proper credit for broken or missing deliveries. 

Shoplifting and employee theft are tougher to cut down. You can spend time and money hiring security guards, installing cameras, and adding anti-theft tags to your inventory. You can also approach loss prevention in ways that won't break the bank. 

Preventing employee theft requires a different path than reducing shoplifting. You don't know the customers who come into your place of business. You're right there with your employees, though. You know them, talk to them on a regular basis, and work beside them. 

Most employees are honest and hard-working. The steps you take to reduce employee theft will help those honest employees, too. Plus, it's easier to prevent theft than trying to catch someone in the act. 

Preventing employee theft before it begins

The single best way to handle employee theft is to stop it before it starts. It's a very simple concept, too. Human nature dictates that we tend to respect and appreciate people who respect and appreciate us. This is a powerful motivator you can use anytime, and it won't cost you a dime.

Treat your employees like your most important customer. This won't just help prevent theft. Your employees will work harder and with more loyalty when they know you care about them. 

Preventing the opportunity for employee theft

No matter how well you treat your team, there will always be the occasional employee who can't resist temptation. Do your best to limit the opportunities to steal. Don't allow your team to share a register. Have two people count the cash at the end of the day. Require management authorization for refunds and exchanges. Take any steps you can to limit the opportunity for theft. 

Preventing employee theft through inventory control

Modern POS systems are relatively inexpensive and can do wonders for your inventory control. These systems make it easy to track missing items, cash discrepancies, hourly sales, sales comparisons, and average sales per person. A capable POS system makes it easy to keep a tight control on your inventory and spot fraud. 

Talk to your employees about theft

Take a few minutes at your next staff meeting to discuss theft. Don't imply that shrinkage is employee-related, and certainly don't accuse anyone of theft. Simply discussing the problem and asking for help or ideas alerts dishonest employees that you are aware of the issue. Refer people to your employee manual if necessary. 

Preventing employee theft through design

Retail theft, both employee theft and shoplifting, is rarely planned. It happens because the opportunity is there. Keep your store design open and well-lit to reduce overall theft. The same goes for storage and inventory space. The more open and visible you keep these spaces, the less opportunity there is for theft. 

Preventing employee theft through wages

Retail jobs are tough on staff: employees stand most of the day they interact with people continually as a representative of the business, and they have customers who complain and take frustrations out on them. Retail may not be the most physically or mentally challenging job, but it is hard work. 

When you want your team to represent your business and you want them to be honest and work hard, pay them accordingly. Simply put, better pay equals better employee morale, work ethic, and employee retention

Another way you can help prevent employee theft is by offering your staff insurance. Employees who are taken care of are more likely to take care of your business in return. Take care of all your business insurance and employee health benefits needs in one place with Pekin Insurance.

We'd love to hear your thoughts. Let us know in the comments what you would add to this. 


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