Employee Theft Hurts Sales Profits

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Keeping your store and profits protected from potential shoplifters is important, but sometimes theft is where you least expect it. Any time there is a loss of merchandise through theft, it affects not only your profits but also potential sales. When you have a loss through stealing, you lose items to sell and may even have to raise the prices of your remaining inventory to cover the loss. Here are some suggestions to tighten up your security.

 

Shrinkage in the Back

 

Securing the operational front part of your store is an excellent idea, but don’t forget about the shipping and receiving area. In the receiving area, make it a rule that all doors are to be shut except during deliveries. If that isn’t possible, at least have a mesh gate to pull across the delivery opening and have it alarmed or padlocked. Also do not allow merchandise onto the selling floor until it has been checked in and marked received. Every once in a while, do a surprise box count or pallet check to verify delivery and content. Have signs stating no delivery driver is permitted beyond the receiving area. Lastly, keep the back shipping area clean and neat so management can observe irregularities that may occur.

 

Employee Theft

 

Although the thought of dealing with employees stealing from you is something that might make you uncomfortable, it's a thought worth examining. Thieving employees can be creative. For exmaple, cashiers may ring up some items while ignoring others in order to help their friends sneak away with some freebies. Also be aware if there are too many over ring slips, which cashiers can use to cover up shortages. A cashier can also cause shortages that are really thefts by recording transactions wrongly, forging receipts and by the misuse of the register. A store manager can also alter a report, thus showing that less merchandise was received than actually was. He or she could then take the unreported merchandise and illegally sell it to another person.

 

Some ways to prevent theft are to limit the number of employees authorized to ring up other employees sales; require management to authorize any employee purchases; don’t allow employees to browse behind counters or to be in departments where they don’t sell; and always limit the number of NO SALE rings by defining under what conditions that key can be used.

 

Helpful Procedures

 

To help keep in-store theft low you can implement preventive procedures such as controlling pricing procedures and by permitting only authorized employees to do markdowns. Keep unused aisles closed. Have all your employees enter and leave through a door that is designated for employees only. Last of all, always have at least two employees opening and closing the store together.

 

There will always be theft; this is just a fact of life. However, if precautions are taken and enforced, then your loss can be cut considerably. No suggestions will eliminate all theft, but they can reduce stealing and keep a big chunk from being taken from your profits.

 

Photo courtesy of David Castillo Dominici / www.freedigitalphotos.net

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  • Jeff Ruzicka
    Jeff Ruzicka
    Thanks George.  I worked in a restaurant where they discontinued employee meals because people were ordering pizzas to take home to feed the family.  It is a problem.
  • george m
    george m
    you are right employee theft can be a big problem .

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