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Retail Theft Prevention – Internal Theft Part 1

June 22, 2009

Here are a couple more tips to help protect your profits. Like all other tips/suggestions I’ve provided, these are to be considered “basics”, to be utilized with a specific regimen of policies and procedures that work best with your particular store/situation.

Internal theft is the largest source of shrink for retailers in North America, representing 46.3% of all losses, according to a recent study by the Center for Retail Research. My own experiences place it slightly higher;55-60%. The topic is a difficult one for most owners/managers to deal with, since it “accuses” their work family of dishonest practices. In addition, most owners/managers I’ve come into contact with are in denial;that is, they will not believe that anyone on their staff could be a thief. This denial, however, could end up costing their company a large portion of it’s profits.

Statistics on retail outlets show that, in general, there are three basic groups of employees :20% who are chronic thieves, 20% who will never steal and 60% who will steal if given the motive and opportunity.  The owner/manager who believes he/she has only hired the honest 20% is clearly in denial.

Three main factors contribute to Internal Theft:

1 )NEED  – The need the employee has for money/product, whether real or imagined.

2) TEMPTATION – The overwhelming feeling an employee has when placed around pilferable items, due many times to the feeling that the employee is “entitled” to supplement his/her income because of being “underpaid”, “not appreciated”, “treated unfairly”, or feeling that the company/store “will never miss it”.

3) OPPORTUNITY – If the employee feels the “need” as well as the “temptation”, he/she will usually look for the opportunity.

While you cannot remove the need, you need to protect yourself and your employees from the Temptation and Opportunity. Time and time again I’ve heard employees, after being caught stealing, saying “they made it so easy” or “you made it too hard to resist”.  Overall, the message is clear:the best defense is a good offense.  Insuring that your employees are well trained from the start, and are made to adhere consistently to established policies and procedures, will help minimize your exposure, as well as theirs.

More to follow….

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