Should we keep tabs on our staff?

August 25th, 2008

A culture of zero tolerance towards staff theft is sweeping its way through the country’s leading retail firms. Action to stamp out stock theft, theft from tills and growing levels of refund fraud is being taken by leading retailers.

Retailers are losing billions every year through theft, according to figures from the British Retail Consortium and about a third of this sum is attributed to dishonest staff.

As a result, retail companies are turning their attentions to internal problems, says Salgado Investigations’ senior corporate investigator Jorge Salgado-Reyes. A starting point is for companies to improve their vetting procedures during recruitment” he says. “The reality is that every major retailer has internal theft problems”.

New opportunities for staff to commit internal theft have emerged, thanks to the nature of modern retailing. For example, credit card technology gives internal scammers the ability to perform a refund transaction on their own or a friends credit card in‐store and later share the spoils. There is no physical movement of product or cash. And dishonest staff who, according to research, tend to be part‐time workers or those employed with a company for less than 12 months are ‐ searching out new ways of helping themselves. “I have investigated staff who have clocked up loyalty points on their own loyalty cards, when processing a customer’s purchases,” says Jorge Salgado-Reyes.

Retail fraud investigation specialist Jorge Salgado-Reyes says retailers must understand where such problems take place in their store.

“Technological solutions that link CCTV with EPOS or enable data mining of EPOS information to alert managers to till fraud are more common. For example, if a member of staff is carrying out an unusual number of refunds, but the CCTV shows no product being passed back, you can take action.
Similarly, clocking up fewer scans per minute than the average, managers are alerted to watch out for items being passed out for free. You might then use CCTV to investigate further.”

Jorge Salgado-Reyes urges retailers to take a holistic approach to investigations, looking beyond traditional shrinkage, because it often unearths wider operational problems that, when rectified, can save the company significant sums. “Profits may be down, but shrinkage is a constant, so losses take a larger percentage off the bottom line,” he says.

“Implanting a culture of zero tolerance needs to start with company‐wide adherence to robust company procedures,” he says. “It’s no good having woolly guidelines about when tills should be opened and how refunds are processed and recorded, because this plants the seed of opportunity in the minds of the staff. To minimise temptation, all staff need to be aware that procedures are set in stone and any straying from the rules will be investigated.”

Jorge Salgado-Reyes is also a strong advocate of properly supported systems of whistle‐blowing within the company. This involves staff being given an incentive to report suspected dishonest behaviour using a confidential helpline. Zero tolerance means dismissing and prosecuting dishonest employees wherever possible and communicating these actions back to the staff.

Posted in Retail Fraud Prevention, Staff Theft |