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Профессиональный Документы
Культура Документы
Scope
This policy applies to all our employees regardless of employment
agreement or rank.
Policy elements
Employees:
Professionalism
All employees must show integrity and professionalism in the
workplace:
Personal appearance
Corruption
We discourage employees from accepting gifts from clients or
partners. We prohibit briberies for the benefit of any external or
internal party.
All employees should fulfill their job duties with integrity and
respect toward customers, stakeholders and the community.
Supervisors and managers mustn’t abuse their authority. We
expect them to delegate duties to their team members taking into
account their competences and workload. Likewise, we expect
team members to follow team leaders’ instructions and
complete their duties with skill and in a timely manner.
Conflict of interest
Collaboration
Communication
Benefits
We expect employees to not abuse their employment benefits.
This can refer to time off, insurance, facilities, subscriptions or
other benefits our company offers.
Policies
Disciplinary actions
Our company may have to take disciplinary action against
employees who repeatedly or intentionally fail to follow our code
of conduct. Disciplinary actions will vary depending on the
violation.
Demotion.
Reprimand.
Keep in mind that this template is not a legal document and may
not take into account all relevant local or national laws. Please
ask your attorney to review your finalized policy documents or
Handbook.
Contents:
Dress code
Cyber security and digital devices
Internet usage
Cell phone
Corporate email
Social media
Conflict of interest
Employee relationships
Fraternization
Employment of relatives
Workplace visitors
Solicitation and distribution
Employee Code of Conduct template
As an employee, you are responsible to behave appropriately at
work. We outline our expectations here. We can’t cover every
single case of conduct, but we trust you to always use your best
judgement. Reach out to your manager or HR if you face any
issues or have any questions.
Dress code
Our company’s official dress code is [Business/ Business
Casual/ Smart Casual/ Casual.] This includes [slacks/ loafers/
blouses/ boots.] However, an employee’s position may also
inform how they should dress. If you frequently meet with clients
or prospects, please conform to a more formal dress code. We
expect you to be clean when coming to work and avoid wearing
clothes that are unprofessional (e.g. workout clothes.)
Internet usage
Our corporate internet connection is primarily for business. But,
you can occasionally use our connection for personal purposes as
long as they don’t interfere with your job responsibilities. Also, we
expect you to temporarily halt personal activities that slow down
our internet connection (e.g. uploading photos) if you’re asked to.
Corporate email
Email is essential to our work. You should use your company
email primarily for work, but we allow some uses of your
company email for personal reasons.
Work-related use. You can use your corporate email for work-
related purposes without limitations. For example, you can sign
up for newsletters and online services that will help you in your
job or professional growth.
Personal use. You can use your email for personal reasons as
long as you keep it safe, and avoid spamming and disclosing
confidential information. For example, you can send emails to
friends and family and download ebooks, guides and other safe
content for your personal use.
Our general expectations
No matter how you use your corporate email, we expect you to
avoid:
Social media
We want to provide practical advice to prevent careless use of
social media in our workplace. We address two types of social
media uses: using personal social media at work and
representing our company through social media.
For this reason, conflicts of interest are a serious issue for all of
us. We expect you to be vigilant to spot circumstances that create
conflicts of interest, either to yourself or for your direct reports.
Follow our policies and always act in our company’s best
interests. Whenever possible, do not let personal or financial
interests get in the way of your job. If you are experiencing an
ethical dilemma, talk to your manager or HR and we will try to
help you resolve it.
Employee relationships
We want to ensure that relationships between employees are
appropriate and harmonious. We outline our guidelines and we
ask you to always behave professionally.
Fraternization
Fraternization refers to dating or being friends with your
colleagues. In this policy, “dating” equals consensual romantic
relationships and sexual relations. Non-consensual relationships
constitute sexual violence and we prohibit them explicitly.
Dating colleagues
If you start dating a colleague, we expect you to maintain
professionalism and keep personal discussions outside of our
workplace.
You are also obliged to respect your colleagues who date each
other. We won’t tolerate sexual jokes, malicious gossip and
improper comments. If you witness this kind of behavior, please
report it to HR.
Dating managers
To avoid accusations of favoritism, abuse of authority and sexual
harassment, supervisors must not date their direct reports. This
restriction extends to every manager above an employee.
Friendships at work
Employees who work together may naturally form friendships
either in or outside of the workplace. We encourage this
relationship between peers, as it can help you communicate and
collaborate. But, we expect you to focus on your work and keep
personal disputes outside of our workplace.
Employment of relatives
Everyone in our company should be hired, recognized or
promoted because of their skills, character and work ethic. We
would not like to see phenomena of nepotism, favoritism or
conflicts of interest, so we will place some restrictions on hiring
employees’ relatives.
Workplace visitors
If you want to invite a visitor to our offices, please ask for
permission from our [HR Manager/ Security Officer/ Office
Manager] first. Also, inform our [reception/ gate/ front-office] of
your visitor’s arrival. Visitors should sign in and show
identification. They will receive passes and will be asked to return
them to [reception/ gate/ front-office] once their visit is complete.
When you have office visitors, you also have responsibilities. You
should:
FURTHER READING
Explore the rest of our employee handbook template:
Employment Basics
Workplace Policies
Code of Conduct
Compensation and development
Benefits and Perks
Working Hours, PTO and Vacation
Employee Resignation and Termination
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Human resource professionals sometimes wonder when their activities
constitute the unlawful practice of law—holding oneself out to the public
as being entitled to practice law—and nowhere is the confluence of the
two more apparent than with unemployment compensation. The unlawful
practice of law, defined differently from state to state, can result in
misdemeanors, criminal prosecution and the invalidation of actions
sought by the persons engaged in this activity, even if they engage in it
unwittingly.
Even just in the area of unemployment compensation, when HR is
unlawfully practicing law is a touchy question—one that sets off turf
battles between HR and attorneys. State laws dictate the answer but
have been changed on occasion when state legislatures or courts have
been overly restrictive about what HR can do.
The tension between HR and attorneys over when HR professionals are
unlawfully practicing law goes back at least 15 years to an American Bar
Association (ABA) model definition for the unlawful practice of law that
didn't adequately account for routine HR practices. More recently,
decisions in some states, such as Arkansas, have defined what
nonlawyers may do restrictively.
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First things first: you should ensure you have proper policies in place.
Your policies should outline the various forms of fraud and time theft, as
well as your company’s stance on these activities. It should also mention
the checks that will be performed, as well as what steps will be taken
should fraud or theft be found. You may also want to consider writing up
a code of conduct to give to each employee at the time of hiring,
outlining what is expected and what isn’t tolerated in the workplace.
Educating your employees is the first step to preventing employee fraud.
Communicate Clearly
You should also make it part of your mission to be open with your
employees about your stance on fraud and theft and ensure they
understand you have no tolerance for theft in the workplace. While this
should be outlined when you first hire your employee, you should take
every effort to ensure that your views on this are not hidden. When
employees are aware that you take this seriously, they’ll be much less
likely to try it.
One of the best ways to find out what is really going on with your
employees is from those who they are in close contact with. While many
people are leery about turning their fellow co-worker in, you can make it
possible for your employees to provide anonymous tips or insight to
theft. While this is a highly effective way to stop fraud in its tracks, it’s
also important to ensure that each employee who is suspected of fraud
is thoroughly investigated. Always avoid rushing to pass judgment until
you’ve gathered all the facts.
Give it 0.5/5
Give it 1/5
Give it 1.5/5
Give it 2/5
Give it 2.5/5
Give it 3/5
Give it 3.5/5
Give it 4/5
Give it 4.5/5
Give it 5/5
Employee theft is one of the most serious problems facing small business
owners in the U.S. According to the National Federation of Independent
Business (NFIB), an employee is 15 times more likely than a non-employee to
steal from an employer, and employees account for an estimated 44 percent of
theft losses at stores. The U.S. Department of Commerce reports that nearly a
third of business failures are related to employee theft or fraud.
Business owners are rightly concerned – or should be. Employee misdeeds take
many forms:
1. Know your employees. Be alert to key indicators of potential theft such as:
4. Control cash receipts. Use serially pre-numbered sales slips and conduct
weekly audits. Balancing of sales slips and register receipts should be done by
someone other than the sales clerk.
5. Use informal audits. Make unannounced internal audits and have a yearly
audit performed by an outside firm.
If you suspect a problem, attorneys at the Small Business Legal Center offer this
advice;
Be extremely careful about making accusations and conducting
investigations – a false accusation can result in a lawsuit against you.
Verify suspicions by investigation, and determine the extent of fraud and
methods used. If you can identify the responsible employee, terminate
their employment and consider further legal action.
If it is a large or complex issue, consider involving legal counsel who
can assist with finding additional experts such as forensic accountants or
investigators.
Need advice on how to handle employee theft and fraud? Connect with a
SCORE mentor online or in your community today!
ABOUT THE AUTHOR(S)
Daniel Kehrer, Founder & Managing Director of BizBest Media Corp., is a
nationally-known, award-winning expert on small and local business, start-ups,
content marketing, entrepreneurship and social media, with an MBA from
UCLA/Anderson.
Daniel Kehrer
Founder & Managing Director, BizBest
KEY TOPICS
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Skimming
Employees have been skimming off the top of the cash drawer for years. Employees who
know that you won’t care about a discrepancy of a few dollars in the cash drawer may take
advantage of you by slowly skimming quite a large amount of cash over time.
Why do employees steal?
There are likely as many reasons as there are thieves but often, it’s a disgruntled employee.
Perhaps they’re stealing for revenge on the store for some reason. Perhaps it’s because they
think they deserve a raise that they haven’t gotten. Perhaps it’s because they are in a bad way
financially and really need help. But not all employees steal for these reasons either. Some,
like those who participate in “sweethearting,” may believe that they’re just helping out a
friend with their employment perks. Some, as in my case, may not even realize that they’re
actually stealing from the store.
How to prevent internal theft
The first thing to know is that it’s best to simply prevent these situations from happening.
Once an employee is actually stealing, it can be a tricky situation to handle. It can even, as an
episode of the crime show “Snapped” that still haunts me brutally demonstrated, be
a dangerous situation for the person who confronts the thief.
1. Run background checks on all new employees.
Running a background check is a fairly standard process that will help you weed out any
clear bad eggs up front. Mikal E. Belicove from Forbes has some good tips:
He suggests that while you do use background checks, don’t use “the box.” That
means, don’t ask someone if they have a criminal background on their paper
application just to weed people out. Conduct interviews first and get to know someone
first to avoid unnecessary discrimination.
Be consistent and run the same process on each applicant.
Look for patterns, rather than a single good or bad act.
Use a professional agency.
2. Ensure that all employees are well-trained on policy to prevent
accidental loss.
As previously mentioned, employees might make mistakes on the job. Whether it’s entering
the wrong number of inventory or giving the wrong discount, mistakes happen and they can
really add up.
Work with your employees so that they know your policies and check their work. In my case,
I learned that BOGO discounts are put on the lower priced item because my manager was
checking receipts that day and noticed my error. She pulled me aside and kindly let me know
how to do discounts correctly. That short conversation likely saved my store quite a lot of
money in the long run.
3. Institute modern inventory management and POS software to make
it easier to monitor for discrepancies.
You certainly could audit receipts every day or week or month to try to discover patterns of
loss in your store. But you could also just implement a modern inventory management and
POS system that will pull reports for you every day. These reports will make it easy for you
to notice patterns (like if the cash register has been consistently down a few dollars) and will
make it noticeable when you do inventory checks what exactly is missing.
4. Count your cash drawers every day.
You do want to count your cash drawers every day to keep full tabs on how much cash is in
them at all times. Running these counts will deter skimming and help you detect it, as well.
5. Use a buddy system for the trash.
Given that the trash is a popular method for employee stealing, have your employees take the
trash out together. Thieves are less likely to try to stuff something in the trash bag when
someone is there watching them.
This tip is a doubly good, too, because having two people take out the trash is typically safer
than having one person take out the trash.
6. Have employees check each other’s bags before they leave for the
day.
This tip is a bit awkward, I know. I used to have to do it. Whenever an employee left the
store, the manager on duty would check their bag before they left. At closing, the employee
left with the manager would also check the manager’s bag. It was always a bit awkward to
hold your purse out and let someone else go through it, and it was always plenty awkward to
be the person going through the bag, but it certainly made it more difficult for anyone
wishing to walk out with an item in their bag.
7. Implement surveillance software.
Surveillance software isn’t just video cameras anymore. Now the cameras are equipped with
software that can help them detect such activities as “sweethearting” and alert you to the
problem. It’s pretty incredible. These systems are especially good for documenting instances
of employee theft.
Further Reading
In addition to surveillance cameras, there are several other loss prevention tools you that you
can use to beef up security in your store. Learn about them in our previous post, 7 Powerful
Tools & Technologies to Help You Reduce Shrinkage.
LEARN MORE
Enjoyed this post? Check out The Ultimate Guide to Training and
Motivating Retail Employees, an in-depth resource packed with actionable takeaways for
motivating employees and boosting staff productivity. In this guide, you’ll learn:
How to empower your workforce to maximize happiness and productivity
What tools and methods to use when educating your staff
How to motivate your staff to bring their best selves to worK
Conclusion
Internal theft can cost you thousands of dollars and is one of the biggest threats to your
business. But by enacting careful policies and using the right technology, you can mitigate a
great deal of your loss.
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Whether you own a boutique clothing shop, a large hardware store or a discount
furniture depot, one of the biggest threats to your business is employee fraud. The
2017 National Retail Security Survey estimated that 30 percent of inventory loss
could be attributed to employee theft. While 36.5 percent of loss is due to external
shoplifting, 21.3 percent to paperwork errors, 5.4 percent to vendor fraud and 6.8
percent to unknown sources, a 30 percent stake in inventory loss should be enough
to make any business owner a little more proactive about spotting and preventing
inside jobs.
This is by no means a comprehensive list of every scam out there, but it does shed
light on the signs of some of the most common retail employee scams and what you
can do to stop them from happening.
The method of swapping out gift cards works best (for employees) in high-traffic
stores that don't depend on return customers. Stores that cater to tourists or have
heavy one-off traffic during certain seasons are more likely to experience this type of
scam.
In a gift card swap, an employee will ring up and activate a gift card for a legitimate
paying customer and then hand the customer a gift card that hasn't been activated
and cannot be used. The employee will then run the cost of the gift card through the
system, so when the register is closed out, everything looks fine. However, they'll
pocket the activated gift card and resell it, give it to someone or use it.
Diverting refunds
Running a false return on merchandise and then creating a "store credit" on a gift
card is another common way employees can use gift cards to steal. While many retail
owners don't worry much about gift card fraud, they should. Large sums of money
can be stolen using a diversion tactic like this one. In 2009, the New York
Times published an article about the frequency and severity of retail fraud involving
gift cards, mentioning an extreme example of a 23-year-old sales clerk who was
arrested for stealing more than $130,000 from Saks Fifth Avenue by ringing up false
refunds on gift cards.
Of course, most small businesses couldn't lose such a large sum without noticing, but
the fact that even highly structured chains can let these types of thefts happen shows
how easy they are to attempt.
Solutions
If your store has gift cards, you should have an inventory system for them. Consider
numbering the gift cards, or routinely checking the stock of available gift cards. If you
notice an unusual number of returns issued in the form of store credit, audit the staff
schedule. If one member of your staff is issuing a disproportionate number of store
credits, fraud may be taking place.
2. Collaborative theft
There are two primary types of collaborative theft between employees and
nonemployees – sweethearting and shoplifting.
Sweethearting
The most common type of employee theft in a retail setting is called sweethearting.
In this type of scam, an employee uses their position as a retail worker to give things
to friends and family either for free or at a deep discount.
In some instances of sweethearting, a register clerk will only ring up a few of the
items their friend is purchasing and not scan the others, thereby giving their friends
permission to steal without the risk of getting chased or caught. The most
sophisticated employees, particularly those at the management level, may even
change the inventory numbers in the system to make it look as though the item they
gave away was never stocked. So, even if the owner is regularly pulling POS
information on inventory and sales, everything will look like it's aboveboard.
Shoplifting
While many instances of shoplifting are legitimate outside crimes (with an external
person stealing from your store without the knowledge of your employees), there are
also shoplifting scams that involve both an outside thief and an employee. An
employee may make a deal with a friend that they get a certain percentage of a take
or job.
In a scenario like this, the employee will agree to look the other way while the co-
conspirator looks and acts like a typical shoplifter. Retail employees tend to do this in
small stores that are only staffed by one or two people at a time and often use this
method when there are security cameras around. The employee may even pretend to
chase the "suspect" from the scene to appear uninvolved.
Solutions
One major solution to collaborative theft is never having only one person in the store
at a time and increasing surveillance. While an unusually bold employee may attempt
a collaborative shoplifting scam, they will have trouble doing so repeatedly if there
are cameras watching.
To combat sweethearting, retail owners should outline policies for their employees in
a clear manner. Many retail workers may not consider giving out discounts to friends
stealing, and having a policy on the books may deter them from doing it in the first
place. For the sweethearting scams that involve outright theft of merchandise, the
best antidote is careful inventory management. If an employee can successfully give
away merchandise for months on end without you noticing, that is a failing not only
of the employee's character but of your inventory system as well.
3. Merchandise theft
Merchandise theft is a very common practice in independently owned retail
establishments for a few reasons.
Manipulating inventory
Most chain retail stores have extensive inventory systems that are challenging to
cheat, and at large stores, it's not uncommon to have different employees working at
the same time in different departments. A floor salesperson in a big-box store may
not even know how the inventory system in their store works. However, at mom and
pop shops, the employee who is responsible for checking out customers is often the
same person responsible for pricing items, opening new packages and inventorying
stock in the first place. This creates an opportunity for merchandise theft that rarely
occurs at larger stores.
Savvy staff members may be deceptive about deliveries to make it seem like a vendor
hasn't delivered in full, and then steal the difference. For example, if 50 dresses were
meant to be delivered to a clothing store, the manager on duty might tag, price and
inventory just 48 dresses. When doing a big inventory, it's easy to miss two dresses.
When questioned, the manager could shrug and say they tagged all the dresses in the
box.
Most merchandise thefts don't require any inventory manipulation, because many
stores have poor inventory systems to begin with. Many retail establishments don't
input items individually, and many more use the same SKUs for multiple items that
are similar in nature or price. Such shortcuts open the door for employees to steal
freely, taking what they want from the stockroom without fear of recrimination.
Employees will also do this if they know the stockroom is never checked, and,
unfortunately, many business owners spend time at the front, greeting customers
and saying hello but not in the basements or stockrooms counting items.
Solutions
This is one of the most effective ways for retail workers to scam a store, because it
bypasses a few common traps stores put in place to catch fraud. For one thing, a
customer is unlikely to complain about anything, because things are fine on their
end; they weren't overcharged or undercharged, and they still have the item they
purchased. Plus, a certain number of returns in a day at a high-volume store isn't an
instant red flag.
Solutions
Auditing returns is a must for all retailers, but especially those that sell high-priced
items that may draw this type of scam. One major tell is returns that have been input
at the end of the day, first thing in the morning, during lunch hour or at any other
time there may be few staff members in the store. Consistency is key – do most
returns happen on Wednesdays and Fridays at 4 p.m.? That's a red flag. You can
cross-check returns with the employee issuing them. If one employee processes a
disproportionate number of returns, you may want to investigate further.
Another way to avoid this process is by having a strict workflow for returns.
Requiring a second individual to check and then restock the returned item, for
example, may deter a lone scammer from trying to game the system.
In a credit card fraud scenario, two basic things happen. First, the employee
gradually collects the credit card information of the customers at the store, then they
either use that information to process false sales (followed by false cash returns,
pocketing the cash) or use the credit cards to fill gift cards for themselves.
You may be wondering how this is possible – surely the card holder would notice
false charges, right? Not necessarily. These scams work best in high-volume stores
with mostly repeat customers, like gas stations, pharmacies and supermarkets.
Consider your local grocery store. If you go every week, often multiple times a week,
would you really notice an extra $15 charge twice a month? If you're a business
owner, you probably answered yes, but for a typical consumer, the likely answer is
no. Most consumers do not go through itemized charges and analyze them at the end
of the month. Plus, in this scenario, the employee will often farm money from many
different customers in the rotation so as not to arouse suspicion.
Solutions
A locked system that makes it impossible or difficult for employees to access credit
card information is an obvious way to cut down on credit card fraud. A camera
behind the register can also reduce this behavior, since schemes like this are typically
done when there aren't any customers in line. If an employee is fiddling with the
system a lot when there are no customers, you can always pull a report of sales for
the day and cross-check the sales with the times that the store was empty. If sales
were run when no customers were in the store, that's a dead giveaway.
External theft
It's important to point out, after all this, that most retail employees do not steal, and
in many cases, thefts are simply performed by random shoplifters. If you have a
shoplifting problem that is not internal, beefing up security at your store with alarm
systems, surveillance and even security personnel can help. However, the burden of
policing the store should not be placed on the shoulders of your employees, for
internal or external thefts. Docking employee pay for stolen goods or scammed cash
will likely result in resentment.
Mona Bushnell
Mona Bushnell is a New York City-based Staff Writer for Business News Daily and
Business.com. She has a B.A. in Writing, Literature, and Publishing from Emerson
College and has previously worked as an IT Technician, a Copywriter, a Software
Administrator, a Scheduling Manager and an Editorial Writer. Mona began freelance
writing full-time in 2014 and joined the Business.com team in 2017.
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other types of professional advice.
Whether you own a boutique clothing shop, a large hardware store or a discount
furniture depot, one of the biggest threats to your business is employee fraud. The
2017 National Retail Security Survey estimated that 30 percent of inventory loss
could be attributed to employee theft. While 36.5 percent of loss is due to external
shoplifting, 21.3 percent to paperwork errors, 5.4 percent to vendor fraud and 6.8
percent to unknown sources, a 30 percent stake in inventory loss should be enough
to make any business owner a little more proactive about spotting and preventing
inside jobs.
This is by no means a comprehensive list of every scam out there, but it does shed
light on the signs of some of the most common retail employee scams and what you
can do to stop them from happening.
In a gift card swap, an employee will ring up and activate a gift card for a legitimate
paying customer and then hand the customer a gift card that hasn't been activated
and cannot be used. The employee will then run the cost of the gift card through the
system, so when the register is closed out, everything looks fine. However, they'll
pocket the activated gift card and resell it, give it to someone or use it.
Diverting refunds
Running a false return on merchandise and then creating a "store credit" on a gift
card is another common way employees can use gift cards to steal. While many retail
owners don't worry much about gift card fraud, they should. Large sums of money
can be stolen using a diversion tactic like this one. In 2009, the New York
Times published an article about the frequency and severity of retail fraud involving
gift cards, mentioning an extreme example of a 23-year-old sales clerk who was
arrested for stealing more than $130,000 from Saks Fifth Avenue by ringing up false
refunds on gift cards.
Of course, most small businesses couldn't lose such a large sum without noticing, but
the fact that even highly structured chains can let these types of thefts happen shows
how easy they are to attempt.
Solutions
If your store has gift cards, you should have an inventory system for them. Consider
numbering the gift cards, or routinely checking the stock of available gift cards. If you
notice an unusual number of returns issued in the form of store credit, audit the staff
schedule. If one member of your staff is issuing a disproportionate number of store
credits, fraud may be taking place.
2. Collaborative theft
There are two primary types of collaborative theft between employees and
nonemployees – sweethearting and shoplifting.
Sweethearting
The most common type of employee theft in a retail setting is called sweethearting.
In this type of scam, an employee uses their position as a retail worker to give things
to friends and family either for free or at a deep discount.
In some instances of sweethearting, a register clerk will only ring up a few of the
items their friend is purchasing and not scan the others, thereby giving their friends
permission to steal without the risk of getting chased or caught. The most
sophisticated employees, particularly those at the management level, may even
change the inventory numbers in the system to make it look as though the item they
gave away was never stocked. So, even if the owner is regularly pulling POS
information on inventory and sales, everything will look like it's aboveboard.
Shoplifting
While many instances of shoplifting are legitimate outside crimes (with an external
person stealing from your store without the knowledge of your employees), there are
also shoplifting scams that involve both an outside thief and an employee. An
employee may make a deal with a friend that they get a certain percentage of a take
or job.
In a scenario like this, the employee will agree to look the other way while the co-
conspirator looks and acts like a typical shoplifter. Retail employees tend to do this in
small stores that are only staffed by one or two people at a time and often use this
method when there are security cameras around. The employee may even pretend to
chase the "suspect" from the scene to appear uninvolved.
Solutions
One major solution to collaborative theft is never having only one person in the store
at a time and increasing surveillance. While an unusually bold employee may attempt
a collaborative shoplifting scam, they will have trouble doing so repeatedly if there
are cameras watching.
To combat sweethearting, retail owners should outline policies for their employees in
a clear manner. Many retail workers may not consider giving out discounts to friends
stealing, and having a policy on the books may deter them from doing it in the first
place. For the sweethearting scams that involve outright theft of merchandise, the
best antidote is careful inventory management. If an employee can successfully give
away merchandise for months on end without you noticing, that is a failing not only
of the employee's character but of your inventory system as well.
3. Merchandise theft
Merchandise theft is a very common practice in independently owned retail
establishments for a few reasons.
Manipulating inventory
Most chain retail stores have extensive inventory systems that are challenging to
cheat, and at large stores, it's not uncommon to have different employees working at
the same time in different departments. A floor salesperson in a big-box store may
not even know how the inventory system in their store works. However, at mom and
pop shops, the employee who is responsible for checking out customers is often the
same person responsible for pricing items, opening new packages and inventorying
stock in the first place. This creates an opportunity for merchandise theft that rarely
occurs at larger stores.
Savvy staff members may be deceptive about deliveries to make it seem like a vendor
hasn't delivered in full, and then steal the difference. For example, if 50 dresses were
meant to be delivered to a clothing store, the manager on duty might tag, price and
inventory just 48 dresses. When doing a big inventory, it's easy to miss two dresses.
When questioned, the manager could shrug and say they tagged all the dresses in the
box.
Most merchandise thefts don't require any inventory manipulation, because many
stores have poor inventory systems to begin with. Many retail establishments don't
input items individually, and many more use the same SKUs for multiple items that
are similar in nature or price. Such shortcuts open the door for employees to steal
freely, taking what they want from the stockroom without fear of recrimination.
Employees will also do this if they know the stockroom is never checked, and,
unfortunately, many business owners spend time at the front, greeting customers
and saying hello but not in the basements or stockrooms counting items.
Solutions
Again, maintaining a rock-solid inventory system will go a long way toward
preventing merchandise theft. Installation of cameras in stockroom areas, while
relatively uncommon in independent retail shops, is smart for retailers that have had
a problem with merchandise walking away in the past.
This is one of the most effective ways for retail workers to scam a store, because it
bypasses a few common traps stores put in place to catch fraud. For one thing, a
customer is unlikely to complain about anything, because things are fine on their
end; they weren't overcharged or undercharged, and they still have the item they
purchased. Plus, a certain number of returns in a day at a high-volume store isn't an
instant red flag.
Solutions
Auditing returns is a must for all retailers, but especially those that sell high-priced
items that may draw this type of scam. One major tell is returns that have been input
at the end of the day, first thing in the morning, during lunch hour or at any other
time there may be few staff members in the store. Consistency is key – do most
returns happen on Wednesdays and Fridays at 4 p.m.? That's a red flag. You can
cross-check returns with the employee issuing them. If one employee processes a
disproportionate number of returns, you may want to investigate further.
Another way to avoid this process is by having a strict workflow for returns.
Requiring a second individual to check and then restock the returned item, for
example, may deter a lone scammer from trying to game the system.
In a credit card fraud scenario, two basic things happen. First, the employee
gradually collects the credit card information of the customers at the store, then they
either use that information to process false sales (followed by false cash returns,
pocketing the cash) or use the credit cards to fill gift cards for themselves.
You may be wondering how this is possible – surely the card holder would notice
false charges, right? Not necessarily. These scams work best in high-volume stores
with mostly repeat customers, like gas stations, pharmacies and supermarkets.
Consider your local grocery store. If you go every week, often multiple times a week,
would you really notice an extra $15 charge twice a month? If you're a business
owner, you probably answered yes, but for a typical consumer, the likely answer is
no. Most consumers do not go through itemized charges and analyze them at the end
of the month. Plus, in this scenario, the employee will often farm money from many
different customers in the rotation so as not to arouse suspicion.
Solutions
A locked system that makes it impossible or difficult for employees to access credit
card information is an obvious way to cut down on credit card fraud. A camera
behind the register can also reduce this behavior, since schemes like this are typically
done when there aren't any customers in line. If an employee is fiddling with the
system a lot when there are no customers, you can always pull a report of sales for
the day and cross-check the sales with the times that the store was empty. If sales
were run when no customers were in the store, that's a dead giveaway.
External theft
It's important to point out, after all this, that most retail employees do not steal, and
in many cases, thefts are simply performed by random shoplifters. If you have a
shoplifting problem that is not internal, beefing up security at your store with alarm
systems, surveillance and even security personnel can help. However, the burden of
policing the store should not be placed on the shoulders of your employees, for
internal or external thefts. Docking employee pay for stolen goods or scammed cash
will likely result in resentment.
The Balance Careers
•••
BY DENNIS NAJJAR
Reports collated by Statistic Brain indicate that more than 28 percent of business
losses ranged from $100,000 to $499,000, and 25 percent of losses exceeded $1
million. These figures are disturbing because they demonstrate that business losses
due to employee theft are not trivial. The median value of cash or goods stolen was
placed at $75,000.
In 2014 alone, more than 1.2 million shoplifters and wayward employees were
caught in the act, according to a study conducted by Jack L. Hayes, a loss
prevention and inventory shrinkage control consulting firm. More significantly, these
numbers were generated from 25 big retailers, suggesting that the problem is more
widespread and the losses more substantial if small to medium retailers were
included in the mix. According to several studies, losses from employee theft
outpaced losses from shoplifting.
In many cases, the perpetrators are long-time trusted employees who change from
hardworking, employee-of-the-month types to sneaky thieves who create meticulous
plans to redirect funds to their own accounts or help themselves to inventory. What
could possibly motivate these individuals to risk their career and livelihood to make a
few thousand dollars?
The best defense is a proactive approach to the problem of employee theft. Security
experts suggest that business owners and managers should assume that it is
happening or that it will happen when the opportunity arises. This does not mean
treating all employees with suspicion because that is the quickest way to sink
morale. The strategy calls for a comprehensive systems review to identify the
loopholes in administrative and operational procedures.
When it comes to employee theft, prevention is the best defense. Review your
systems and procedures to identify vulnerable areas, and make the changes as
needed. It may help to work with a neutral party with a fresh perspective to find the
red flags. When incidents of fraud and employee theft are found, act quickly,
decisively, and firmly. Follow a zero-tolerance policy to protect your company from
incurring substantial losses due to employee theft.
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