Keeping the Holiday Cheer by Reducing the Risk of Employee Theft

292px-FEMA_-_38940_-_Looters_are_warned_by_a_sign_in_Texas.jpgHoliday shopping: it can be stressful, expensive, and downright awful. The lines are longer, patience is thinner, and wallets are lighter.

What is supposed to be the time of year for Christmas, Hanukkah, Kwanzaa, or [Fill in Your Holiday/Vacation Away From Holidays Here] Cheer can instead be the perfect storm for fights and temper tantrums.

In the business context, the holiday shopping season, especially that seasoned shopper’s best friend, Black Friday, can be the breeding ground for mega losses in the form of theft.

In 2011, businesses were robbed of around $1.8 BILLION (yes that is supposed to be a B) in supplies and merchandise around the holiday season alone.

Some studies suggest that the majority of holiday thefts are committed by employees. 

Being able to spot the signs of employee theft and having plans in place to stop it can save you a lot of money this holiday season, which might just make your holiday a whole lot merrier!

Why might an employee steal?

So why might an employee steal?

Even the more ethical employees might make stupid decisions around this time of year for a variety of reasons. These include:

  • Economic hard times reducing job security and levels of expendable cash.
  • Long lines and lack of funds leading to heightened emotions and stress, which can cause people to act in ways contrary to their usual personality.
  • The desire, but lack of ability, to provide friends and family with the gifts they most want can make theft more appealing.

Which employee groups might be most likely to steal?

While it is possible that anybody might steal something if the temptation becomes high enough, most employees are probably not going to be thieves.

Employees with steady, predictable jobs (who want to keep those steady, predictable jobs) are less likely to risk their future by stealing from their employer.

In addition, an established relationship between employer and employee can create a sense of loyalty that the employee is less willing to break.

The holidays, however, can bring a slew of seasonal workers. Tenuous job stability and the temporary nature of seasonal work contribute to a decreased sense of loyalty compared to that of full-time employees.

So while the majority of seasonal employees are trustworthy, a lot of the employee theft that occurs during this season will likely come from this group.

What are the signs of possible employee theft?

There are many signs employers can look for when it comes to spotting employee theft.

Signs range from the obvious (like catching an employee red-handed) to the more circumstantial (like seeing an increase of spending that does not correlate to the employee’s paycheck).

Other signs of possible employee theft include:

  • Missing merchandise.
  • Cash registers that do not balance.
  • Shady or unusual employee behavior.
  • Unexpectedly low sales numbers.
  • Family and friends of employees who shop with the employer and only use the known employee’s register (this could point to “sliding theft“, where the employee slides the merchandise, but does not actually scan it at the register).

How can I potentially stop employee theft?

There are numerous things employers can do to prevent or minimize employee theft all year long.

You might also want to consider bulking up your holiday security procedures in the following ways to deal with the increased risk:

  • Be thorough when hiring seasonal staff. Conduct in-depth interviews, perform background checks and check references to make sure you hire only the best.
  • If possible, give any intended annual bonuses at this time of year: more expendable income means less risk of theft.
  • Install surveillance cameras in areas most susceptible to theft (such as supply stations, warehouses and retail floors).
  • Offer an anonymous employee hotline and/or reward.
  • Educate employees on what constitutes theft and the penalties if caught.
  • Hire security guards or train current managers to help spot theft.
  • Set up checks and balances to make sure no employee is around money, supplies, or financial records on their own. 

Read more on XpertHR.

And finally…

Have a holly, jolly holiday shopping season this year!