HOW COULD THEY BE SO BRAZEN?

Large Cash Shortages

Have you ever had a register come up with a shortage so big that “it has to be a mistake”?

What did you do? Chances are you asked the sales clerk about it and were convinced it was some sort of glitch or error, after all no one is that brazen! 

Dishonest people do not think and process information like honest ones.
 

Here’s one hypothesis. Remember, 50% of employees steal because they either have no fear of detection or they are just plain dishonest. Some employees steal only when they have too. Generally, the person who steals without attempting to cover it up is not very good at managing money. If they were, they would just knock down a few sales here and there, pocket the cash and save it for when the money is needed - but they are not good money managers. I have seen this happen in convenience stores, banks, hardware and department stores.
 

The “situational thief” is different. When confronted with a budget shortfall and the resultant financial bind - maybe the car payment is due; they start living on “hopium”.
 

Hoping some windfall will come along and that they’ll have the money to pay the bill. But when hopium doesn’t work they often grab the cash in one fell swoop! 
 

Then that nice, rational person that lives inside most supervisors gives that cashier the benefit of the doubt because it's so obvious it must be a mistake!   Bingo – we’ve created an environment that makes future theft easier because there were no consequences! 
 

Experience does not necessarily make us smarter...it's our reaction time, that gets quicker.

RMSLP.COM

The Chain Link Theory of Loss Prevention

My career in Investigations and Loss Prevention began in the United States Army as a Military Police Investigator and later as a Physical Security Inspector before entering the exciting world of Retail Loss Prevention. I was a Security Manager and Polygraph examiner with a large discount department store chain before moving into the convenience store industry. If I learned anything in my 30 plus years of experience in law enforcement, private security and retail operations it is these three things –  

• A loss prevention program is like a chain. Each link in the chain represents your policies, controls, equipment systems, and everyone in the organization.
• Your program, in this case, your chain, is only as strong as your weakest link.
• The weakest link in that chain is always, without exception - people!

 

All of the pre-employment screening, training, fancy systems with the bells and whistles, the shrinkage committees, shipping and receiving policies and procedures, vendor controls, cash controls are only as good as the people we employ, train, supervise and inspect on a regular basis. 

The predominant contributors to retail losses, according to the National Retail Security Survey Final Report, 2010,states "employee theft…is the single most significant source of inventory shrinkage."

 

 

Retailers Attribute 45% of All Inventory Losses to Employee Theft!

 

First let’s take a quick look at the word “shrinkage”. It’s become a politically acceptable term for the consequences of poor management.  In my experience as both an investigator and manager in the retail environment I was taught that there were acceptable levels of shrinkage and that the term covers the full spectrum of: 

o   Employee Theft o   Customer Theft o   Vendor Fraud &Theft 

o   Administrative & Paperwork Errors 

We have even gone as far as to breakout cash losses separately from “shrinkage” when we all know that the majority of our cash losses are the result of employee theft. 

In future blogs I will share with you some of my thoughts and experience (including some mistakes) preventing and detecting Employee Theft.

 

Bob Cadigan

Risk Management Services Loss Prevention