Internal Theft
Internal theft is a term used when an employee steals merchandise, food, cash, or supplies while on the job. The 22nd Annual Retail Theft Survey conducted by Jack L. Hayes International reported 70,409 employee apprehensions for a total recovery of over $51 Million from 25 retailers in 2009. There are a number of reasons why employees steal. Rarely is the reason a true need of the employee. Some of the primary reasons employees steal are low morale at the workplace, the employee feels that the company has wronged them in some way, the consequences of theft are minimal, and lack of control of inventory. This is a huge problem for retailers and one of the more difficult methods to identify and investigate.
Methods of Theft
The most common ways employees steal are taking cash directly from the register, refund fraud, discount abuse, merchandise/gift card fraud, passing off merchandise (sweethearting), and credit card fraud. This is not all inclusive as employees will always find other ways to steal but these are the most common methods
This is a video on internal theft in the casino industry but many of the concepts discussed are very much the same in the retail industry.
Preventing Internal Theft
Driving a culture of loss prevention should include training and awareness of internal theft issues, how it is investigated, and that the company takes a strong stance against it, including prosecution in some cases. Sometimes knowing the capabilities of Loss Prevention and that employee theft is a focus is enough for a would-be dishonest associate to think twice. Management also needs to help in eliminating opportunity through consistent and pro-active involvement, policies and procedures requiring management approval on certain transactions, etc.