Employee theft is an ongoing problem for small business owners, regardless of the type of business they have. However, if you have a retail business, you are at a higher risk, as employees stealing from the cash register or store goods is a very common reason for theft. Other reasons include embezzlement from your company account, credit card fraud, office supply theft, and theft in the form of giving free products or services to others without your consent.
According toStatistic Brain, the average amount stolen from an employee is $175,000, with $100,000 being the most. There are also about 25.3 percent of thefts over a million dollars. Here are some important things to know about employee theft.
Increase in Employee Theft
The bad news is that employee theft seems to be on the rise, according toBusiness News Daily. It has reported that in 2012, more than 71,000 employees were caught stealing money or goods from their retail employers. The total amount recovered from these thefts was over $50 million and it was an increase of seven percent from the year before. The report showed that the most common type of theft was of retail goods or money from the cash register. About 64 percent of the businesses surveyed lost products from their dishonest employees. Tools and equipment followed behind goods and money being stolen.
The Danger for Small Businesses
Small businesses tend to experience theft more often than large businesses because of opportunity. Employees of small businesses find that there are more chances to steal from their employer, as well as assuming their employer isn’t going to report them. They also tend to know the ins and outs of their small company better than if they worked for large corporations.
This insider information includes knowing passwords for work computers, how to get in after hours, and what type of security surveillance is around the store or business property. As a small business owner, this makes it even more vital that you have the right preventative measures in place to avoid the loss of employee-related theft.
Reasons Employees Steal From Their Employees
As already mentioned, opportunity is one of the most likely reasons an employee steals from their employer. Lack of security and being left alone with goods or cash makes someone more likely to commit a crime, which is the same for non-employee thefts.
Another common reason is simply someone being a dishonest person and having a history of these types of petty crimes. Some people are having financial difficulties, while others have gotten away with it in the past, so they attempt it once more. Thus, the importance of performing proper pre-employment screening, including running a background check, before hiring a new employee.
Tips for Preventing Employee Theft
Now that you know more about your risks, you can work to prevent employee theft and protect your business. The first thing to do is expect theft and remove the temptation. Have plenty of security surveillance all around the property, making it nearly impossible for an employee to get away with the crime. Have a zero-tolerance policy for theft, not only letting employees know they will lose their job is caught stealing from your company, but that you will press charges. Have routine checks of your accounts and nightly cash register counting to catch the crime right away, and also to deter employees hoping for a convenient theft.
Whether or not you choose to prosecute against an employee who has stolen from your company is up to you. You may want to consider the amount of money or goods stolen when making this decision. Either way, be sure your company is protected from the lost with crime insurance and an employee dishonesty insurance policy.