Staff theft can cause as much damage to your business as shoplifting. Aidan Fortune investigates how to prevent it happening

Theft is an issue all retailers have to deal with on a constant basis. Not only does pilfering cost you money, but valuable time is wasted having to deal with the aftermath of someone stealing from your store. And when the thief is someone you trust, the blow is doubly hard.

According to the latest Global Retail Theft Barometer, 36.8% of shrinkage in UK stores is down to staff, up from last year's 36.4% and significantly higher than the European average of 29.8%. The report also estimates that theft by staff cost businesses in the UK £1.6bn in 2010.

How to limit staff theft in your store
*Balance the tills at the end of every day, reconcile credit card transactions every week and bank statements as often as possible 
*Create a stock check calendar to ensure the entire store is checked every three months, with extra frequency on high-value items 
*Place a notice by the till to encourage customers to check that their change is correct 
*Be aware that younger staff members, in particular, may be technically competent and able to exploit your epos system 
*Ensure staff know that you are monitoring stock levels, but involve them in the process to prevent them feeling undermined or under suspicion 
*Act on intuition if your instincts tell you something is wrong, it's worth investigating
Dave Newman of Westhill Stores in Hastings, East Sussex, says that it's not just lost stock or cash that makes staff theft difficult to stomach. "Staff theft isn't simply about the financial loss, it's the betrayal of the trust you place in your staff," he says. "Every year I have to dismiss someone for stealing and the whole process is demoralising and time-consuming, from identifying the problem, investigating it and then dealing with it."

Association of Convenience Stores chief executive James Lowman says that staff theft can destroy the morale of a business. "Catching a member of staff stealing from you can be devastating, especially if they have been working with you for a long time," he says. "Some long-term employees can be like members of the family, and for them to betray that trust can cause serious damage."

Professor Joshua Bamfield of the Centre for Retail Research and author of the Global Retail Theft Barometer, believes that the reason so many are tempted is that some convenience store workers don't view the job as "serious" and feel that it's okay to steal from their employer. "Working in retail used to be seen as more prestigious and staff members would take it more seriously, but now it's viewed as a transient job and employees feel that they can get away with it and aren't concerned if they get caught."

Bamfield says that to counteract this, retailers should make their staff feel more integral to the business. "While technology and stock checks will help solve staff theft problems, there are steps that a retailer can take to prevent it happening in the first place," he points out. "You can get them more involved in the running of the store by asking their opinion on a regular basis, or boost morale by offering team bonuses for productivity."

Be aware

Retailers should also look out for suspicious behaviour in their staff, says Bamfield, such as asking for wages early, or if they're acting strangely at work. "Even though they may not be planning on stealing from you, try to talk to them and see if they need help."

He adds that if theft prevention practices are put into place early, it can limit temptation for staff. "Employees should be searched regularly and routinely, rather than just when there is a problem," says Bamfield. "It can be an effective deterrent for would-be thieves."

Dean Holborn of Holborns in Redhill, Surrey, says that although it's an unpleasant job, it is important to constantly monitor your employees. "There are ways to monitor your staff such as regular stock checks," he says. "Epos is also good for checking stock levels. We run a tight ship here and if anything is missing, it's easy to find out when it happened and who was on the till."

He also advises retailers to watch out for suspicious signs. "One lad I took on was wearing a coat on a hot day," he says. "I told him to take it off and he was reluctant. When he eventually did, it turned out he had been using it to conceal stolen cigarettes and I was forced to sack him."

Dean HolbornHolborns, Surrey
Incident: "On one occasion there was a discrepancy across £360-worth of stock missing. The amount was too high to be a stock-taking error, which meant that a member of staff had probably taken it." 
Action taken: "I let all the staff know that it had been noticed and that if anyone was caught stealing, they would be punished. I printed a list of the missing products and made staff aware individually. The girl whom I suspected asked what the list was for and her jaw dropped when I told her. The next stock check showed no discrepancies."
Mills Group's head of security Peter Appleby says there are specific times when a retailer should be extra vigilant. "Because staff are paid on the last Friday of every month, there can be some months that there is a longer gap between pay days," he says. "It's during the last week of those months that staff are more likely to be tempted. In the past we've often seen items such as razors go missing, so we ask our managers to pay a little more attention to staff in the last week before pay day."

Dee Sedani of Londis in Etwall, Derbyshire, says tobacco products and scratchcards are popular targets for staff theft. "We check our tobacco stocks every two weeks against our epos system to make sure there are no discrepancies, but smaller items such as cigarette papers can be missed," he says.

"Scratchcards are difficult to track because epos systems don't register them individually, so if I notice one is missing I have to check hours of CCTV footage of the tills. It's important that you keep an eye on your employees and be on the lookout for suspicious behaviour such as constantly looking at the cameras, or checking if a manager is on the shop floor."

Dee warns retailers to keep track of mobile phone top-ups, too, as they are also vulnerable. "I suspected that some top-ups weren't being rung through the till so I started checking the systems more regularly," adds Dee. "It's a tricky one to prove, but once the staff realised that the top-ups were being monitored, it stopped straight away."

Bedfordshire Nisa Local retailer Kishor Patel was the victim when an employee exploited the credit card system on the store's epos. "We did an end-of-year reconciliation that highlighted discrepancies between credit card sales and cash sales, and it became clear that someone had been taking large amounts of money over a significant period," he says.

"It is important that all retailers ensure that they have systems to regularly check not only the till's balance, but also to reconcile cash, cheques, credit cards and bankings."

He has since recovered the stolen money, but advises other retailers to encourage customers to check receipts to ensure their change is correct and they haven't been charged for items they hadn't bought. He also suggests that staff be made aware that stock levels are being monitored and to carry out a full stocktake as often as possible.

Appleby says that every theft should be taken seriously, no matter how small. "We always carry out a full investigation into every incident," he says. "It's important to determine exactly what happened, as well as ensuring that the person suspected of theft did actually do it before taking action."

Bamfield adds that it's important not to ruin any trust you may have built up with other members of staff who are reliable. "While some employees may steal, there are many who wouldn't dream of doing so," he says. "If you accuse everyone of stealing and start constantly monitoring them with CCTV, you risk alienating the decent staff members. If you are suspicious about an employee, be sure about it before accusing them."

He urges retailers who have conclusive proof that an employee is stealing to act on it properly. "While it might be easier to just to sack the employee, this gives the impression that the penalties are limited for stealing," says Bamfield. "If the value of the goods or money stolen is significant then it may be advisable to notify the police. It's important that all staff know stealing will not be tolerated." 

Also see Your Rights