Internal Theft
Employee theft is very common. Some retail industry studies have found that more than one third of all thefts from businesses were by employees. One way of controlling theft is to develop a good relationship with your employees. Make them feel respected and reward them for doing their jobs well. Provide good career opportunities. Companies with the lowest turnover rates have been found to have the lowest internal theft rates. Other ways to prevent internal theft are outlined in this section. They deal with cash handling, document protection, personnel policies, inventory control, trash control, purchasing procedures, bank deposits, key control, shipping and receiving, vehicle security, and property identification.
Despite your best efforts, dishonest employees can usually find ways to steal. If you suspect theft, call your security or loss prevention personnel and then the local SDPD Area Station. Don't play detective and try to solve the crime. And don’t jump to unwarranted conclusions. A false accusation could result in serious civil liability.
- Provide a receipt for every transaction. Encourage customers to expect a receipt by posting signs at each register.
- Put one employee in charge of setting up cash drawers. Have another double-check the cash count.
- Make each employee responsible for his/her own cash drawer. Issue one cash drawer per on-duty employee. No other employee should at any time (during lunch, breaks, etc.) be allowed to open or use another's cash drawer. At the end of each shift each cash drawer should be balanced by the employee and double-checked by another.
- Require that the cash register drawer be closed after each transaction. Never leave a register unlocked when not attended. And never leave the register key with a register.
- Identify each over-ring and under-ring. Managers should sign off all voids and over-rings.
- Check signatures against those on file.
- Limit the amount of accumulated cash in any register. Use a drop-safe.
- Check cash-to-sale ratios. These, along with unusually frequent refund transactions, can indicate employee theft.
- Keep tendered bills on the register until the transaction is concluded. Short-change artists frequently use large bills to pay
- Conduct only one transaction at a time. Do not be intimidated into rushing.
- Check for counterfeit currency. The look of the paper and its "feel" are usually the most obvious signs. A common counterfeiting practice is to "cut corners" off large bills and affix them to small-denomination bills. Inexpensive devices are available to aid detection of counterfeit bills.
- Shred all potentially sensitive materials including customer lists, price lists, prescription medical receipts, invoices, computer output, and documents with signatures.
- Require that all desks be cleared of important or confidential documents each night.
- Require that all file cabinets be locked when not in use.
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- Conduct a thorough background check and interview all job applicants. Consider using an outside screening service collect information on applicants. Test applicants for honesty as well as job skills.
- Adopt a strict code of conduct for employees. Make all employees aware of it. The code should include rules regarding employee purchases of store merchandise.
- Inform employees about internal security measures, e.g., surveillance and inventory checks, and the likelihood and consequences of being caught stealing. Many employees steal because they think they can easily get away with it.
- Keep a record of all employee purchases, exchanges, and refunds. Employees should not be permitted to ring up their own transactions.
- Provide lockers for employees. Require that employee's personal property and any store purchases be kept in the lockers during working hours.
- Prohibit employees from wearing or using store merchandise without purchasing it.
- Limit employee access to the building to the hours that they are scheduled to work.
- Conduct inventories often and at irregular intervals. Also make routine spot checks.
- Inspect records of purchases and sales at the beginning and end of each shift.
- Define individual employee responsibilities for inventory control. This establishes a climate of accountability.
- Post signs to indicate areas that are open to the public and those that are for employees only. Install locks on all doors to interior work areas to control public and employee access. Doors to storage and supply rooms, and individual offices should be locked to limit access.
- Have all employees wear ID badges or some other means of distinguishing them from visitors, customers, and others on the premises. Businesses with restricted areas should give their employees photo-ID badges that are color-coded to indicate the areas that the employee is authorized to enter. Offices and storage, supply, and other work areas should be checked periodically for the presence of unauthorized persons.
- Have all visitors in restricted areas be escorted by an employee who is authorized to be in those areas.
- Keep trash dumpsters inside during business hours.
- Check bins at random times for pilfered goods that might have been placed in them for pick-up after the trash is taken out.
- Use clear plastic trash bags. Inspect contents for pilfered goods.
- Keep lids of outside trash dumpsters locked during non-business hours. If practical, keep the lids locked whenever the dumpsters are not being filled or emptied.
- Have employees work in pairs in emptying trash. Or have different employees empty the trash from day to day.
- Centralize the purchasing but keep it separate it from receiving and accounting.
- Control purchase orders by pre-numbering them in sequence.
- Require supporting documentation for each purchase or expense invoice.
- Use pre-numbered checks in sequence.
Use an armored car service if possible. The following tips apply if employees make deposits.
- Vary the times, routes, and methods of concealing the money.
- Make deposits during the business day, not after closing time.
- Assign two employees to make deposits. Vary the assignments over time.
- Leave the area if suspicious persons are present--complete your transaction later.
- Carry the money in a purse or plain bag; never use a bank bag.
- Appoint a key control officer to manage the key and lock system.
- Keep keys in a locked cabinet or a secured area when they are not in use.
- Do not have a master key for all doors. Individual offices and restricted work areas should have separate keys.
- Issue as few keys as possible. Issue them only for areas the employee is authorized to be in. Keep up-to-date records of keys issued.
- Caution employees not to leave keys with parking lot attendants, in a topcoat hanging in a restaurant, or in their offices or work areas. This helps prevent keys from being taken and duplicated.
- Stamp keys DO NOT DUPLICATE.
- Code each key so that it does not need an identifying tag.
- Require departing employees to turn in all issued keys.
- Investigate all key losses.
- Re-key affected locks whenever a key is lost or when an employee leaves the business.
- Consider installing locks that are inexpensive to re-key, or a key-card system in which entries and exits are recorded, codes can be changed easily when a card is lost, etc.
- Seek advice from professional access control system designers.
- Establish receiving procedures that specify where vendors are allowed to park and enter the business.
- Do not permit trucks on the dock until they are ready to load or unload.
- Check all shipments against bills-of-lading. Number shipping orders in sequence to prevent padding or destruction.
- Recheck all incoming goods to prevent collusive theft between the driver and the employees who handle the receiving.
- Do not permit drivers to load their own trucks or take goods from stock.
- Consider installing CCTV cameras on the loading platforms. Locate the monitors where they can easily be seen by supervisors.
- Have separate parking areas for employee, company, and visitor or customer vehicles. The latter are usually closest to the main entrance. Employee parking is usually farthest.
- Park company vehicles in a secure fenced area when the business is closed. If this is not possible, they should be parked close to each other or the building to help prevent gas siphoning, battery theft, and vehicle break-ins.
- Place the company's name or some identification number on all company-owned items, e.g., office equipment, tools, vehicles, and machinery. This can be done by engraving or etching, or by using a permanent adhesive, or by attaching microdots. In small individually-owned businesses the owner's drivers license number preceded by "CA" can be used as a property identifier. In large businesses an Owner Applied Number (OAN) is more appropriate. In San Diego County these numbers can be obtained from the Crime Prevention Unit at the Vista Sheriff's Station at (760) 940-4564. They are coded by state and country and kept on file by law enforcement agencies throughout the country.
- Place numbered confetti in bulk goods containers.
- Contractors can get information on preventing thefts of construction equipment and recovering stolen equipment by calling the Construction Industry Crime Prevention Program at (562) 860-9006
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