Retail theft by employees and customers has a huge emotional and financial cost on any retail business.

Here at Tower Systems we have years of experience in helping small business retailers detect theft, leverage police engagement and reduce the cost of theft.

Too often, we see small business retailers only act on theft when they see it, once it has happened.

Our advice to small business retailers is to be proactive to reduce the cost of theft.

Our recommended key strategies to prevent and detect theft:

1. Robust stock control:
   • Track all inventory in and out of the business.
   • Regularly conduct sport stock takes.
2. Strict cash handling procedures:
   • Have a zero-tolerance policy for cash discrepancies.
   • Conduct unexpected cash counts and audits.
   • Reconcile bank deposits daily.
3. Employee monitoring and management:
   • Tell every prospective employee you will do a police check.
   • Have a code of conduct: outlining acceptable behaviour re discounts and anything cash related.
   • Rotate staff duties to minimize opportunities for collusion.
4. Leverage retail software:
   • Use the theft mitigation tools in your POS software.
   • Use the AI theft tracking tools regularly.

Additional tips:

• Nurture a good culture: Positive and professional.
• Train: Educate staff on theft prevention and detection techniques.
• Invest in security: Smart POS software, cameras etc.
• Be vigilant: Pay close attention to customer and employee behaviour.
• Consider transparency: It could be that by sharing details on the performance of the business you deter an employee.

Here 12 proven steps to cut retail employee theft:

1. Scan everything you sell.
2. Spot stock take items in high demand.
3. Use your POS software to balance at the end of shift every day.
4. Have a security camera over each register.
5. Check GP by department. If GP is falling outside what you expect, research it further.
6. A no employee bags at the counter policy. This makes it harder for them to hide your cash.
7. Beware employees who carry folded paper or small notepads. These can be used for them to keep track of how much cash is in the register that is theirs – i.e. not rung up in the software.
8. Beware of calculators with memories at the counter.
9. Do spot cash balancing. Unexpected checks can uncover surprises. One retailer needing to do a banking during the day uncovered a $350 discrepancy that leads to discovery of systematic theft.
10. Setup a theft policy. Put this on a noticeboard in the back room. Get staff to read it and sign up to it.
11. Do not let employees sell to themselves. If they want to purchase something make them purchase it from the other side of the counter.
12. Be professional in your management. The more professional your approach the less likely your employees will steal as they will see the risk of being caught as high.

By adopting what we have suggested here and leveraging the power of retail software, small business owners can significantly reduce the risk of theft and protect their bottom line.

Now, here is our suggested theft policy for local retail businesses:

THEFT POLICY OF THIS BUSINESS

1. Theft, any theft, is a crime against this business, its owners, employees and others who rely on us for their income.
2. If you discover any evidence or have any suspicion of theft, please report it to the business owner or most senior manager possible immediately. Doing so could save a considerable cost to the business.
3. We have a zero-tolerance policy on theft. All claims will be reported to law enforcement authorities for their investigation.
4. From time to time, we have the business under surveillance in an effort to reduce theft. This may mean that you are photographed or recorded in some other way. By working here, you accept this as a condition of employment.
5. New employees may be asked to provide permission for a police check prior to commencement of employment. Undertaking the police check will be at our discretion.
6. Cash is never to be left unattended outside the cash drawer or a safe within the business.
7. Credit and banking card payments are not to be accepted unless the physical card is presented and all required processes are followed for processing these.
8. Employees caught stealing with irrefutable evidence face immediate dismissal to the extent permitted by labour laws.
9. Employees are not permitted to remove inventory, including unsold, topped, magazines, unsold cards or damaged stock from the store without permission.
10. Employees are not permitted to provide a refund to a customer without appropriate management permission.
11. Employees are not permitted to complete sales to themselves, family members or friends.
12. Every dollar stolen from the business by customers and or employees can cost us up to four dollars to recover. This is why vigilance on theft is mission critical for our retail store.

PLEASE SIGN AND DATE YOUR ACKNOWLEDGEMENT:

These strategies are about preventing loss and building a culture of accountability and integrity.

For any policy to be effective, it must be applied consistently and fairly across the business. This consistency sends a powerful message that reinforces trust.

Ultimately, creating a secure retail environment protects not only your assets but also the livelihoods of your honest employees, ensuring the long-term health and success of your business.