Internal Theft 101
Approximately 40% of a company’s loss comes from its own employees
Approximately 4 out of 10 employees are stealing or have stolen in the past year.
Employee theft causes approximately 30 billion dollars every year.
The average employee case is over $1,400
Direct Costs of Internal Theft
Impact company revenue by millions of dollars
Increases customer costs to purchase merchandise to offset these losses
Indirect Costs of Internal Theft
Reduction in sales
Reduction in sales force
Decline in associate morale
Increase in insurance premiums
Damage to the public image of the company
They know the company’s policies and procedures
They are in the stores longer than the customers
They have more interaction with company managers/owners.
They have more opportunity
Financial Pressures
Poor Management Practices
Peer Pressure
Greed
People are Human
Opportunity
How does an employee steal from the company?
Cash / Deposit theft
Refund Fraud
Void / No Sale Fraud
Merchandise Theft
Pass-Offs
Unauthorized Discounts
Credit Card Fraud
Friends always visiting and never buying anything
Always wearing product and not having many employee purchases logged
Requests to work with certain employees / management
Frequents remote areas of store (stockroom, bathroom, etc.)
Looks for reasons to leave store (volunteers to take out trash, etc.)
Refund, void, etc paperwork is not in daily paperwork or has been discarded
Look for suspicious names & addresses / missing information / media without signatures etc
Frequent borrowing from co-workers or any signs of money problems
Lifestyle does not match paycheck
Requests to work with certain employees / management
Improper hiring techniques – references are not done properly
Hiring out of desperation and willing to settle for less desirable candidates
Lack of adherence to policies and procedures
Lack of training
Poor associate orientation – standards and expectations are not clarified
High turnover – no Company loyalty
Lack of accountability
Poor performance reviews
Poor management
Always conduct bag checks
Management must always supervise trash removal
Management must always maintain control of store keys
Do not allow employees to have guests hang out at the store
Audit paperwork daily
Inform employees about internal security measures, e.g., surveillance, exception reports, inventory checks, and the likelihood and consequences of being caught stealing. Many employees steal because they think they can easily get away with it.
Designate area in stockroom where employees can hold merchandise for purchase. Employees can hold merchandise until the end of each day
Keep entire store clean and organized
How does LP know?
Cash / Deposit theft (Sales & LP audit)
Refund Fraud (Exception Reports, LP Audit, Customer Calls)
Void / No Sale Fraud (Exception Reports, LP Audit)
Merchandise Theft (Surveillance, Shops, Cameras, Word of mouth)
Pass-Offs (Surveillance, Shops, Cameras, Word of mouth)
Unauthorized Discounts (Reports)
Credit Card Fraud (Reports)
Identifies data that is an exception to or different from normal business conditions
Reviews all Point of Sale (POS) transactions in a fast, easily maintainable process
Focuses on POS areas of concern with specific stores and / or associates
Provides “quick” means of finding information and track exceptions
How can you report internal theft?
Speak to your Store Manager or District Manager
Call your Loss Prevention Manager
Consequences of Theft
Prosecution
Criminal Record
Employment Record Tarnished
Public Awareness
Your record will follow you through life.
