Awareness Training

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


People are Human


How does an employee steal from the company?

Cash / Deposit theft

Refund Fraud

Void / No Sale Fraud

Merchandise Theft


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


Criminal Record

Employment Record Tarnished

Public Awareness

Your record will follow you through life.