Reducing Employee Theft
According to Association of Certified Fraud Examiners, the typical business will lose an average of 6% of revenue from employee theft. Approximately 6.5% of revenue losses can be attributed to external theft. According to Retail Council of Canada retailers lose up to $3 Billion a year or $8 Million a day due to theft.
Fred Tarasoff from FJ Tarasoff & Associates, a retail loss prevention company, says that retailers who take a proactive approach towards retail shrinkage can drastically reduce overall loses. Improving the hiring process, diligently following up on reference checks, keeping strict inventory control along with developing effective employee checkouts and cash outs are just a few of the effective methods of positive loss reduction results. But now it appears that perhaps the best method of minimizing internal loss is to provide every employee, even part-timer staff members with shoplift prevention training. “Train your staff in external theft reduction and this action will have better results in internal theft reduction” claims Tarasoff. Even basic training may reduce internal loss between .5 % and 3%, which translates to a substantial savings. This training naturally may have even a greater effect on external losses, notably shoplifting. Retail lose experts believe that when a retailer provides proper on-going shoplift training, it sends a clear message to every employee that the retailer takes shrinkage very seriously and is proactive. When an employee is given a certain level of responsibility, generally the employee will respond and will take a personal responsibility on reducing all forms of loss, including internal theft. Employees will tend to police themselves more effectively.
Although some larger retailers conduct in-house training programs designed and administered by their own internal security department. Most small to medium sized businesses either bring in security experts to conduct annual workshops or have chosen online loss reduction programs. Many of these programs are highly effective, easy to access and cost effective.
Shrinkage can cost retailers tens, sometimes hundreds of thousands of dollars in lost revenue. Although it may be impossible to fully eliminate all forms of employee theft, following a few simple strategies can definitely help to reduce those losses.
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