September 26, 2014
Low-tech solutions for employee theft
Through a special arrangement, presented here for discussion is a summary of an article from Convenience Store Decisions magazine.
While high-tech solutions like high speed video cameras and online monitoring are being increasingly tapped to safeguard against employee theft, other lower tech options, including training, consistent monitoring and setting a tone that puts staff members on notice, still need to be part of the equation.
"I’m sorry to report that c-store employees are still winning the theft war," said Chris McGoey, the principal of McGoey Security Consulting. "It’s the nature of the business that one or two employees have full charge of all the store assets, especially on the swing and graveyard shifts. A small business operator or franchisee simply cannot be there all the time, especially with a 24-hour operation. The business owner must rely on others to properly record sales and watch over the inventory in their absence."
Recorded video also allows operators to monitor store activity in their absence and keep an eye on employees and each transaction made. But employees learn very quickly that the boss isn’t reviewing the recorded video regularly.
"A significant event will occur in camera-view and the boss never asks about it," said Mr. McGoey. "If there is a monitor in the back room, employees quickly learn what the camera can see and where the blind-spots are located. Employees will intentionally change a camera angle, or put a sign in front of it. The employee will disconnect a camera and claim it must be defective. The employee will turn off the digital recorder, or unplug it and commit theft."
To stay a step ahead, Mr. McGoey continued, savvy convenience store operators will routinely spot-check recordings and make relevant comments to employees so they know they are being supervised.
Convenience store operators should also:
- Compliment an employee about how efficiently they handled the 1:30 a.m. rush.
- Request the worker get out from behind the counter when it is slow to clean, dust or front-merchandise.
- Ask about a particular customer or a certain transaction or beer sale ID check.
- Use the video recordings as an opportunity to train employees how to work more efficiently.
"Technology definitely has its place, especially with monitoring trends and patterns of sales and inventory variation," Mr. McGoey said. "But oftentimes low-tech is best. I think it is best to have clearly defined and articulated duties and expectations for each shift so all employees know that they are accountable for the cash and store inventory."
BrainTrust
Recent Discussions
Discussion Questions
What combination of low-tech and high-tech techniques best deal with employee theft? Are stores using high-tech solutions like video cameras and inventory counting to their best advantage?
Poll
Really? To stop theft you “compliment an employee about how they handled the 1:30 a.m. rush?” And you tell them to get out from behind the counter and dust something?
Could there be anything sadder than this article? The “employees are winning the theft war” apparently, and this is our response? Of course we know that employees are a bunch of evil thieving crooks who have to be under constant video surveillance. But then we’re using those same videos to teach them the error of their ways. Yup—that will do it alright.
Gosh, wouldn’t you think that with all our cleverness we’d be able to find just a handful of good, decent, upright, honest, thinking people to work with us? Maybe some day when science is more advanced.
Employee theft has long been illustrated by the use of the theft triangle. Its sides are motivation, opportunity and lack of detection. Technology can certainly impact the employees’ perception regarding the lack of detection and opportunity.
I believe the real difference in most companies is some do a great job at reducing motivation and others don’t. I fall back on one of my first lessons in retail—if you want good employees, treat them good in all senses of the word.
Personally, I think video is the best deterrent, but not every store can afford a system to cover the entire store. And if the boss isn’t reviewing the video consistently, that’s a management issue.
I am surprised employee compensation wasn’t mentioned somewhere in the article.
The short answer to the second question is no.
The combination or introduction of technology matters less than the company’s mindset.
The entire concept of “shrink” isn’t just employee theft. Yes, it is part of it, but it is not all of it.
You get what you talk about.
The owner of the store I grew up working in used to ask the employee to go pick up a dime lying on the floor. As they searched for the coin, he would pick up the bag on the floor in front of their eyes.
You don’t have to request for an associate who is trained, coached and consistently mentored daily to get out from behind the counter.
“Shrink” isn’t overcome by a camera. It is won by leadership.
If a retailer is hiring associates as described in this article, they need to question why they are in the business.
I have to totally agree with Mr. Percy. The article and approach are sad!
Why do people do what they do? When do they feel justified to take some money or an object that is not theirs? When is it OK to cheat? You’ll find some interesting answers and explanations in the research and books of Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. Dan seems to get at the motivations better than anyone else as you will see in his books: “Predictably Irrational,” “The Upside of Irrationality,” and “The (Honest) Truth About Dishonesty.”
My understanding of the compliments or chastisements to employees is to demonstrate that they are being watched. Supposedly, this knowledge will encourage good and more efficient behavior and thwart laziness and theft.
Has this been tested as a reliable deterrent to shrinkage? Are employers relying too heavily on technology to monitor employees rather than taking the time to pre-screen, properly train and mentor them?
Shrink is big business world-wide with highly trained, well experienced people spending time and money to develop the skills needed for success. We must see this as the ultimate competition — every success attacks our bottom line and pushes consumer price inflation.
Allowances for acceptable levels of risk are the first point of attack professionals seek to exploit. Ownership, management and employees lose billions of dollars in available funding for raises and benefits because of shrink, and the single biggest contributor is employee theft.
Removing the ownership of ideals that sponsor practices like “acceptable levels of risk” should be the first step to improve planning, practice methods and technologies that seriously limit or eliminate current theft techniques. To end this we must face it head on and attack it relentlessly just as the criminals behave towards us.
I would agree that there are human techniques that have nothing to do with technology that can help prevent internal theft — leading by example; constantly talking with staff as you walk the sales floor and back room areas. Acknowledge them. Ask them for help, constantly and consistently, especially those whom you think may have a propensity to be dishonest.
Always being visible and proactively engaging with staff doesn’t cost a dime and is often as effective as high-end security equipment.
Anyway, the best solution to (minimizing) shrinkage starts before the door is unlocked. Don’t hire the types of people most likely to engage in it in the first place. It’s probably never going to be eliminated entirely. We’ll always be subjected to meaningless statements like “winning (or losing) the war” — so people looking for a buy-it-and-forget-about-it quick fix will be disappointed.
Trust, empowerment and education in an atmosphere of positive camaraderie is the best solution. We see this thriving in places like Whole Foods, Sprouts, etc.
Technology is only as good as the people behind it. Advanced video analytics has made some headway but human oversight and followup is needed. People and process are needed to complement technology.
The best way to combat employee theft is to let the employees police themselves. Offer a hefty portion of any incentive pay toward the reduction of shrink. My experience has been that the damaging shrink is usually due to employees selling product to buddies at greatly reduced prices. This is especially true in operations where merchandise is rung and not scanned. If employees miss a large part of their bonus due to shrink, they will figure out who is causing the problem and fix it.
Of course, the incentive has to be meaningful — if I’m only going to lose $10, then why bother? Often incentives can be bartered or provided by vendors in exchange for promotional support.
When people don’t value their employment, are treated poorly and paid slave wages, you have lost before you open the door.
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Really? To stop theft you “compliment an employee about how they handled the 1:30 a.m. rush?” And you tell them to get out from behind the counter and dust something?
Could there be anything sadder than this article? The “employees are winning the theft war” apparently, and this is our response? Of course we know that employees are a bunch of evil thieving crooks who have to be under constant video surveillance. But then we’re using those same videos to teach them the error of their ways. Yup—that will do it alright.
Gosh, wouldn’t you think that with all our cleverness we’d be able to find just a handful of good, decent, upright, honest, thinking people to work with us? Maybe some day when science is more advanced.
Employee theft has long been illustrated by the use of the theft triangle. Its sides are motivation, opportunity and lack of detection. Technology can certainly impact the employees’ perception regarding the lack of detection and opportunity.
I believe the real difference in most companies is some do a great job at reducing motivation and others don’t. I fall back on one of my first lessons in retail—if you want good employees, treat them good in all senses of the word.
Personally, I think video is the best deterrent, but not every store can afford a system to cover the entire store. And if the boss isn’t reviewing the video consistently, that’s a management issue.
I am surprised employee compensation wasn’t mentioned somewhere in the article.
The short answer to the second question is no.
The combination or introduction of technology matters less than the company’s mindset.
The entire concept of “shrink” isn’t just employee theft. Yes, it is part of it, but it is not all of it.
You get what you talk about.
The owner of the store I grew up working in used to ask the employee to go pick up a dime lying on the floor. As they searched for the coin, he would pick up the bag on the floor in front of their eyes.
You don’t have to request for an associate who is trained, coached and consistently mentored daily to get out from behind the counter.
“Shrink” isn’t overcome by a camera. It is won by leadership.
If a retailer is hiring associates as described in this article, they need to question why they are in the business.
I have to totally agree with Mr. Percy. The article and approach are sad!
Why do people do what they do? When do they feel justified to take some money or an object that is not theirs? When is it OK to cheat? You’ll find some interesting answers and explanations in the research and books of Dan Ariely, James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of the Center for Advanced Hindsight. Dan seems to get at the motivations better than anyone else as you will see in his books: “Predictably Irrational,” “The Upside of Irrationality,” and “The (Honest) Truth About Dishonesty.”
My understanding of the compliments or chastisements to employees is to demonstrate that they are being watched. Supposedly, this knowledge will encourage good and more efficient behavior and thwart laziness and theft.
Has this been tested as a reliable deterrent to shrinkage? Are employers relying too heavily on technology to monitor employees rather than taking the time to pre-screen, properly train and mentor them?
Shrink is big business world-wide with highly trained, well experienced people spending time and money to develop the skills needed for success. We must see this as the ultimate competition — every success attacks our bottom line and pushes consumer price inflation.
Allowances for acceptable levels of risk are the first point of attack professionals seek to exploit. Ownership, management and employees lose billions of dollars in available funding for raises and benefits because of shrink, and the single biggest contributor is employee theft.
Removing the ownership of ideals that sponsor practices like “acceptable levels of risk” should be the first step to improve planning, practice methods and technologies that seriously limit or eliminate current theft techniques. To end this we must face it head on and attack it relentlessly just as the criminals behave towards us.
I would agree that there are human techniques that have nothing to do with technology that can help prevent internal theft — leading by example; constantly talking with staff as you walk the sales floor and back room areas. Acknowledge them. Ask them for help, constantly and consistently, especially those whom you think may have a propensity to be dishonest.
Always being visible and proactively engaging with staff doesn’t cost a dime and is often as effective as high-end security equipment.
Anyway, the best solution to (minimizing) shrinkage starts before the door is unlocked. Don’t hire the types of people most likely to engage in it in the first place. It’s probably never going to be eliminated entirely. We’ll always be subjected to meaningless statements like “winning (or losing) the war” — so people looking for a buy-it-and-forget-about-it quick fix will be disappointed.
Trust, empowerment and education in an atmosphere of positive camaraderie is the best solution. We see this thriving in places like Whole Foods, Sprouts, etc.
Technology is only as good as the people behind it. Advanced video analytics has made some headway but human oversight and followup is needed. People and process are needed to complement technology.
The best way to combat employee theft is to let the employees police themselves. Offer a hefty portion of any incentive pay toward the reduction of shrink. My experience has been that the damaging shrink is usually due to employees selling product to buddies at greatly reduced prices. This is especially true in operations where merchandise is rung and not scanned. If employees miss a large part of their bonus due to shrink, they will figure out who is causing the problem and fix it.
Of course, the incentive has to be meaningful — if I’m only going to lose $10, then why bother? Often incentives can be bartered or provided by vendors in exchange for promotional support.
When people don’t value their employment, are treated poorly and paid slave wages, you have lost before you open the door.