Shrinkage… inventory missing because of shoplifting or sticky fingered employees…costs US retailers about $42 billion a year, according to the latest Global Retail Theft Barometer. Billions can be hard to grasp, so think of it this way- all of those missing goods cost each American household $403 a year as retailers pass on their theft related losses.
Shoplifters surely cause most of this - right? Well, in the rest of the world, that is the case. But here in the United States, it turns out that dishonest employees are the biggest threat. The Barometer found that employees are responsible for 43% of all lost revenue. They take $2.3 billion more than what’s taken by good old fashioned shoplifters.
The most stolen items are clothing, mobile phone accessories, power tools, wine and make-up. Not all employees physically take products out of the store; they can also steal from a retailer through more subtle actions at the cash register. They can put in discounts, void transactions or change prices, all of which take money out of the owner’s pocket.
These numbers were seen in all kinds of retail stores, from large national corporations to small boutiques. So what are business owners to do? The first step is recognizing that this is a problem. As much as you want to trust your employees, things can happen. There is temptation.
Next, don’t skimp on background screening for all of your employees, and consider a more extensive check on those who have access to financially risky areas of your business. You should have a zero tolerance policy; anyone who is found stealing or cheating the system has to go. There is no room for a slippery slope when your financial life is at stake. You should also find partners to help you catch problems before they get out of control. That could mean a screening partner, as well as a second set of eyes on the accounting and inventory control systems.