It’s a hard thing to consider. You create your business from scratch, pour your heart and soul into it, and trust the staff members you hire. But sometimes that trust is violated. We’re referring to internal theft, and it’s a bigger issue for any small business (and even big companies) than most realize.
It is not only a matter of losing a few dollars, but it can really affect your bottom line and, just as importantly, the morale of your employees.
At Alcatraz Locksmith, we understand that true theft prevention is more than just stopping theft from the outside. You also need intelligent loss prevention from within.
What is Internal Theft?
In short, internal theft happens when workers steal business assets for personal gain. This employee theft or employee dishonesty can take many forms. Aside from blatant theft of cash (a common type of theft), watch out for:
- Inventory theft: Merchandise or material missing. This is a big issue in any retail setting, affecting operational efficiency.
- Time theft: Receiving payment for unworked hours, impacting how well your business runs.
- Payroll theft: Bogus employees or overstated pay.
- Theft of sensitive data: Such as business secrets or customer information.
Staff who steal tend to know your blind spots, where CCTV cameras might not see, or if your inventory software isn’t strong. So, loss prevention measures are ESSENTIAL.
Why Good People Sometimes Do Bad Things
It’s easy to see dishonest employees as just “bad apples.” But sometimes good people make bad decisions. They may be under plenty of pressure – perhaps they are having money problems at home. Or perhaps, they spot an easy target and believe they won’t get caught. Sometimes they try to tell themselves it’s okay, saying things like “the company owes me this” or “everyone else does it.”
Knowing this does not forgive unethical or dishonest acts. It just shows that the BEST way to prevent theft is to reduce the chance and temptation for it to happen in the first place. It’s less a catch-the-crook approach than building a system where it’s harder for employees to go off track.
Establishing a Culture of Transparent Rules and Trust
A positive work environment is a powerful shield. Build a culture of integrity and honesty through employee training. This, paired with clear company policies, makes a big difference. Make sure your policies clearly explain what theft is (including inventory theft, time theft, cash theft, and payroll theft), proper cash handling (including for credit cards at the point of sale), use of company property, and the consequences for breaking these rules, UP TO CRIMINAL CHARGES.
Train your employees. Make sure everyone knows these rules and feels safe reporting suspicious behavior or wrongdoing without fear of payback. Positive workplace culture makes this easier to achieve.
Smart Security Measures
Alright, so let’s discuss the nuts and bolts – the physical security steps you can take. This is where good systems and locks earn their keep. All these physical security steps are about making theft more difficult.
- Access Control: This means controlling who can go where or use certain things. It can be as simple as good locks on doors and cabinets, or as advanced as key cards or codes. Who really needs access to the stockroom, cash office, or sensitive computer files? The fewer people who have access, the lower the risk.
- Surveillance Systems: Nobody likes the feeling of being watched, but visible security cameras can be a strong deterrent. They send a clear message that someone is watching. And if something does happen, surveillance systems provide valuable evidence. They are a natural part of complete security systems.
- Cash Handling Procedures: If your business handles cash, you need strict rules. This can include things like:
- Having two people present when dealing with large amounts of money.
- Making regular bank deposits so that you don’t have too much cash on site.
- Using a safe that’s, you know, safe! (We here at Alcatraz Locksmith know a bit about those!)
- Daily checking and balancing of cash drawers.
- Being careful with credit cards and how their data is handled.
- Inventory Management: You should know what you have. Good inventory management helps you see if things are going missing. This can be done with regular physical counts or by using inventory management software or systems. These software options can track what comes in and what goes out, making it easier to spot when numbers don’t match.
- Point of Sale (POS) Systems: Modern POS systems are great tools. They track every sale, return, and void. Review your transaction reports daily. Are there many “no sale” rings? Are returns being done without a customer there? These are potential red flags.
These security systems work best when they work together. It’s all about creating layers of protection.
Identifying Suspicious Behavior
Even with the best systems, you also need to stay alert. Teach yourself and your key managers to watch out for suspicious behavior or changes in employee attitudes that might signal a problem. Here are some common red flags that could point to dishonesty or suspicious activity:
- An employee suddenly living a much more expensive lifestyle.
- Someone who never takes a vacation (perhaps they are afraid someone else will find out what they are up to).
- Cash drawers that are often short or over.
- Missing paperwork or records for transactions.
- Employees who seem secretive about their work or get defensive when asked questions.
- Merchandise or items disappearing faster than they should.
Noticing these things doesn’t automatically mean someone is stealing. But they are warning signs that you might need to pay closer attention.
How to Deal with Suspected Theft
If you suspect theft, it’s crucial to handle it carefully and correctly. One wrong move could land you in legal trouble. First, don’t jump to conclusions. Contact legal counsel and start a quiet and thorough investigation. Gather any evidence you can find, like security tapes, records, or inventory reports.
This is where you DEFINITELY need solid legal advice. Get legal advice BEFORE accusing anyone or taking any action. Legal advice can tell you the right steps to take, which might include reporting it to the police and possibly pressing criminal charges.
Sometimes, businesses hire fraud examiners. These are experts trained to investigate financial dishonesty. The Association of Certified Fraud Examiners is a good source of qualified people.
You need to stay neutral but also protect your business and make it CLEAR that theft won’t be tolerated. Taking legal action is a serious step, so get good advice.
Your Security Partner
For small business owners, this can all seem overwhelming. At Alcatraz Locksmith, we don’t JUST do locks; we help with overall security measures. Whether you’re a small shop or a larger company in Phoenix, dealing with internal theft protects your assets and your team.
Give us a call to help create a more secure future for your business.