Billions of dollars are lost and stolen annually from businesses, because of employee theft. Employee dishonesty and theft costs U.S. business over $50 billion dollars annually.
National estimates show that 75% of all employees steal from their employers at least once throughout their careers. The same statistics show that at least half of these 75% steal multiple times from their employer. It is plain to see that the businesses of the United States cannot continue to function if they let employees steal from them.
Definition: Employee theft – any stealing, use or misuse of their employers assets without permission to do so. To further add to this definition it is also important to point out what employees normally steal from their employers:
Money Money is one of the most common assets that are stolen from employers.
Theft of time Theft of time occurs when an employee is paid for time which they did not work. Usually this happens through the falsifying of time records. Technically theft of time can also include employees who are not working while on the job, though legally this is more difficult to prove.
Theft of supplies Theft of supplies is another prevalent form of employee theft. Common examples of this form of theft are office supplies (paper, computers, cabinets, etc.) and restaurant supplies (food, condiments, silverware, etc.).
Think your employees would never steal from you? Think again. According to a 1999 study done by the National Restaurant Association, employee theft averages $218 per person each year. The average takeout and delivery pizzeria has 20 employees. The math says thats $4,360 right out of your pocket annually. Worse yet, security experts call that estimate conservative. According to the Association of Certified Fraud Examiners, occupational fraud costs the average business $4,500 per employee annually. "Multiply that by the 8,553,000-plus restaurant employees in the United States and the annual loss in the restaurant industry alone exceeds $38,488,500,000," said Denise Bayless, promotions director and sales manager for Freedom Systems Midwest, an Oak Park, Mich., maker of digital surveillance systems. "The total national loss to occupational fraud is over $400 billion, and the restaurant industry claims over 9.5 percent of the total."Freedom Systems Midwest
But youre employees are different; theyre honest, hard working and trustworthy, right? Meantime, your food cost oscillates without rhyme or reason, and based on sales, you should have at least one more case of wings in the freezer than you do. Are you a few wings short of a party pack, or is your inventory simply flying out the back door hidden in hot bags and trash cans? The good news is youre probably not losing your mind. The bad news is you are losing profits!
Theft of merchandise and company property Theft of merchandise refers to products that are to be sold. A good example of theft of company property is product displays.
Sellers of video surveillance systems say operators used to buy their products to protect against thieves who might rob the store. Now ops want the cameras to catch the crooks within.
Overcharging customers and then pocketing the extra cash This can drastically affect a business reputation, because it affects not only the employer but the customers as well. If the customers find out that a business is overcharging them it can hurt that business public relations. This is very common in restaurants because most private restaurants do not keep a close eye on their employees actions.
Causes of Employee Theft Rarely do most employees steal from their employer because of need. Thefts usually because an opportunity to do so has presented itself. It stands to reason that an employee will only steal from their employer if the chances of getting caught are low.
There are many other basic reasons why employees steal: Low morale at the workplace. This is also a major reason why businesses suffer from low production. The employee feels that the business or company has wronged or mistreated them in some way. The employee feels that they are underpaid [and under-appreciated] for the "hard" work they do. The consequences for theft are minimal. The company has no punitive procedures or policies regarding employee theft. If there are no set consequences to employee theft then employees will continue to steal, because they think that they wont be punished. Lack of control over inventory. It is easy to steal because the employer does not have preventive measures to stop them. Preventive measures are crucial to reducing the risk of employee theft. If preventive measures are not existent then the opportunity to steal is very high.
The best way to prevent Internal theft is, to always be aware that it can and does happen. Fooling yourself into thinking it isnt, is the most costly mistake you can make. Things to do at the store level: 1. DVR or camera system – Major strides in new equipment and lower costs. Even fake systems are good deterrents. 2. Monitor sales and paperwork religiously - Product usage, labor %, coupon and Free meal tracking. 3. Constantly checking and monitoring cash in hand and cash handling procedures. 4. Regular Unannounced spot checks on #s 2 and 3.
Wristbands Better Carhop and order tracking Log-in tracking for order-taking and override exceptions Long term ticket tracking – including cancelled, recalled and started orders not totaled Video tracking connected to order-taking