How Retail Businesses Can Prevent Internal Theft

A recent report from Retail Knowledge stated that U.S. retailers are losing $60 billion a year due to internal theft or “shrink” – up from $57 billion in 2014. Also, in the same report, entitled “US Retail Fraud Survey,” it was found that employee theft was the single biggest cause of loss to retailers. “Overall the biggest area of store loss remains employee theft with 38% of respondents citing it as the number one area of store loss,” the report stated.

The study represents 91 retailers with annual sales totaling $844.6 billion, which lets us know that the 38% of respondents citing employee theft as their number one area of concern is no small group.

“There’s a desire for employee theft that often occurs because of the items that they have in retail stores. You know, a friend may come in and ask an employee for a “sweetheart” favor,” said Tony Gallo, the current Senior Director of Sapphire Risk Advisory Group and former Director of Loss Prevention and Safety for EZCorp. “Or if there’s a large amount of cash there, the desire and temptation (to steal) is substantial.”

So, what actions can retailers take to eliminate or even just reduce employee theft? The first is to make an investment in a professionally installed security system.

Installing a security system based around video surveillance allows suspicious activity to be monitored… before it turns into something more. With a professionally installed CCTV video surveillance system, a business owner can keep tabs on his or her employees within the guidelines of the law. With the system in place, a retail business owner can not only prevent internal theft by holding employees accountable, they can catch slip and falls; enhance security with visual identification, detect and record exits; and protect and safeguard the business. All it takes is a network of cameras placed behind the cash registers and at every focal point within the store.

One of the most important factors involved with retail security revolves around how video is actually recorded. It’s essential to make the move from analog to digital video recording to protect key areas of concern. Most professional security companies have moved on to state-of-the-art digital video recording systems that offer maximum protection and numerous benefits. These benefits include high definition video recording; real-time recording across multiple sites; quick retrieval of video data; and unattended archiving, among other things.

CCTV for businesses

Remote Monitoring

A retail business owner could even utilize remote monitoring, which involves IP-based video surveillance systems that use a local network and the Internet to transmit and store digital images. This allows business owners to monitor video data from virtually anywhere with an internet connection, at any time. The ability to monitor a single site or multiple locations remotely helps streamline operations, increase productivity and, most importantly, reduce costs. Off-site archiving of recorded video enhances on-site security by preventing local system tampering.

Practical Steps

While these technical security system strategies are the most effective ways to prevent theft, there are also some practical steps that store owners can take to further prevent employee theft, as Gallo explained.

“If you hire an employee and they work in a store and the bathrooms are in horrible condition, or the lighting isn’t good for them to work in, what you’re telling that employee is that you really don’t care about your location, so why should they?” said Gallo.

If you as a business owner treat your location with respect, your employees will likely follow suit. Gallo also emphasized the importance of training employees on how to properly greet and interact with customers in order to let the customer know that he or she is being watched.

“Probably the most important thing in any retail location is good customer service. In my 30 years, there is nothing that I have ever seen that beats good customer service. If you have a store where the employees are engaged and they approach other people when they come in, the employee is really doing two things,” Gallo said. “First, they engage that customer and they send a message to that customer that they have been seen. A lot of times you’ll look at a retail store and notice that when a customer walks in, they aren’t even acknowledged. I recommend going a step further to the point where an employee might say, ‘that’s a nice shirt you have on,’ or ‘I like that hat,’ or something like that. What they are then saying to the customer at that point is ‘I actually see you’ and the last thing a burglar wants people to do is actually see them.”

Training your employees to interact with the customer develops a strong sense of accountability on both ends of the spectrum. With the proper system in place, both your employees and customers will respect a store more and as a result, treat it with more respect. Pair these practical tactics with a professionally installed CCTV video surveillance system and drastically increase the security of your retail business.


Contact us for a security quote!