Protect Your Business From Theft
March 1, 2017
By Eduardo Landeros
One of the many things business owners need to worry about and control is the loss incurred in any business due to theft. Experts estimate that retailers in the U.S. lose about $60 billion a year, an extraordinary amount that can be prevented in some ways.
Many people think that business owners need to worry about thieves and customers stealing from them but you also have to worry about vendors and employees. Yes, employees are one of the major reasons why business owners experience theft.
Think about it, the people who know your business very well, which are your employees, are the ones that can potentially steal a lot from you. They know your weaknesses and know when people come in and out. Where everything is stored and where valuable things are located.
It is very common in the food industry to have managers and owners search employee’s bags before leaving the restaurant because it is known for employees to steal food and liquor. Many Bars even have liquor bottles under lock and key to prevent theft. Another way of stealing is when employees give “freebies” or discounts to their friends or for themselves without paying for them.
Same goes for other industries where tangible products are being sold. Employees can steal and sell these products outside the business. In today’s world, it is very easy to sell things such as such as construction materials, food products, auto parts online via eBay or craigslist.
This could also be applied to the service industry. I’ve read articles on hotel employees renting out rooms “on the side” without management’s knowledge. They have agreements with the cleaning staff and share the profits without management ever knowing about it.
Suppliers are also something to worry about. When I was in business banking, I had a client who sold seafood products on a wholesale capacity and he would tell me stories about how competitors would establish agreements with management to deliver one product and charge for a different product. Shrimp was a good example. Shrimp comes in various sizes, small, medium and large. So the supplier would bill the client for large shrimp when in fact he was delivering medium size shrimp, and the difference was shared between the receiving employee and the supplier’s employee.
Another way vendors can steal from you is when they sell you a pound of something and they are in fact giving you 80 percent of that net weight. If the business owner or manager does not check, they can steal from you and you can lose a lot of money in the long run. I have also heard stories about vendors from different companies meeting in some parking lot to exchange product such as potato chips for beer, or bread for wine etc. Thieves can definitely get creative.
Customers are also something to worry about, especially the professional thieves. It is very easy to steal product if management and employees are not watching. Or how many times have heard about identity theft where people use other people’s credit cards and charge them. At the end of the day, the business ends up paying for that because the true credit card owner will reject that charge and the chargeback will come to the business owner. The product is gone and nobody paid for it.
But there is light at the end of the tunnel. If you are aware of the possibilities and establish a set of policies in your business to help protect you against theft you can minimize the risk of becoming a target. There are many things you can do to keep an eye on your employees, suppliers and customers.
A good way to control this is by having security cameras. If an employee and/or customer knows somebody is watching them the likelihood of them stealing from you decreases. A good policy to have also is to have managers check every shipment that comes into the store/business. Make sure they are selling you what the invoice says and check it thoroughly.
Another way to prevent theft is by doing background checks on your employees before hiring them. You should also establish levels of authority especially when it comes to cash. One employee should not have control of all the cash that comes in. One should receive it, another one should deposit it and another one should record it. Segregation of duties is important to avoid fraud.
It is hard to believe that so many people can steal from you but it’s the reality. A good business owner should be aware of this and establish processes and policies to prevent theft as much as possible.