The retail industry lost £61 million through theft by staff in 2017, with the most common internal thefts involving cash taken directly from tills. As a result, it's no surprise that employee theft currently ranks as the fifth largest concern for retailers, beaten only by abuse and violence towards staff, theft by customers and robbery.
Employee theft can be a particularly sensitive issue for retailers, particularly when it comes to independent stores and SMEs. With 20% of all small business losses being caused by employees however, it’s vital to take measures that will protect your business in the long-term.

Identifying employee theft
In many cases, the first inkling that employee theft has taken place occurs when the books don’t balance at the end of the month. No matter the size of your business however, there are some telling signals that employers should be looking out for in order to prevent theft before it happens. Behaviours and activities that are commonly associated with employee theft include:
- Sensitive conversations between employees that end abruptly when supervisors are nearby
- Inconsistencies when employees are explaining errors and mistakes
- A disgruntled attitude, often aimed towards management or senior staff members
- An unusually high number of failed transactions registered in a single shift
- Employees loitering around the business while off-duty
- Frequent shortcuts taken in relation to established security procedures
Swiftly identifying and working to resolve staff issues is often effective in discouraging theft, yet the retail sector recorded more than 10,000 instances of employee theft in the last financial year alone. Although the number of instances is lower than that of customer theft, the average cost per incident is significantly higher. Put simply, employee theft can prove costly for businesses of all sizes.

Tips for preventing employee theft
Improve leadership
Employee theft is directly related to poor leadership. Studies show that higher pay, fewer part-time staff and the introduction of profit-sharing schemes all stand to reduce the likelihood of theft and improve staff morale.
Increase surveillance
It goes without saying that increasing the level of surveillance in-store can be effective in discouraging employee theft. Asking employees to complete cash-in sheets at the end of each shift and installing video cameras close to till points are just a few small steps you can take to better protect your business.
Automate the transaction process
Assuming that employee discrepancies are simply a result of human error can prove costly in the long-term. Automating receipts and integrating your POS system with your preferred inventory management platform reduces the risk of mistakes and gives employees no option but complete transparency.
Focus on feedback
Customer feedback is a valuable asset for all businesses, yet handing out survey cards and asking customers to rate transactions also stands to reduce the likelihood of employee theft. Inviting secret shoppers to your business is another technique to encourage honesty amongst staff, particularly when rewards are offered in return for exceptional performance.
Check your inventory
Keeping a close eye on your inventory and stock levels is crucial if you hope to spot discrepancies early on. Routine spot-checks are a great way to discourage theft, while you’ll also benefit from gaining a better view of how your business is performing.
If you suspect theft, the most important thing to do is not to jump to unwarranted conclusions. Raising the issue with the police should be your first port of call and will ensure the query is dealt with in the correct way.