Employee theft is a problem for all retailers. The California Restaurant Association reports that 95% of all businesses suffer from employee theft in the workplace. That theft can be costly: according to the Association of Certified Fraud Examiners’ (ACFE) 2020 Report to the Nations, the typical case of employee fraud results in a loss of $8,300 per month and lasts an average of 14 months before being discovered.

There are many ways an employee can steal from your business. Employee theft can be as simple as lifting cash from the till when no one is looking or as complex as sophisticated financial fraud. However it is accomplished, employee theft is an issue that is costly to you and demoralising to the honest employees on your payroll.

Preventing employee theft and fraud, then, is essential to maintaining your business’s bottom line. Fortunately, there are a number of steps you can do to reduce the problem – and ensure a more honest workforce.

Hire Trustworthy Employees

Employee theft prevention starts in your company’s human resources department. You can weed out many potential thieves in the hiring process by asking the right questions and performing background checks.

You want to ensure that the people you hire don’t have a propensity for theft. A thorough background check should turn up prior incidents of fraud and theft, as well as any criminal records. Checking references will also help you gain a better understanding of each candidate.

The Society of Human Resource Management (SHRM) found that 40% of employee fraudsters had received at least one prior red flag from the HR department.

Closely Supervise Your Employees

Not all employees are totally honest; if no one is watching, some can succumb to the temptation to steal. To that end, closely supervising your employees – especially those who have ready access to cash – can reduce the incidence of theft. That supervision can be either in-person or via surveillance cameras.

Install a System of Checks and Balances

Employee supervision goes beyond just watching them at the cash register. You need to install a comprehensive system of checks and balances throughout your entire organisation.

This system of checks and balances should include:

• Never giving a single employee control over an entire area of your business – use the buddy system so that each employee can watch over the other.
• Requiring at least two employees to be involved when counting or moving cash.
• Dividing major financial tasks, such as accounts payable and payroll, between multiple employees.
• Making sure that payroll and other disbursements are reviewed and signed off by a senior manager.
• Regularly reconciling bank accounts and credit card statements.

Conduct Informal Audits

The ACFE reports that internal audits catch 15% of employee fraud issues. For this reason, you should conduct periodic unannounced audits of your company's financial records. These should be a mix of internal and external audits.

Create a Confidential Theft Reporting System

According to the ACFE, 43% of all employee fraud comes to light because of tips from other people – half from other employees. Not surprisingly, honest employees don’t like to see dishonest co-workers taking advantage of the company they work for.

For this reason, it’s important to establish some kind of system that employees can use to report theft by their fellow employees. This reporting must be confidential and anonymous. It can be done electronically, via email or web form, via phone, or via a good old-fashioned physical drop box.

Establish a Zero-Tolerance Employee Theft Policy

What happens to employees who get caught with their hands in the till? To send a message to other easily tempted workers, you need a zero-tolerance policy when it comes to employee theft. When you catch someone stealing from you, they need to be fired immediately – and reported to the proper authorities. It may sound harsh, but it’s the only sure-fire way to let your workforce know that you’re serious about employee theft.

Track Your Inventory

To keep dishonest employees from stealing physical goods, you need to closely monitor your company’s inventory. Be on the lookout not just for missing goods but also increases in damaged merchandise. You should also perform periodic audits of your physical inventory, as well as more frequent spot checks.

Deploy a Modern POS System

Manually ringing up sales and handling cash not only makes it difficult to manage sales and inventory, it also provides fertile grounds for employee theft. A state-of-the-art point-of-sale (POS) system automates all transactions and reduces the opportunity for employees to take customers’ cash without ringing up a sale.

Invest in a Cash Deposit Machine

All types of businesses, including retailers, restaurants, and casinos, can benefit from investing in a cash deposit machine, such as Deposita’s Protector series. This type of safe accepts, verifies, records, and secures all cash received.

Employing a cash deposit machine secures all your on-site cash and minimises the risk of opportunistic employee cash theft and plain old human error.

Employ an End-to-End Cash Management Solution

Finally, you can significantly reduce the incidence of employee theft by employing an end-to-end cash management solution, such as that offered by Deposita. A full-featured cash management solution supports multiple departments in your organisation, including operations, finance, IT, and security, helping to reduce the number of cash touchpoints and optimising cash flow.

An end-to-end cash management solution not only reduces the risk of employee theft, it also offers a number of other important benefits, including:

• Reduces the number of people handling cash
• Minimises human errors
• Automates many routine tasks
• Saves time and streamlines workflows
• Provides enhanced security
• Enables robust reporting and analysis

Let Deposita’s Secure Cash Management Solutions Help Prevent Employee Theft and Fraud

When you want to reduce employee theft, turn to the experts at Deposita. Our secure cash management solutions are designed to help businesses like yours improve efficiency and minimise the risk of theft and fraud. We’ve been providing cash management solutions for more than a decade to retailers and other businesses that need to safely and securely collect, handle, and process cash payments.

Book a free consultation today to learn more about Deposita’s secure cash management solutions.