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Stop Shrink: How to Tell if Employees Are Stealing

Stop Shrink: How to Tell if Employees Are Stealing

Do you know how to tell if employees are stealing? When you’re running a business, you spend a lot of time focused on preventing theft. You ensure that you have high-quality locks on your doors and keep all extra money in the safe in your back office. You install security cameras to keep an eye on less-than-honest customers. You train employees to keep an eye out for people who may be stealing from you.

But what if the people who are stealing are the employees themselves?

According to Statistic Brain, U.S. businesses lose approximately 7% of their annual revenues to theft or fraud. A whopping $50 billion of that theft happens due to employees. Surprisingly enough, 75% of employees have stolen from an employer at least one time in their lives.

It’s important to know how to tell if employees are stealing so that you can protect your business from internal threats as well as external ones.

How to Tell if Employees Are Stealing

We often think of employee theft as the most basic kind of stealing — putting merchandise in a bag and leaving for the day without paying for it or taking money from the cash register. While these are common methods of employee theft, there are other ways that workers take financial advantage of their employees.

Buddy Punching. What sounds like a friendly game between friends is actually a scam that costs you money. Also known as time theft, buddy punching happens when an employee fills out time cards for periods in which they weren’t actually working. If your business has a physical time clock or scanner, some employees will have a buddy swipe or punch their time card for them. Many employees don’t think of this as stealing, but theft of time costs you money.

Stealing Checks. When it comes to company checks, it’s hit or miss as to whether the bank will check the identity of the person cashing it. This leaves an open window for employees to take money right from your bottom line.

Theft of Company Data. This can include private customer information, as well as financial records or design plans. If employees have access to your back office, computer systems, or files, your information could be at risk.

Stealing Inventory. When you have records that indicate that you paid for inventory that has since disappeared, it may be an indication of an employee theft problem.

How to Prevent Employee Theft

Unfortunately, employees who are determined to steal are incredibly resourceful. You have to be equally resourceful and diligent in order to prevent shrink. Here are a few ways to track and prevent loss.

Careful Accounting. Business owners know that a company won’t run itself. Unfortunately, when it comes to preventing employee theft, you need to be even more involved — having an in-depth knowledge of your company’s operations and exact numbers. This means reviewing bank statements to see which checks have cleared, tracking the number of voids for each cash register, and taking frequent physical inventory of your stock.

Access Control. An excellent way to protect company assets is to install a security system that monitors access to financial offices and back doors where inventory is delivered. An access control system operated by key fobs or passcodes can do more than just control who comes and goes — it can record who enters and exits and when they do it. It can even restrict access to key rooms to only certain times of the day.

Video Surveillance. One of the strongest weapons in your anti-shrink arsenal is to make sure your security system includes video surveillance. First, security cameras act as a deterrent to anyone thinking of committing a crime. Second, they provide a way to keep tabs on the many ways that an employee could steal from your company. From monitoring shoplifting and inventory theft to documenting who shows up for work and what’s going on in the back office, a comprehensive security camera network will keep an eye on things even when you can’t.

That last bit is important. Modern security systems feature remote access through smartphone apps. These give you the ability to access your security cameras from afar and check in to see what’s going on when you’re not there. Hopefully, this knowledge will discourage any bad behavior amongst your employees. If it doesn’t, however, the video evidence will be enough for you to identify the culprit and get rid of them once and for all.

Understanding how to tell if employees are stealing is only part of the battle. Once you’ve put systems in place to document criminal behavior, you’ll be better prepared to protect your company and its assets as you move forward and grow.


At ProTech Security, we have a strong history of experience, innovation, and customer service. The ProTech Security Advantage is more than 30 years of service in Northeast Ohio and a strong commitment to providing quality, cost-effective protection for homes, businesses, educational institutions and government facilities. To see what ProTech Security can do for you, contact us today.

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