Canadian Survey Results Reveal that Employees Steal 33% of all Retail Goods
According to a 2012 survey conducted by PwC and the Retail Council of Canada, Canadian retail store owners reported that over 33% of their yearly shrinkage came from internal theft. Internal theft is a term to describe employees who steal from their employers. In 2008, internal theft accounted for only 19% of retail losses, indicating a percent increase of 75.8%. This high percentage increase further proves that retail owners need to be diligent in both their employee screening methods and security efforts.
There are several ways that employees are stealing from their employers, including Sweethearting and cash register theft. Sweethearting occurs when an unauthorized employee gives away free- or significantly discounted- merchandise to a customer (usually a friend or family member) at the cash register. Retail business owners fail to realize that the majority of theft happens at this location. Cash register theft is another daily threat that store owners need to keep in mind. Sales managers and associates, and cashiers who perform transactions are responsible for counting money in the register and reporting any overages/shortages. Without the proper security tools, employees are more tempted to steal money-- especially when it's already in their hands.
Paul Beaumont, who serves as Director of PwC Retail Consulting Services, explains that internal theft can easily go unnoticed: "In years gone by, external theft may have been assumed to represent a certain percentage of total shrink, and I think there may have been some internal theft that was blended into that, so there was not the level of visibility that there is today." Retail shrinkage has accounted for nearly $4 billion dollars in losses for Canadian retailers in 2012, a whopping amount of money that has been either stolen by employees or shoplifted by external thieves.
Surprising as it is, external theft (i.e. shoplifting) has become less problematic for Canadian retailers than it once was in 2008 at 65%. Today it's down to 43%. These findings will force retail owners to think twice not only about the employees they hire, but how they execute security measures inside their stores. Properly stationing cameras in strategic areas inside of the store will help catch employees who do decide to steal or give out unwarranted discounts to friends and family members. Video surveillance cameras should always be installed near break rooms, in kitchenettes, and above the cash register, in addition to ingress and egress points.