The National Association of Convenience
Stores estimates that vendors account for between 15 and 20 percent
of in-store shrink.
Delivery shortages are common.
Convenience Store News market research
calculates the percent of sales lost as a result of shrink in 1997
was 2 percent for both traditional and oil retailer stores.
Combining information, vendor theft
costs traditional from $1,695 to $2,260 per store and oil retailers
from $1,320 to $1,760 per store annually. Source: Convenience Store
The National Retail Merchants Association
states that the growth of internal theft is on the rise and accounts
for 60% to 70% of all loses.
The Insurance Institute of America
indicates that 65% to 75% of all merchandise loses come from inside
stealing by employees.
The Wall Street Journal stated "customer
and guest pilferage is penny ante compared to what is being stolen
According to the New York Times "most
employers estimate that 72% of their shrinkage is employee related."
An official from the S.B.A. (Small
Business Association) indicates that "as high as 25% of all businesses
that go down the tubes, do so as a result of employee theft."
- Your employees are 15 times more likely to steal from
you than your customers.
- Otherwise honest employees stole $160 billion last
year by wasting time on the job.
- Every day, businesses lose $70 million to theft.
- Employees steal, on average, $919 annually from employers.
- According to the U.S. Chamber of Commerce, one out
of five business closures are caused by employee theft.
- Loss prevention executives attribute 38.4 percent of
their annual shrinkage losses to employee theft, according to the University
of Florida's Security Research Survey.
- According to the U.S. Justice Department, internal
theft costs American businesses more than $60 billion each year.
- On a per-person basis, dishonest employees steal approximately
8.6 times the amount stolen by shoplifters ($847.81 vs $98.56).*
- On a per-company basis, one in every 23.7 employees
was apprehended for theft from their employer (based on over 2 million
Are you at risk?
- Do you neglect to check out your employees' references
and job histories?
- Do you conduct inventories on an infrequent basis?
- Are the keys to your building easy to duplicate?
- Does your building have exterior windows and doors
through which merchandise and equipment can be removed?
- Does a single person handle any sensitive job functions,
such as purchasing, receiving and accounting?
- Do you trust some employees more than others?
- Is there a possibility that equipment or products could
be hidden for later retrieval by a thief?
- Screen all employees before hiring them - the best
defense against internal theft is to hire honest people.
- Watch for warning signs. This may include employees
who: seem to live beyond their means, often violate company policies,
have a substance abuse problem, are chronic liars, seem immature or
troubled, may have cause to feel wronged.
- Never have fewer than two people close up the building
- Have all keys distributed to employees engraved with
the words "Do not duplicate."
- If applicable, require sign-in and out of company equipment.
- Adopt a zero shortage policy (inventory, cash, etc.)
and stress shortage control even if losses diminish.
- Limit pricing authority to a small group of employees.
- Use shipping and receiving reports that are numbered
in sequence to prevent recording of fraudulent payment and the alteration
or destruction of shipping orders.
- Prosecute thieves rather than settling for an apology.
*Statistics from Jack L. Hayes International, Inc.; with
offices in Fruitland Park, Florida and Buenos Aires, Argentina, has been
in the Loss Prevention/Security consulting business for 22 years, and
is recognized on an international level as the foremost loss prevention/inventory
shrinkage control consulting firm in the world. http://www.hayesinternational.com