Outside Insights | May 2008 | By Guest Author

Preventing Employee Theft

A POS-integrated surveillance system can save operators time and money when tracking down a thief, but it often prevents theft in the first place.

According to industry experts, employees most likely to steal or treat cash handling carelessly are those in the lowest income strata with the greatest access to cash, who tend not to stay with one employer for very long. In short: a typical quick-service employee.

To catch an employee stealing is challenging, costly, and time-consuming, and when it happens, it is equally difficult to present the physical evidence that proves the theft. Without it, though, the operator risks a wrongful accusation lawsuit even if he was correct in his suspicions.

The best way to avoid that type of situation is to use technology to eliminate the opportunity for theft.

What to Look For

The biggest opportunities for theft occur at the point-of-sale (POS) terminal. The most common method is to wait for a customer to pay with exact or nearly exact change and simply ring a no-sale and pocket the cash. According to the Crime Prevention Service at Rutgers University’s School of Criminal Justice, some of the other ways employees can pilfer cash at the POS is by under-ringing sales and “sweetheart” deals.

Why Employees Steal

A common misperception is that workers who steal are ethically challenged to begin with, and as long as operators insert controls at the hiring process, they will be able to avoid bad apples. The reality is that internal thefts usually occur not because an employee is ethically challenged (and planned to steal before even being hired), instead they find an irresistible opportunity to steal with little risk of being caught. Statistics indicate that about 20 percent of the workforce is either dishonest at the core or totally honest, about split evenly. The remaining 80 percent are essentially honest but have the potential for dishonest behavior. Add rising living costs and stagnant wages levels for lower-tier earners and the threshold for an otherwise honest employee to commit theft is be much lower than many believe.

The reality is that human behavior will always be the unknown x-factor and trying to defeat employee theft solely by managing it can prove to be difficult, expensive, and ultimately unsuccessful.

As a result, the objective is to use tools to increase the element of risk and eliminate the opportunity to steal.

How to Stop It

Although employee theft is an HR problem, one of the most effective solutions lies not in human interaction or manipulation, but in technology. More specifically, digital video recorder (DVR)-based surveillance camera systems which record all in-store activities, including the POS, and can produce an exact digital replica of every sales receipt in order to track transactions.

POS integration essentially makes the process of reviewing video footage of a cashier’s activities much more efficient. The integrated system can index specific events occurring at the POS and review the video footage that corresponds to find out whether a crime has occurred. POS data that is extracted from the DVR system can also be used to search for corresponding images as well as to trigger recording and create audit trail entries.

If a quick-service operation is not equipped with a DVR that is linked to the POS, management would have to unroll dozens of feet of journal tape and manually check every transaction. Not to mention the hours of video footage that would have to be combed through to match the transactions. This tedious resource-consuming process devours managerial time and money, a fact that most any thieving employee is well aware of.

According to most quick-serve operations that have deployed a DVR that is integrated with the POS, it usually does not even come to that. After the system is installed and employees are shown the system’s capabilities, two things usually happen in sequence: employees who have been pilfering will realize that the jig is up and simply quit and sales will increase. In some cases, the increase is enough to enable the owner or operator to recover the cost of the technology within six months or less.

The bottom line is that DVRs linked to the POS are the next evolution in surveillance and have proven quantifiably successful in reducing losses through employee theft. Think of it as simply stopping up a leaky cash register.

Van Carlisle is President and CEO of FireKing. Having studied criminal justice at the University of Louisville and serving six years in the Air National Guard Security Police Force, Van brings a unique level of security expertise to the company. For more information please visit www.fireking.com.

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