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Preventing Employee Theft in Retail Stores

Date: Mar 28 2024
Read Time: 5 minutes

When you think of shoplifting and retail theft what comes to mind? Is it smash and grab videos of organized retail crime rings ransacking luxury boutiques, or an unsuspecting customer discreetly slipping something into their jacket? Both are right, but retail theft is a large umbrella that also covers employee theft, better known as internal theft. The National Retail Federation estimates around 30% of retail shrinkage is due to employee theft. There’s no way to eliminate internal theft, but there are some simple and more advanced security measures you can use–including a very smart lock.  

Different types of internal theft in the retail industry 

Ransacking retail establishments and nonchalantly slipping goods into a purse are just two of many examples of external theft (shoplifting). And just like external theft, internal theft comes in many forms. Stealing money from cash registers, not ringing up merchandise, payroll fraud, data theft of sensitive information, employees clocking in for each other (buddy punching), and the list goes on. It can all sound so overwhelming, so for our purposes we will focus specifically on theft of physical products.    

Proactive measures to deter employees from stealing 

Just like shoplifting can be perpetrated by anyone, there is no one-size-fits-all for dishonest employees. Retail employees who steal are as diverse as the retailers they work for. They come from all age groups, socioeconomic, and educational backgrounds. As an employer, the best thing to do would be to not treat every new hire like they’re a criminal in need of constant surveillance. In most instances, it will just create a toxic workplace culture full of disgruntled staff bubbling with disdain for your business. 

Protect your company by administering comprehensive background checks, implementing access controls (more on that later), properly training staff, outlining clear policies and consequences for when internal theft incidents occur, and promoting a workplace where honesty and hard work are valued and rewarded. Ultimately, the good habits and mood of your staff will rub off on other employees and ultimately create a better shopping experience for your customers. 

Prevent internal theft with Smart Locks 

You’ve done all the background checks and properly trained your staff, but somehow it just isn’t enough. Smart access control should be seen as a basic step to protecting your products and employees. For secured display or packaged merchandise, mechanical keys are unreliable and don’t provide an audit trail. They can be shared, duplicated, and employees often don’t return them if they quit or are terminated, leaving you with a pricey bill to rekey locks.  

With InVue’s Smart Locks you can replace mechanical keys with our single-key system (OneKEY locks) or with your very own or store-issued mobile device (LIVE Locks). Both have incredible advantages depending on your store needs.  

OneKEY Locks protects you from internal theft by giving you, the store owner, the power to grant permissions and access. For example, Jane can use her OneKEY to unlock electronics, but she won’t be able to use it in the jewelry department managed by John and his team.  

Employees are issued their own identifying PIN to use with OneKEY. If an employee leaves with a key or makes plans to share them for devious activity later–no problem. OneKEYs time out after a 12-hour period, making them unusable if found later. If Amy decides to share her PIN or key with James, you will receive a full audit trail of which displays were opened by the OneKEY using Amy’s PIN. 

If your store is larger or already has mobile devices in place for employees to track inventory or unlock displays, then LIVE Locks are the answer. They work in the same way as OneKEY Locks but can be integrated to the tools and devices you already use making them even more seamless to integrate, all while providing the same audit trail and protections for your merchandise and your employees.   

Will retailers always be at risk? 

Will internal theft be an ever-looming threat to retailers? Yes. Even with strict security protocols in place, internal theft remains. But there are ways to mitigate the risks. Do all employees steal? No. Thankfully, missing items aren’t always a result of malicious intent on behalf of your associates – retail shrink also comes from genuine human error, shipping errors, damaged product, etc.  

A great company culture protects its employees and provides them with the tools to not only complete their tasks, but to provide the best customer service possible. With new policies in place that prevent employees from confronting shoplifters, it’s better to use retail security devices like InVue’s Smart Locks to serve as a line of defense not only for your merchandise, but for your employees, too. Remember, your employees aren’t a liability – they’re your greatest asset! 

Contact our team to find the best Smart Lock solution for your retail store.