Dishonest Employee Statistics – A 5 Year Trend

In a previous article we provided and discussed the 5 year shoplifter apprehension and recovery statistics from our Annual Retail Theft Survey, and provided some Shoplifting Prevention Tips. In this article we will look at the Dishonest Employee statistics over the past 5 years in a similar manner.

Remember, the participants in our Annual Retail Theft Survey are all large retailers with AP/LP staffs dedicated to the prevention of theft (internal and external) – these are Department Stores, Mass Merchants and Big Box retailers. Most use EAS, CCTV, security packaging, lock-up devices / cases, EBR (exception based reporting) software, various pre-employment screening tools, have thorough AP/LP training and awareness programs, and have in-house store AP/LP staffs. They make apprehensions as a last resort. Yet, apprehensions continue to rise every year.

(Note: Survey participants change slightly from year to year, so “% Change” is based on common participants for that year who also supplied statistics for the previous year.)

Dishonest Employee Apprehensions:
Year # Apprehensions % Change
2014     80,366        + 1.65%
2013     78,085        + 6.53%
2012     71,095        + 5.54%
2011     71,505        + 3.27%
2010     69,373        – 0.35%
(Dishonest Employee apprehensions have increased 8 of the past 10 years!)

Dishonest Employee Recovery Dollars:
Year Recovery Dollars % Change
2014    $66.3 million    +18.11%
2013    $55.1 million    + 2.52%
2012    $50.8 million    + 7.01%
2011    $47.6 million    + 5.64%
2010    $44.4 million    – 12.65%
(Dishonest Employee recovery dollars have increased 8 of the past 10 years!)

Dishonest Employee Average Case Value:
Year Avg. Cs Val % Change
2014   $825.36      + 16.19%
2013   $706.21      –  3.77%
2012   $715.24      +  1.39%
2011   $665.77      +  2.29%
2010   $639.99      – 12.34%
(Note: The average dishonest employee case value has increased 28.96% over the past 5 years!)

So, what is fueling these numbers, and what can be done to reduce employee theft?

Our survey participants contributed the following reasons for the increase in dishonest employee apprehensions and recovery dollars:

. Enhanced POS exception reporting software/programs.

. Renewed focus on internal theft by Asset Protection/Loss Prevention.

. Less supervision of sales associates.

. Tough/stagnant economy.

. Reduced pre-employment screening tools being used.

Additional Information – Free Consultation!

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Employee Theft Prevention Tips

. Conduct a thorough pre- employment screening process on all applicants. The first step to controlling employee theft truly starts at the point-of-hire! A thorough pre-employment screening process including, reference checks, “honesty testing”, SSN trace/verification, criminal background checks, and drug testing is most important. Money spent up-front in the screening process will result in savings from reduced turnover and losses.

. Use an effective point-of-sale exception based monitoring program. An effective POS exception based monitoring program will quickly identify possible fraudulent transactions at the point of sale (ie. excessive refunds or voids; refunds or voids before or after store hours; excessive discount usage, excessive reward program usage, etc.).

. Conduct regular audits to ensure compliance with company policies and procedures. Ensure consistent compliance to company policies and procedures by conducting loss prevention/shrink audits on a regular unannounced basis. By reducing the opportunity, you reduce the chance of theft/loss.

. Invest in a loss prevention awareness and reward program for associates. Be sure all associates are given training and awareness on loss prevention issues. Also, implement a reward program for associates who report dishonest activities of other associates.

. Ensure loss prevention “basics” are in place and adhered to at all times:

– Door controls (no unsupervised egress: OH doors locked and Exit doors alarmed)

– Trash controls (flatten boxes, use clear trash bags, monitor and supervise the removal process, and keep dumpsters locked)

– Package/bag checks (conduct bag checks whenever an employee exits the location)

– POS controls (2 people should witness and verify all refunds and voids)

– Verify sales accuracy (conduct random sales verifications throughout the day)

– Shipping controls (2 people involved in all outgoings shipments and transfers) $

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