Guarding against employee theft

Jun 14, 2013
Guarding against employee theft

To prevent employee theft, small businesses must think big, say local police and entrepreneurs.

“When it comes to policies and procedures regarding money, even the smallest companies need to act like a big business,” said Brandt Hess, Hampton economic crime detective. “It is OK for a small business to think like they are family, except when it comes to money.”

Business owners should document who has access to the money and accounting records, where the money is stored and how it is counted, he said.

“There must be strict enforcement of who comes and goes,” he said. Routines for the money and accounting procedures should be closely followed by every person with access. “And the employer should set up their employees for success by making the expectations clear,” he said. “Everyone should be on the same page.”

Business owners should not assume that employees are going by the book, even if those workers have been trained and have received copies of written procedures. Some people still fail to follow those rules, Hess said.

“And when the procedures are not followed, it leads to problems. When an owner or manager finds out that an accounting procedure is not being followed, they need to take action with the employee who is not doing it,” he said. “It is also good to set a schedule to do retraining of employees,” Hess added.

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Those who steal from employers do so for various reasons, including poor employee morale. A person might feel a sense of entitlement or that he or she is owed something by the company.

“They may have worked a few hours extra and feel they were not paid properly,” he said. “If they are happy with the job then they are less likely to take something they feel they deserve and are not getting,” he said.

Hess said knowing a little about an employee’s life outside of work is also a good idea. “You don’t have to get in their business to at least know if they are happy,” he said. “The happier they are, the less likely they are to feel they are owed it [the stolen property].”

“And watch their lifestyle. If you know you are paying modest salary but they are driving a fancy car, you should be aware,” Hess said.

Another way a small company should think big is by having surveillance cameras where the money is kept and counted as well as in the stockroom.

“This will help prove what is thought to be going on,” he said.

Three years ago, Ute Fee, owner of York Uniforms in Yorktown, learned how surveillance cameras can catch an employee stealing. The incident happened at a former location in Hampton. Her daughter, Desiree, was doing the bookkeeping and noticed that one employee would “batch out” or cash out the register several times a day, when she was alone in the store, Fee said. Normally, that action is done only at closing.

After reviewing surveillance video, they discovered the employee would do it when there was a cash sale. Instead of putting the cash in the register, she would put it in her pocket.

“At first she denied it. Then the police officers showed the tape,” Fee said. “She thought this was just a mom-and-pop shop and was not aware we were so ready for something like this.”

Then the accused woman told authorities about another employee who was stealing merchandise. She would sell the medical uniforms at area hospitals.

The employee who stole money was prosecuted and was found guilty because of the video, Fee said. However, the employee stealing uniforms was not prosecuted because there was little proof and no video.

Hess said he worked a case in which a restaurant noticed that one manager was giving several discounts, such as senior citizens’ discounts, several times a night compared with other managers who may have one such discount a night. The manager was charging customers the regular amount but at the register he would enter the discount and pocket the difference.

“In this case, the cameras proved what was thought to be happening,” he said.

Cpl. Mary Shackelford, Hampton Police public information officer, said it’s important to periodically check that cameras are working properly. “Many times a business will say they have a camera to check but it is not in working order,” she said. “We go to see if the crime is on video only to find the batteries are dead or something else is wrong. Like other business equipment, it needs basic maintenance. Write down a schedule for it.”

To prevent stealing of inventory, Hess recommended doing routine inventory “ceiling to floor.”

“Balance it against how much was ordered and how much was used,” he said. “That way you can tell if anything is missing.”