protect your finances while opening a business

Reduce Employee Theft With These 4 Tips

by Daniel Herrera

As a business owner, you know that you need to have measures in place to prevent outsiders from stealing or defrauding you out of your profits. But what you may not realize is that you also need to be concerned about theft or fraud committed by your own employees. For retailers in the United States, employee theft makes up 43% of all lost revenue. This means that it's vital for you to implement security measures that will help you prevent this kind of employee theft. Take a look at some tips that can help you eliminate the opportunity to steal and prevent loss in your place of business.


One of the best ways to prevent theft is to ensure that employees know they're being watched. They'll be less likely to attempt to steal if they know that there's a high likelihood they'll be seen. Installing video cameras at point of sale terminals can prevent employees from pocketing cash and protect employees from robbery attempts at the same time.

It may also be helpful to hire an outside security or loss prevention agency to monitor your store. Be sure that when you choose a security service, their agents are trained to recognize signs of employee theft or wrongdoing.

Automatic Reporting

Often, employee theft is not as straightforward as simply pocketing cash or picking up an item and walking out of the building with it. In retail, for example, employees may manipulate transactions like voids or refunds in order to benefit themselves. This type of theft might not be easily detected by cameras or human observers.

However, you can catch this kind of theft by programming cash registers or computer systems to flag suspicious transactions or records. An unusual amount of refunds, voided items, or transactions that occur before or after hours are all signs that something needs further investigation. And if your employees know that suspicious transactions will be flagged and investigated, they may not only be less likely to steal, they may also be more meticulous about avoiding careless mistakes.

Document Security

If your business handles sensitive customer or client information, it's important to prevent the theft of potentially valuable documents or data. Not only can you lose money due to document or data theft, such breaches can also compromise your business's reputation with clients and colleagues.

Make a schedule for document shredding to be done on a regular basis. Having an outside company come to shred unneeded documents monthly or weekly can ensure security and eliminate hassle – choose a company that offers green services so that the paper can be recycled.

Additionally, designate separate usernames for each employee on company computer networks, and provide each employee with access that's limited to only what they need to do their jobs. You should also require each employee to change their passwords regularly to prevent any unauthorized access. Cyber security is just as important as physical security and document security in the digital age.

Enlist Employees

One more important factor is the employees themselves. While some employees do steal, many others are conscientious and loyal. Any loss prevention strategy should include efforts to encourage employees to report any theft or suspicious activity. You might consider setting up an anonymous tip line that employees can use to report suspicions with no questions asked, or offering rewards to employees that turn in dishonest coworkers.

You should also take steps to encourage a culture of loyalty and honesty among your employees. The happier your employees are with their jobs, the less likely they are to resort to desperate measures. Get to know your employees. Be aware of community resources that you can steer your employees toward if they're having a hard time financially. Treat workers fairly and with kindness, and train managers and supervisors to do the same. Satisfied employees who like their jobs and are well-treated are going to be less inclined to steal.

No security measure will prevent all employee theft. However, these loss prevention controls will go a long way toward limiting your losses due to internal theft.  For more information on securing your business against theft, check out a site like