How to prevent and stop internal employee theft

It’s not a nice subject.

As business owners or managers, you don’t want to be suspicious that your own employees are potentially stealing. Truthfully, most employees are doing the right thing.

But, it would be wrong to ignore the enormous amount that employee theft costs business. In 2014, the Australian Federal Police revealed that $1.5 billion a year was lost to employee fraud, which accounts for 70% of all theft in business.

Instead of having to deal with theft once it has happened, and caused your business loss, there are small measures you can implement to prevent it in the first place.

There are five of our top tips:


Hiring right from the beginning


You may be thinking right now, “How am I meant to spot a thief from just a glance?”

And, that’s true.

It’s not like people who intend on taking from your business walk around with a stamp on their forehead alerting you.

However, you can take extra steps at the hiring stage to ensure your new employee is the best they can be.

Simple tasks like comprehensive interviews, actually calling their references, and background checks are strongly recommended. If an employee has previously left similar jobs to the one they’re applying for, enquire why they left the business.

Did they just want a change of scene, or was there another influencing factor?

If you feel their responses aren’t right, don’t be afraid to contact their previous employees for safety.


Prioritise their training

Training for new employees should be important without considering employee theft, but it also is an excellent preventative step to take.

As outlined by Delaget, many employees often mistakenly work out how to subvert the appropriate policies and working methods.

For instance, if a new worker is not properly trained and left to understand the cash register themselves, it may only be through accident they learn to take a few extra dollars or merchandise.

Providing new employees with a buddy who can supervise their work and provide comprehensive training, sets a responsible culture for your workplace.

Any employee who has been thinking of stealing will quickly see the opportunities are quite limited.


Implement an excellent POS system

Before we get started on this very important tip, if a POS system is just jargon for you, it stands for Point of Sale.

What is a Point of Sale system, you’re wondering?

POS software is your substitute for the traditional cash register that only keeps money in one place. Our POS software brings together a multitude of technologies, including:

  • Cash registers from all over the nation on one database
  • Detailed reporting of every transaction
  • Real time sales data
  • Inventory management and control
  • Changes to promotions
  • Staff management

The options really are endless, but what’s important is what you can do with these different features and data that POS software enables.

For example, consider the feature for POS to monitor your inventory. With thorough documentation and management of your inventory, it is not easy for employees to slip a few products in their backpack at the end of their shift.

The real time live data on our POS systems allows you to log in at any time, and from anywhere, to check stock. If the stock is sold, wasted, or transferred, then all this information is all available to your eyes.

If you do notice anything unusual with the movement of stock, then the data available from POS systems allows you to create patterns of what is missing and when.


Video surveillance and ongoing supervision

Introducing video surveillance into your business, particularly for employees, may be a tad confronting.

Are you watching their every move? Are you automatically assuming they’re guilty?


Based on your pre-existing relationships with your employees, and the very nature of your business will impact whether having video surveillance is a sound idea.

However, if you are concerned about internal theft then keeping an eye on them through video can act as a deterrent (or clarify any doubts).

If you are not confident on video surveillance, then using other employees as security measures could be an option.

Around opening and closing, Entrepreneur recommends using a buddy system. So, ensure at least two employees are working on opening and closing times and don’t consistently pair the same people together.

Another hint, if employees are quite close friends, then it’s advisable to make sure they’re not acting as witnesses for the other’s work.


Trusted communication channels

Ultimately, you can’t be on the ground all the time.

You can set up all the preventative steps in the world and still not be able to cover every base.

That’s why your own employees should be one of your greatest assets in stopping theft.

If you can facilitate trusted communication channels with your employees, where they can report any concerns without rumours circulating, then you’d be doing the right thing.


These are just a few of our recommendations for ensuring employees are doing the best thing for your business.

Additionally, a Coyote POS System has benefits that far exceed preventing or identifying employee theft.

If you have more questions about this topic, or just want to know more about how POS can revolutionise your business, then please get in touch!