Question: 1. Employee theft is a major problem in the U.S. retail industry. Information obtained from SecurityInfoWatch reported that twenty-three (23) major retailers alone apprehended over 1.1 million shoplifters and dishonest employees, and recovered more than $189 million from these thieves in 2012. Watch J. Farrell's video below titled "Prevent Employee Theft in Your Business," and provide at least two (2) examples of internal controls that could be implemented to reduce theft in the U.S. retail industry.
Video: Prevent Employee Theft in Your Business (By Jim Farrell)
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2. Employees who steal typically have worked at a business for several years before starting to steal. The following two measures can be taken to reduce theft.
1. Know your employees. Be alert to key indicators of potential theft such as:
- Sudden, apparent devotion to work and working late.
- Lifestyles well above salary levels.
- Strong objections to procedural changes related to financial, inventory or supply matters.
- Drugs and alcohol abuse.
- Evidence of compulsive gambling, persistent borrowing or bad check writing.
2. Manage inventory and use security systems. Separate receiving, store keeping and shipping functions. Physical inventories should be done annually by individuals who are not responsible for inventory records. Some businesses also install security devices to monitor merchandise or inventory.