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March 24, 2017

Retail Theft in Australia: Are Employees or Shoppers the Problem?

Hiring international background check companies can help you to screen employees and reduce your retail theft.

Shrinkage. It’s a dirty word in the retail world, and it can have a big effect on your bottom line. Whether it’s through employee theft, shoplifting, administrative errors or supplier fraud, the effect is the same: less profit for your business.

Improved security is one way to identify the root cause of shrinkage in your retail business, but as the old saying goes, prevention is always better than cure. If you’d rather prevent retail theft from affecting your bottom line, then read on, to find out more about how big the problem is, what the root cause of retail theft in Australia is, and how you can prevent it from happening.

How Big Is the Problem?

In a word, huge. In fact, according to the Australian Retailers Association, retail theft is the biggest single category of crime in Australia, and accounts for billions of dollars in costs every single year. That’s a staggering figure, and it’s one that is only becoming bigger every year.

The ever smaller and more compact size of consumer electronics like phones, tablets and cameras contributes to this growth, and since shop lifters can be teenagers, women, old people and just about anyone else, it’s very hard to target just one problem group.

Even more worrying, there’s a growing trend towards employee theft, with as much as 70% of theft and fraud in the workplace attributed to employees.

In short, it’s in every workplace, in every store, and if you’re not taking very careful steps to prevent it, it’s almost certainly in yours.

How Do Employees Steal from Employers?

You’re probably shocked to learn that you’re probably losing more in shrinkage to your employees than to outsiders, but it’s even more shocking to realize that there are many methods that they do this:

  • Simple, straight forward product theft or theft of cash. It’s not very clever, but it happens all the time, and there’s always a chance your stock is simply walking out the front door in an employee’s bag every day.
  • Fake vendor accounts, set up specifically to siphon off funds. If the amounts are kept in reason, they might not be noticed for a very long time.
  • Stealing, signing and cashing company checks.
  • Submitting false expense reports.
  • Clocking in and out on behalf of other employees. Might not seem like a big deal, but a half hour extra in wages every day for a year adds up to a lot of money!

Preventing the Problem

There will never be a fool proof method of preventing employee theft, shoplifting and fraud, but there are ways to limit it in your retail company:

  • Install security cameras, or use store detectives to catch shoplifters in the act.
  • Conduct very thorough screening of all staff. Hiring international background check companies can help you to screen employees who come from different countries, and the pros will know what to ask, and how to ask it.
  • Take a long hard look at your employee packages. It’s no excuse for theft, but if you’re not paying your employees enough to survive, they may be more tempted to be less than honest.
  • Make sure your accounting department is constantly looking for anomalies.

No one likes to think that their customers and their employees are less than honest, but it is a fact of life. Put plans and processes in place to prevent, identify and resolve these situations, and your company will see the benefits.


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