There are many types of retail theft that you have to consider when trying to protect your business. Aside from outsiders stealing your merchandise or employees taking cash or merchandise from the store, another type of theft that may take some retailers by surprise is “sweethearting.” Conducted by employees, this theft happens at the cash register when they give merchandise or special discounts to someone they know who is a frequent customer, friend, family member or fellow employee. This common theft accounts for about $60 billion in retail shrinkage annually.
A sweetheart customer is not as easy to detect as straightforward cash-drawer theft by employees. Cashiers may use voids, no-sale transactions or price overrides to offer unauthorized sweetheart deals and discounts. Most retail owners pick such shrinkage up during inventory checks, which uncover a strange discrepancy between recorded product sales and inventory levels.
If you have experienced major discrepancies in your store’s inventory, here are four ways to prevent retail sweethearting to resolve the issue and improve your profits.
1. Establish Clear Policies to Deter Employees From Committing Sweethearting Theft
Employers may find success in reducing the risk of sweethearting by laying out your organization’s rules. Establish clear policies that define the consequences of giving away merchandise or offering unauthorized discounts to friends and family. Such consequences may include termination of employment and criminal prosecution, but whatever they are, make it clear that you will follow through if they engage in such activity.
2. Set Up a Whistleblower Policy for Fellow Employees
Let all employees know that they have a voice in protecting your business and their job. Many employees understand that sweethearting could ultimately cost you profits and cause your business to fail. Set up a policy that protects the anonymity of employees who report such theft.
3. Invest in a Small Business Security System at the Cash Register
Investing in cameras can help you deter sweetheart deals and thefts that threaten the health of your business. Small business owners increasingly rely on technology to help serve as additional eyes and ears to protect their bottom line, and you may find it helpful, too. Modern security camera systems offer a variety of cameras and monitoring solutions suited to your needs and budget. With dutiful monitoring of footage by managers, you can quickly determine the source of any sweetheart thefts and handle the situation according to your policies. By letting employees know you have a monitoring system at the point-of-sales, you may prevent issues before they begin, or you can stop them in their tracks.
4. Perform Thorough Pre-Employment Screening Measures
Background checks, credit checks and other pre-employment screenings have become a common part of the hiring process. Employers conduct such tests to make sure that prospective employees do not have a history that may indicate future problems, such as a criminal record. Pre-screening tests alone may reduce theft by as much as 35 percent, offering insights into each candidate’s personality and integrity.
You Can Protect Your Business From Sweethearting Practices
Your approach to protecting your business from sweetheart theft and unauthorized discounts may look a lot like any other theft prevention strategies when you put these tips into action. Security systems, pre-employment screening and a set of clear theft policies are solid methods of protecting your merchandise and profits.
