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Top 8 Types of Employee Theft to Watch Out For

January 15, 2020
Employee theft happens everywhere, but the tricky part is that it’s so hard to catch. But you’ve got an advantage: we here at Solink help thousands of brick-and-mortar customers discover employee thefts in their businesses, and that’s how we know what types of employee theft and scams are hot this year. Let’s review–and remember, there’s even more content about employee theft in our Complete Guide To Employee Theft!

1. Skimming. This popular scam occurs when an employee charges a customer full price but takes a little cash out of the total for themselves. This may result in telltale cash register imbalances; or, it can be more complex, like using coupon codes on a customer’s purchase while still charging them full price and then pocketing the difference. In situations where your staff manually accept cash in a fast-paced environment like a bar, this is an easy scam to pull: charge a customer $5 for the beer, deposit $4, and blame the fast pace of the evening for the till imbalance later on.

2. Under ringing. Under ringing is a popular scam that’s a bit harder to spot than skimming, because the cash register total will balance out at the end of the night-what won’t balance out is your inventory count. When an employee charges a client for all 5 of their purchased items, but only inputs 4 of those items into the cash register, that’s under ringing. You may not notice anything is wrong until inventory day when you realize you’re completely sold out of item X, yet don’t remember many actual sales of that item. The bigger your business and larger your inventory, the harder it is to catch this scam.

3. Sweethearting. Sweethearting can take many forms, but it usually relates to an employee giving a friend or family member a ‘discount’-either by literally inputting their employee discount, or by other cash register tricks like voiding a scan, giving a refund without retrieving the product, overriding the price manually, or failing to scan an item at all. Estimates state that sweethearting costs businesses nearly $100 billion annually. It’s a type of employee theft that is often taken for granted by the perpetrators, who may feel like they’re entitled to the discount or don’t understand how it doesn’t apply to their extended family. Without eyes on the cash at all times, this type of theft is hard to catch because you can’t know for certain if your employee was simply buying something for themselves while on break.

4. Product theft. A more direct and apparent form of theft, product theft is self-explanatory. The complication comes in when employees are asked to explain their theft. It’s very easy for a fast-food worker to see a box of fries or a latte as a small ‘perk’ that doesn’t hurt anyone, but in the end these small items can add up to a grand total. Of course, you may also encounter the more brazen employee thieves who steal larger inventory items where no justification could be possible. Try as they might to excuse it, no one really believes their company owes them a free big screen TV or a new pair of shoes. Worse still is if you’re dealing with a thief who’s turning a profit on their theft: taking multiple items and selling them online or to friends for a profit.

How Solink Helps 1
Solink is an app + platform that connects your point of sale transactions with your video footage and looks for unusual transactions and activity in the data. Having Solink connected to your systems is like having eyes on every transaction. Search by employee name, product sold, coupon type, or time of day and see exactly what was printed on each receipt, with a perfectly-synced video clip to give you visual context. We also have a suite of sophisticated motion features that can provide you with alerts for things like top shelf liquor bottles being moved or unauthorized back room access.

5. Blunt theft. Direct and impactful, blunt theft occurs when an employee takes cash directly from the register. There could be several motivating factors for blunt theft but a good place to begin your investigation is with staff members who have been vocal about feeling underpaid, underappreciated, or taken for granted. Depending on your store procedures, it could take a while to figure out who is stealing from the till, especially in an environment where multiple staff have to access the same register repeatedly throughout the day.

6. Time theft. Coming in late, leaving early, or taking long breaks…these things end up costing your business, especially if you inadvertently end up compensating for these MIA staff by adding an extra person to the sales floor, thinking that tasks aren’t being completed because there aren’t enough people working.

7. Short ring. Your bartender makes a cosmo that sells for $10, but rings it in as a screwdriver that sells for $5, and pockets the difference. Hard to catch until your inventory is out of whack, this popular scam can cost you thousands of dollars by year-end.

8. Gift cards. There are many ways to scam gift cards, but maybe the simplest is to scan a customer’s card, tell them it’s now empty and that they’ll be throwing it out–when in reality your employee is stashing it for later because there’s still a balance on it.

What this means for you:

Keeping your eyes open for scams and types of employee theft can be really difficult, and you’ll likely rely heavily on your transaction data and video footage to investigate any suspicions. What’s interesting to note is that for many managers and owners, investigation can be such a drain on time that often, it’s not completed or even started. Hours of footage on a grainy screen in the back room while business is still rolling all day long sounds like a prospect most don’t have time for. Employing a software like Solink can save you all that time and even find discrepancies in transactions on its own, so remember there’s help here waiting for you!

You might also want to download this great infographic outlining this year’s top types of employee theft.

Post it in your break room to show your staff that you’re aware and watching for signs of problems. Often, thieves underestimate how smart their bosses are; deter them from the start with preventative measures.

8 Types of Employee Theft Infographic Mockup
A tiny preview of this great download!