It is a sad reality that many people will steal if presented with opportunity, access and the ability to justify their actions, with the most common form of justification coming as ‘it’s a big business, it won’t hurt them’ or ‘it’s all insured, it is not really stealing’. In a retail environment employees have the opportunity and access as a matter of course just due to the nature of their roles. Where an employee has the ability to justify their actions as ‘not hurting anyone’ because the business is insured or profitable, the chances of theft and fraud occurring increase significantly. Despite this risk, managing theft and fraud within a retail setting can be difficult for many businesses to navigate appropriately, because this is one area where semantics matter. This week we will explore the strategies for reducing the risk of theft and fraud, and the steps when addressing theft and fraud.
It is an unpleasant reality of managing a retail business that there exists an opportunity for fraud and theft. Strong stock and cash control policies, that are clearly communicated and enforced, as well as appropriate review of sales and stock systems and surveillance are key elements in mitigating the risk of theft and fraud, and provide the framework for managing it appropriately when it occurs.
Make it clear to keep it under control
Businesses who have strong stock and cash control policies are better situated to address and manage issues such as: employee performance and compliance issues, and theft and fraud inside the business. This is in addition to the deterrent qualities that a strong policy communicates.
To remain in control of these vital elements of success a business needs to have a strong stock and cash control policy that:
- Is written to reflect the realities of the business;
- Is communicated to all staff;
- Outlines expected behaviour and repercussions for failure to demonstrate expected behaviour; and
- Is enforced in a consistent and predictable fashion.
It should be made abundantly clear to all staff, in policy and training, that the business will view all breaches of the stock and cash control policy, regardless of the monetary value, as gross misconduct, and that, as such the standard business response to the stock and cash handling breaches would be summary dismissal. This is important as it ensures staff understand that the serious consequence of all breaches, not just major breaches. This policy and strong consequence focus goes a long way to removing the opportunity, access and ability to justify, and thus the likelihood of theft.
Stock
Stock in a petroleum and convenience business can be everything from lollies to petrol. A business’ stock is its product and it is vital that it be handled, recorded and disposed of according to the businesses requirements.
Cash
An additional benefit of strong cash (and credit) control policies can also be the reduction in incidental cash exposure. Tighter cash control procedures can also lead to the business being a harder target for both opportunistic and organised criminal activity.
Managing incidents
When the business discovers, or has a concern, that theft or fraud has occurred it is important that it is addressed firstly as a business issue. That is to say that the business has the right to manage the performance of the staff against the stated expectations of the business. Where the business has communicated to the staff the expectations regarding the handling of stock and cash, and the staff breach those expectations, by removing cash from the business, removing stock from the business, providing free food to themselves or family etc, the business issue is one of a serious breach of critical business policies.
Like any performance management issue, when dealing with this type of incident the business should call a performance management meeting with notice, and outline to the employee the breaches that it believes have been made, they should seek the employees comment and should consider it prior to making any decision on how to proceed. Depending on the employee’s comments and the findings of the business outcomes from the meeting could be a warning, retraining, performance management, termination or referral to the police. What is the appropriate outcome will depend on the particulars of the case. Either way the outcome should be documented formally, that is to say written down and provided to the employee.
What is important to note is that theft and fraud are crimes, and are a matter for the police to investigate and to charge a person with, if that is their determination to do so. A business cannot manage or terminate an employee for theft or fraud. What a business can do is performance manage an employee for breaching business policies, procedures and task instructions. While on the face of it this may seem like a semantic distinction only, it is an important difference. It highlights that the business has a responsibility to ensure that it has clearly communicated the business expectations, through documented policies, procedures, training and task instructions.
Ultimately, the overwhelming majority of employees are faithful and unlikely to steal from a business, however, to manage this risk businesses should clearly communicate expectations and where there is an issue, should follow the performance management procedure. If it is determined that the breach has been strong enough that termination is the outcome, then the termination should be on the grounds of failure to follow stock and cash handling procedures amounting to serious misconduct.
It is important to note that while the business can only manage the employment of the employee based on the business policies, procedures and instructions, where appropriate the business can, and should, also refer any cases of theft and fraud to the police to pursue.
Here to help
Stock and cash control policies are part of the “must have” policies that every business should have, communicate to staff and enforce. ACAPMA members are reminded that ACAPMA’s Employment Department has a series of resources from ‘Quick Reference Guides’ to template letters, and investigation and reporting checklists for stock and cash control that can assist with ensuring your business is protected, and that management can respond appropriately to acts of misconduct around stock and cash/credit.
ACAPMA members can access these resources and can call on the advice and support of the ACAPMA Employment Department Workplace Relations Professionals via employment@acapma.com.au.
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by contacting one of ACAPMA Workplace Relations Professionals, it’s free for members.
Elisha Radwanowski BCom (HRM&IR)
ACAPMA
Source: https://acapmag.com.au/2022/11/theft-at-work-how-to-manage-sticky-fingered-staff/.
