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Preventing theft by employees

     
9:42 pm on Nov 25, 2009 (gmt 0)

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How do you guys prevent employees from stealing inventory? My employees always work alone in the warehouse, and it would be so easy for them to steal. Inventory always seems to go missing. It's a low volume and the stuff isn't very valuable, but I'd like to know for sure it isn't happening, especially since I may branch out into expensive stuff sooner or later.

A video camera records in the warehouse all the time, and I have a tight inventory control system. The problem is, I'm not going to review hours of video when theft could probably be hidden from the camera anyway, and when inventory goes missing, it could always be because of a mistake in the last count, etc.

11:38 pm on Nov 25, 2009 (gmt 0)

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1. Hire people you trust
2. Have a policy in place that if discovered, theft of inventory is grounds for termination and will be handed over to the authorities
3. Make friends with your accountant and write it off
12:12 am on Nov 26, 2009 (gmt 0)

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If you see a recurring shortage you need to weed out the moles. This is going to take time and effort. If you don't want to do it then you will eat the loss instead.
4:28 am on Nov 27, 2009 (gmt 0)

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A video camera records in the warehouse all the time,

This could be converted to motion detection for each camera. Add dummy camera locations and move the actual cameras around as needed. They will become just a part of the scenery and people will steal right in front of them. The most trusted employees are the greatest threat, especially if they are not happy and you don't recognize that fact. The most experienced employees will know not to try to hide the theft. They will take product in hand as if business as usual, walk it all the way across the warehouse and into their bag. Can your camera(s) follow the movement from camera to camera?

Small losses could easily be counts. Regular losses are one or more thieves that will go after more and more. Restrict 'employee area'. Make it harder to secrete and then walk out.

Bookkeeping embezzlement often starts as a one-time small amount. Once successful, they feel smarter, more powerful, and then it spins out of control.

Assume that you are 'lawyered up' regarding any disclosure requirements of employee monitoring.

1:14 pm on Nov 28, 2009 (gmt 0)

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D_Blackwell, is disclosure of employee monitoring necessary for video-only, no audio? The camera is right out there in the open.
11:18 am on Dec 1, 2009 (gmt 0)

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Depends how far you want to go. You can use a sophisticated barcode system and access control (eg: via a card) to the various areas of the warehouse. It doesn't need to trigger an alarm if something is wrong but it could silently record the item that gone out and the person who carries it.

There will be false positives and you will have to verify each case separately. Perhaps it will be more efficient than a network of cameras, less intrusive and easier to monitor.

Again depends on your budget really.

12:24 pm on Dec 1, 2009 (gmt 0)

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Why not have a "discussion" with the employees, as a group, and tell them about the inventory discrepancies and ask them if they have any ideas how it could be tightened up? Whatever you do, do not even hint that you're suspecting theft. It should not be that kind of discussion. You can't have that kind of discussion until you have evidence of theft, even if you don't know who it is.

Work with them in the first instance as they may come up with some great ideas as to how the inventory and system could be tightened.

12:54 pm on Dec 1, 2009 (gmt 0)

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Using the 80-20 principle. 20% of your employees will cause 80% of your problems.
I was in the Loss Prevention arena for over 25 years.
To answer your original question "How do you guys prevent employees from stealing inventory?" Answer - You can try and deter with everything you can - video - fake cameras - reward system - etc. There will always be that one person that will simply take what is there because it is in their nature.
If you ever do catch someone, the best advise is to prosecute to the fullest.
Let your employees know that you will prosecute any illegal activities.
You also have to look at the $$$ involved.
Any loss is lost profit - but at some point you have to stop being MR Nice Guy. You bust your butt to make a 4% profit margin. If your loss through theft is .05% of your total operating cost, What percent of your profit has be lost.
Now you expand your business and you are handling more expensive and desirable product, now what?
4:18 am on Dec 4, 2009 (gmt 0)

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A divide and conquer approach can work if used correctly. It is a proven method of controlling unruly behavior (for the most part) in institutional settings like prisons.

What you do is give emotional or material incentives to susceptible employees to become snitches. Once this becomes known nobody knows who is watching and who to trust which can cut down on theft.

Unfortunately, it also fosters a negative and paranoid environment which increases turnover and hurts productivity. Violence would probably not be an issue since people leave at the end of the day, but there are exceptions of course.

4:50 am on Dec 6, 2009 (gmt 0)

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Setup cameras that everyone knows about, and leave an intentional "blind spot" somewhere. Make sure this blind spot is secluded and isn't going to have much if any movement going on.

Eventually any thieves you have will find this blind spot and use it to stash things in their bags or whatever, right in front of your hidden camera with the motion sensor.