Although most retailers experience a shrink percentage of less than 2%, some smaller retailers often experience monthly and annual average shrinkage percentages as high as 20%. Employee embezzlement is the theft or taking of property or funds entrusted to an employee by an employer. The most common type of retail embezzlement is cash theft. Other types include ringing up fake gift cards, passing merchandise, discount fraud, and, of course, theft of merchandise. Embezzlement investigations are widely known in the loss prevention industry as "internal investigations". Cash theft is generally investigated using cash office audits that appear on exception reports and CCTV cameras. Fake gift cards are usually investigated through the use of an electronic journal in which the gift cards are logged. The passing of merchandise is usually discovered through the use of an exception report in which a particular employee is shown to have an unusual amount of voids or no-sales. Generally merchandise is rung up by an employee and subsequently voided out. The merchandise is then passed to a person at the counter, usually a friend or family member of the employee. Other forms of employee theft that are discovered via the use of exceptions reports are discount and commission fraud. Discount fraud is the fraudulent use of an employee's discount to reduce the price of merchandise for someone else. Generally this is done by an employee passing their discount card to a friend. Commission fraud is usually accomplished by ringing large return purchases back to another employee or recent ex-employee. Merchandise theft is often investigated though the use of CCTV cameras and investigator observations. The items stolen by employees tend to be small items which either have a high dollar value or are edible. Stockrooms have a particularly high level of employee theft and are often investigated using CCTV. Loss prevention often tours stockrooms looking for "stashes", out-of- place merchandise, and price tags. Typically, a covert CCTV camera is placed in the areas of high opportunity for theft. To reduce the amount of employee embezzlement, stores like Wal- Mart, check their employee's or vendors bags and purchases before they exit the store. Store personnel's also supervise vendors when they enter the backroom or stockroom |
