Uphando Forensics

5 Types of Employee Theft and How to Deal With Theft

One of the most difficult situations to navigate amongst employees is how to appropriately handle an employee whom you suspect has been stealing. Employee theft is one of the most common forms of workplace crime and it can have serious consequences for a business. From stealing office supplies to falsifying time sheets and mishandling customer information, the costs of employee theft can run into the thousands – and in some cases, even millions. . Unfortunately, the majority of employees admit to stealing from their employers at least once, making it important for business owners to understand the risks and take steps to prevent it.

5 Types of Employee Theft

1. Inventory Theft – Inventory theft occurs when an employee steals a product from their employer. They may want the item for personal use or steal with the intent to sell. Employees are responsible for nearly half of inventory shrinkage, so implement preventive measures immediately.

2. Data Theft – Data theft is one of the most troubling types of employee theft. Not only can it put your company’s assets in danger, but it can also compromise your clients’ and customers’ sensitive data.

3. Theft of Services – This type of employee theft can occur in any type of business, from an accounting firm to a bakery to a laundromat. For example, an front desk assistant at a nail salon may ask a nail technician to do her nails free of charge.

4. Payroll Theft – This type of employee theft is just as it is. An employee whose work involves financial tasks, steals and cashes other employees’ payslips.

5. Theft of Money – Theft of money occurs most frequently in \’cash-heavy\’ businesses such as retail. This type of employee theft can include Stealing money from registers, safes or petty cash drawers. Overcharging a customer and pocketing the difference. Skimming (not registering a sale or recording a transaction in accounting books and taking the cash).

How to Deal With Theft

1. Catalogue everything – Should you decide to later terminate the offending employee, you’ll need documentation. Catalogue every piece of evidence, including physical evidence, witness testimony, security footage, financial documents, etc. Remember to document every incident along with the date and time. 

2. Evaluate the situation at hand – Ask yourself some questions: Was this theft intentional, or even out of malice? What disciplinary options are available according to the company’s policy? Is this employee likely to steal again? These questions will help you decide if the employee’s offence is worth a warning or firing them.

3. Should you call the police? – Is this theft big enough to get the police involved? It may be very useful to acquire a police report for additional documentation, and it gives you the testimony of the police should complications arise later.

4. Supervise the employee closely – A common behavioural trend of employees who regularly steal from the workplace is to stop their criminal behaviour for up to several months before continuing again, once their employer has relaxed and stopped watching them closely.

5. Prevent the next occurrence – Employee theft is a highly demotivating event in the workplace, ideally your role should be to consider how you might prevent theft. Running background checks with the assistance of Uphando to prevent the hiring of potential thieves is a necessity. It’s also good practice to provide a clear zero-tolerance policy regarding workplace theft.