Monitoring Those Thieving Employees
By Tom Ryan
With billions of dollars being stolen from grocery stores by employees, retailers are increasingly having their security cameras aimed directly at cash registers. The monitoring is expected to ward against employees using a scheme called “sweethearting,” which involves giving away merchandise usually to family or friends by not scanning it.
According to a CNBC report, sweethearting represents $13 billion of the $20 billion store employees steal in merchandise each year. Working with a person disguised as a paying customer, cashiers pretend to scan merchandise, but deliberately bypass the scanner, thus not charging the customer for the merchandise.
StopLift Checkout Vision Systems is a provider of cameras that record checkout lines at grocery stores. CEO Malay Kundu said his company’s software, which constantly monitors 100 percent of the security video, flags the transaction as suspicious and quickly reports the incident, identifying the cashier and the date and time of the theft.
“Our software watches the cashiers,” Mr. Kunku told CNBC. “It analyzes the body motions of the cashier. It watches and analyzes how the items move across the scanner, or don’t move across the scanner.”
Mr. Kunku said supermarkets with already thin profit margins are particularly vulnerable to sweethearting, which accounts for an almost 35 percent profit loss industry-wide. Supermarket chains currently using StopLift include Safeway, Hannaford and Big Y. His goal is to have such security cameras become standard across retail.
“We actually have video in which the customer high-fives the cashier,” said Mr. Kunku.
Discussion Questions: What are the pros and cons of installing security cameras to monitor cash registers and store employees? Has this action become necessary to fight shrink or is it overly intrusive?
Retailers who don’t use video to track employee and shopper fraud and theft are getting taken to the cleaners. No one needs to watch the screens all the time. Like all other behavior, you look for exceptions and patterns using statistical sampling. There’s lots of software available to help anyone do this. And you can’t keep it a secret, because the first time anyone gets caught, everyone will know immediately.
You can never be over intrusive with security. Obviously the pros are the employees know they are being watched. The cons are that someone needs to be watching them. I was meeting with a retailer client recently and he showed me television screens with what seemed like a couple of dozen views at one time of his store. I was wondering how he would manage to do his work and watch his employees at the same time.
Unfortunately, employee theft has always been a huge issue for retailers, and represents the vast majority of what gets stolen each year.
It’s often said that up to 70% of employees are ‘thieves of opportunity’, meaning that if the chance to steal is there and the likelihood of getting caught is minimal, they just might do it. While that percentage might be high, it clearly indicates the need to let employees know that if they do steal, the likelihood of getting caught is significant. Knowing that ‘someone’ is watching will stop most ‘casual thieves’ in their tracks.
With over 13 billion dollars in losses being attributed to sweethearting ‘atrocities’, this certainly cannot be viewed as being overbearing. For years, we’ve fixed our cameras on customers. While it might seem uncomfortable at first, when you accept that employees typically steal far more than customers, this only makes good business sense.
When you have employees who make relatively low wages, working in jobs that offer little mental stimulation, you will always run the risk of having theft. No matter how much technology exists, the employee who wants to steal, or who wants to “sweetheart” will figure out a way around the security.
I used to work at a supermarket chain 30 years ago, before bar codes were printed on coupons. We had a cashier who would have her friends clip coupons, come through her check-out counter, and she would ring up all of the coupons, giving the money back to her friends, ultimately splitting the proceeds. She didn’t feel she was stealing. The supermarket made money on the 8 cent redemption, and they received all of the money back from the manufacturer. No matter what technology was built into the system, she figured out a way around it.
The answer is not necessarily technology. The answer is better hiring practices, and treating the employees better. Ultimately this will reduce the theft and shrinkage in a store.
I am sure the camera is a good tool, but in this day and age, I would think that looking at the cost to man cameras or review film has to be done in a much more sophisticated manner. There should be an easy software program that can monitor odd or small denomination rings or more manual rings than normal as a more efficient manner for tracking. From my memory, it was never that the cashiers passed merchandise for no charge, but rang up much smaller numbers for items like meat and general merchandise that should be easier to track.
Cameras and security, and checkout staff are needed in the current environment. RFID and the associated automated payment methods that come with this technology could wipe out thefts at the checkout and the need for a cashier.
Security to help avoid employee theft is a necessity. However, this should not be kept a secret. All employees should be made aware that cameras are in place. Knowing this, employees will be less apt to commit theft. No reason to be sneaky about it. It’s a fact of life.
“Sweethearting” is the worst component of internal theft. It is hard to catch and the the temptation for cashiers is always in their face. That, combined with a relatively low wage, is a double threat for the retailer.
I agree that cameras are needed but as obvious units are intended to deter and detect, a morale issue comes into play. I like to deploy more covert ways to detect. Mystery shops are great way to root out those who let merchandise go for free. Cameras should be hidden if going the video route. I would be curious to see the costs associated with the human tracking software to see if it can be applied to lower margin retailers.
Employee theft has always been a problem, but I wonder how much of it is “encouraged” by retail’s treatment of employees. In may cases, retail employees are paid less and treated worse than employees in most other lines of work. Few employers ever think about talking to employees about “a future in retailing.”
I wonder what would happen if an employer actually went to the trouble to train an employee, talk to them about long and short term opportunities and paid them $15 per hour. Oh, along with this would come responsibility–shortages would be deducted from pay and benefits would be offered only to employees with some established track record for being on time and achieving certain performance goals.
Why do we have to keep doing things like they have always been done and expecting the results to change? Why do we think that the only way to modify behavior is to send people to prison? Think a little and offer people an alternative, a better way–people may surprise you!
This element has always been a concern going back many years. I too worked in the stores 30 years ago and it was prevalent then. You might make the case for better hiring practices and better wages, but the temptation will still be there. No matter what you pay your employees, there will always be those who feel they deserve a little off the top.
Agreed; early security systems were focused on shoppers and not so much employees–and the employees knew that–but that has changed.
I think it’s important that at the time you bring a new employee aboard, you make them aware of the systems you have in place and that you are aware of what happens. I would also let them know of the penalties that are associated with any sort of crime, including termination and possible criminal charges. I would think that hard swift action against someone who is caught will make others stand up and notice.
Certainly this will not deter all actions, but I think most people are not willing to lose their job or worse yet, face a criminal record, for a few bucks.
Technology and sophistication are available to both monitor cashiers and other employee areas in the store and to tie it back to performance monitoring software. These two in combination not only help reduce theft but also–more importantly–add to the opportunity to improve training and provide training follow up.
The key to everything surrounding this issue is awareness, education, training and an ongoing conversation. The biggest key to success is the ongoing conversation. In particular, with shrink reduction, you get what you talk about. It is important to monitor, discuss and act upon anomalies as they occur. Many of these are training issues, reinforcement of policy issues and corrections. These too are part of shrink reduction. They are equal to or greater than theft, as real, intentional theft is a very small percentage of the other areas of costly shrink.
Retailers that educate and provide a consistent conversation about shrink control and reduction can save huge dollars annually. They can also create better and more confident employees. Further, they enhance the role of the employee in the overall success of the retailer by enhancing their knowledge of each associate’s role in profitablilty and how they impact it, as well, as how it benefits them.
There is a wealth of knowledge in this entire area. Yet, few retailers–like with anything–rarely make it a priority. Those that do find great success.
The more you know the less you risk and by knowing what is happening at the cash register and everywhere else in the store, the less you will risk.
At one point in time, a study by the US Justice Department reported that 1/3 of employees are hardcore thieves. Other studies have shown the number is more like 20% of employees will always try to steal from you. About 10% will never steal no matter how you treat them or what the opportunity, and 70% will react to the way you treat the people who steal from you. If you take a hard stand they will be honest if you are lax they will also start to steal.
Most employees know that the worst thing that will happen to them if they get caught stealing is they will get fired. So what is the real deterrent to stealing if when people call to get references, you won’t tell them anything anyway?
When companies and law enforcement take a hard stand against employee theft, the shrink rate will go down.
Camera data infused with business intelligence (like StopLift and IntelliVid) take much human intervention out of the process. If exceptions are sent to appropriate managers, the data will be much more useful. That’s where the industry is going.
I work for Albertsons Food Stores and I am in charge of safety training. One of the best ways to prevent employee theft is to initially explain the consequences of getting caught stealing, sweethearting or consuming merchandise without a receipt. After the safety training is complete, I then walk the store with our new associate and show them where our cameras are located, this includes the monitoring station where our loss prevention associate is then introduced to the new hire.
I believe that when you initially give a new associate a lot of attention and explain the rules, it will result in better employees.