There are two ways employees steal from you:

First, they can consume or take merchandise without paying for it. Unless you catch an employee in the act, it's very difficult to determine whether this is a cause of shrinkage in your store. However, you can watch for the following indicators of merchandise theft:

• Empty wrappers (evidence of "grazing").
• Car parked beside the store - behind the store - or next to the dumpster (making the removal of stolen merchandise less obvious).
• Employee's purse or garment in area in which he/ she works (either could be used to disguise stolen merchandise).
• Employee writes off merchandise as spoiled or damaged and supposedly throws it out (employee could be taking the merchandise home or selling it on the street).
• Never willing to take a break - especially with others (doesn't want to be seen stealing merchandise).
• Friends or family of the cashier going through his/ her checkout (cashier may not ring up all items).
• Cashier carries out trash right before lunch or right before shift ends (may have stolen items concealed in the trash)
• Sack of groceries next to the checkout with no customer around.

The other way employees steal from you is by taking cash from the register. Employees can steal cash out of the register without creating a cash shortage or overage by failing to ring up sales. When you perform a physical inventory, it may appear that merchandise is walking out the door-, however, you are actually losing cash.

Two techniques are commonly used by employees when failing to ring up cash sales. In the first, the employee decides how much cash he plans to steal and removes that money at the beginning of the shift. During his shift, he "pads" the register with the amount stolen by failing to ring up cash sales until the shortage is covered. This technique is somewhat risky in that a surprise cash audit could detect the shortage. Employees are likely to be questioned about shortages.

The other method is to "pad" the register with cash from sales that have not been rung up, then remove the extra cash at the end of the shift. In this situation, a surprise cash audit would find an overage instead of a shortage. Dishonest employees generally feel more comfortable with an overage since they are less likely to be questioned.

The two most popular ways used by employees to bypass the register are hitting the "No Sale" button and working out of an open drawer. Other methods are over rings, voids and refunds.

Following are "signs of stealing" that you need to be watching for at all times:

• Excessive "no sale" rings, over rings, refunds, voids - all could indicate theft. Check those daily reports!
• Excessive bottles returned.
• Overage or shortage patterns on register - even small overages could mean the employee is voiding out larger sales, but not removing the sales tax from the register.
• Average sales for a particular shift drops when a particular cashier is working (especially if there are excessive no sale rings and/or wide time gaps between transactions)
• Adding machine, electronic calculator or tally sheets next to the cash register (the employee might be using these to keep track of how much the register has been padded)
• Cash drawer left open between sales (unless the register is broken, there is no legitimate reason for the employee to work out of an open drawer)
• Blocking the cash register window with signs or stacked impulse items (employee may not want customers to see that he/she is ringing the transaction as a "no sale")
• Loose change, poker chips, paper clips, bent matchbooks, or any item on, around or in the register that might represent a system for keeping track of how much the register has been padded
• Employee has more than one "x" reading during their shift (might indicate an employee's attempt to find out the amount of cash he/she is still over or short)

Note: An "x" reading tells you how much cash you should have in the register Not a// registers have this function.

• Early check-outs (employee may want to remove the "padded" cash before another employee arrives to relieve him/her)
• Shift control sheet is not completed (employee may not want to draw attention to suspicious register variances during his/her shift)

OTHER EMPLOYEE RED FLAGS

Employee quits without notice. This action could indicate that the employee has been stealing or it could give other employees the opportunity to steal, casting the blame on the departed employee.

One employee suspects another. In this situation, everyone in the store has the opportunity to steal and blame the suspected employee.

Employee complains of shoplifting or vendor theft. You could well be in the process of being conditioned for a shortage that has already occurred.

Employee suspects someone was in the store after hours. This could indicate that either you are already short or you are being conditioned for a future shortage.

Employee complains that the register is not working properly. You may be getting set up for a shortage.