Enhancing retail security: Combatting insider theft

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In the dynamic and ever-changing landscape of the retail sector, the imperative task of thwarting theft has undergone substantial transformations. A cause for heightened concern arises from the significant uptick in employee involvement. This article delves deep into the intricate tactics employed by employees to pilfer from their employers, shedding light on effective mitigation strategies. A special emphasis is placed on the pivotal role of pre-employment screening and the inventive application of behavioral assessment software to fortify security measures.

Understanding the nuances

The 2023 National Retail Security Survey identifies four primary methods employed by unscrupulous retail employees for internal theft: merchandise theft, refund fraud, cash theft and the act of passing merchandise off to associates. While merchandise and cash theft are relatively straightforward, refund fraud involves intricate schemes such as return and receipt fraud. Coordinating with associates introduces additional challenges, including sweet hearting, sliding and free bagging, thereby complicating efforts to combat internal theft.

Effective mitigation strategies

Five top-tier mitigation solutions are recommended to prevent, identify, or investigate incidents of internal theft: Exception-based reporting (EBR) software, video surveillance systems, employee training and awareness programs, tip hotlines with rewards and point-of-sale systems equipped with notifications and alerts to detect anomalies. Despite the efficacy of these solutions, a critical gap persists in many retailers' mitigation strategies, particularly in the oversight of pre-employment screening. To address this gap, retailers should adopt a more comprehensive approach.

Challenges in pre-employment screening

Compounding the challenge, many states have passed legislation to “ban the box,” meaning that questions about an applicant's criminal history cannot be asked until after an offer is made. Some states have also imposed restrictions on how far back an employer can check, which crimes can be grounds for dismissal from consideration and in one instance, an applicant should be eligible for employment five years post-conviction. Consequently, criminal background checks are becoming less readily available, with more restrictions anticipated in the coming months.

A multifaceted approach

As retailers grapple with the escalating challenge of internal theft, adopting a multifaceted mitigation approach is imperative. While traditional methods remain crucial, incorporating innovative behavioral assessment tools into pre-employment screening can be a game-changer. By embracing the technologies highlighted in this article, retailers fortify their defenses, ensuring that the initial defense against organized retail crime commences at the hiring stage. In doing so, the retail industry collectively works towards safeguarding its integrity in the face of evolving security threats.

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Alan Saquella, CPP, is an influential security and investigations expert with more than 30 years of security and investigations experience in corporate and public organizations at the executive level. He served for many years as the Security Operations and Investigations Director at Cox Communications before assuming his current role as a faculty team member at Embry-Riddle Aeronautical University — College of Business, Security and Intelligence. Saquella is also the Director, Investigations and Research at Verensics and a Member of the Identity Theft Advisory Board. Image courtesy of Saquella

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