Don't gamble with your company's investigation process.

Learn about i-Sight software today

Employee Thefts and Scams: Common Methods

Know what to watch for to spot and prevent fraud and theft.

Posted by Timothy Dimoff on December 15th, 2020

This has been an especially difficult year, with more people out of work, people working remotely and people experiencing emotional issues. For these and many other reasons, employee theft may be on the rise.

Now is a good time to review the potential types of employee theft that could be happening in your business. Knowing and understanding various types of scams and methods of employee theft, many of which can be difficult to catch, is important to save money and time.

While you can use video footage or analyze data to help catch and prevent fraud and theft, some schemes may be harder to spot, and any employee theft can translate into large amounts of lost revenue to a company.

 

You can't afford employee theft

Organizations lose an average of 5% of their annual revenue to fraud. Download our free eBook to learn 10 tips you can use to prevent employee theft and fraud.

Get the eBook

As an investigator, you can watch hours of video footage, review transactions and utilize other techniques to identify employee theft, but also knowing the common types and what to watch for will be helpful in preventing and stopping it. Here is some general information on common types of employee theft and scams that may help you:

Under Ringing

This is often difficult to spot, but essentially it means an employee is not charging a customer for all their items. Perhaps they are purchasing six items but the employee is only ringing up five of them. You probably won’t even notice it until you take your annual inventory.

Gift Cards

Employees have been known to tell customers that there is no balance on the card when there actually is. They then pocket the card instead of throwing it away as they told the customer they would do.

Skimming

This involves an employee charging a customer full price but then skimming a little of the cash for themselves. It also can involve a coupon code that is used but the customer does not receive the coupon discount.

Ways to detect this include a cash register imbalance. Be on the lookout for employees charging a customer cash and pocketing the difference between what they ring up and what they actually put into the register.

Family Discounts

This usually involves an employee who gives a discount to family or friends by using their employee discount code. They may also void a sale or fail to ring up products. This is often referred to as “sweethearting” and is known to cost businesses up to $100 billion annually.

RELATED: 5 Types of Employee Theft and How to Prevent Them

Product Theft

This is an obvious one but it can become complicated during an investigation. It often involves small items such as additional food in an order or even taking items from stock.

Often employees feel entitled because they feel wronged or neglected or even feel they are owed from the company. They may also feel the company can afford it and the item(s) won’t even be missed. They sometimes try to sell the products for a profit.

Direct Theft

Examples of this type of theft include an employee actually stealing from the company by taking money from a cash register, padding checks, embezzling, writing checks to themselves or family members and more.

When investigating these types of theft, be sure to look for employees who have access as well as motive. They may feel underpaid, taken for granted or have other issues outside of the office such as drug abuse, divorce or financial issues due to family issues, etc.

Time Theft

A business can lose money from employees who abuse the rules. This includes coming in late, leaving early or taking long breaks. Investigate these instances before hiring new people to pick up the slack.

RELATED: Detecting and Preventing Employee Theft: The Ultimate Guide

These methods of employee theft are common and simple. If you can prevent them from happening or catch them early, it will save you and your business a great deal of time and money.


Timothy Dimoff
Timothy Dimoff

President, SACS Consulting & Investigative Services

Timothy A. Dimoff, CPP, president of SACS Consulting & Investigative Services, Inc., is a speaker, trainer and author and a leading authority in high-risk workplace and human resource security and crime issues.
He is a Certified Protection Professional; a certified legal expert in corporate security procedures and training; a member of the Ohio and International Narcotic Associations; the Ohio and National Societies for Human Resource Managers; and the American Society for Industrial Security. He holds a B.S. in Sociology, with an emphasis in criminology, from Dennison University.

Visit Website

Book A Demo

To our customers: We’ll never sell, distribute or reveal your email address to anyone. Privacy Policy

Want to conduct better investigations?

Sign up for i-Sight’s newsletter and get new articles, templates, CE eligible webinars and more delivered to your inbox every week.