While there are more obvious indicators of theft in the retail sector, they are shared by many other industry segments. They also tend to be more obvious, since employees generally have the time and the ability to hide their tracks better.
The indicators in retail involve many more people than processing, manufacturing and warehousing, too.
Employees
Chits
Chits are commonly used with cashiers or customer service refund & return desks where, in order to keep track of the amount of money that that employee has to take out from the till at the end of the day, they need to keep a official reminder. Different items may represent different amounts. For instance, dimes beside the cash register may mean $10 increments, while folded customer receipts may represent $5. Note items that should not be accumulating in the area and monitor to see if it is inadvertent or forms a pattern.
Employee living too well for job pay
Pay close attention to employees that seem to have more of the toys and material goods or even holidays than their salaries would warrant. Even though you may not know the income of a spouse or partner or family inputs, it is important to take note of people that are living a lavish lifestyle that exceeds the income levels that you provide as an employer.
Personal belongings in work area
Personal things such as backpacks, shopping bags or even purchases that the employee has made should not be in the work area. This practice allows the employee to put goods into those bags before they leave for work or when it is quiet (providing them with the opportunity to do so). While belongings in the workspace is an indicator that they have an opportunity, it is not necessarily indicator of theft.
Condescending employee or braggard
An employee that brags and is condescending is just as risky as the employee makes lots of excuses for their work. The employee that has low productivity yet brags about his capabilities or is condescending is an employee who warrants attention. He may have an attitude that often leads to believing that he can outsmart the system, if not the people around him. He is more likely to be theft prone or willing to engage in fraud.
Employee makes habitual excuses
Aside from being an employee that is a bit of an agitator or that can create unrest in the workplace, the employee that makes excuses for errors, makes excuses for lateness, makes excuses for not having done work or makes excuses for missing items is an employee that we should pay particular attention to.
Stockroom in disarray
Stockrooms that are well-maintained and well-ordered are easier to monitor. Look for signs that specific desirable items are frequently out of place.
Receiving door area not organized as per policy
Receiving and shipping door areas are particularly vulnerable to loss through carelessness and theft. Ensure that return/repair items are in one designated area and marked, that incoming stock is distinctly separate from outgoing or inventoried items and that all paperwork is filed appropriately. Poor recordkeeping, stock disorganized or items that are not faulty (or designated for return) that are found in the outgoing or return area may indicate a theft track.
High-theft items near remote exits
Highly desirable items that are located out of place and near remote exists may be awaiting an opportunity to be taken out the doors when the opportunity arises.
Wrong items in open boxes
Do periodic checks of open boxes to see if items not matching the boxes are within. This method of pirating items out of a store are common.
Garbage handling & Boxes or bags not inspected
Inspect garbage area before garbage goes out, and do dumpster checks often to see if merchandise is being placed in the bins for later pickup. This area is very vulnerable. If possible, hold garbage inside store until the stockroom personnel can discard goods in the presence of another employee. Cameras are effective here.
Discounted, sale and clearance items stockpiled
Employees may believe that stockpiling or holding back sale items or discounted items to be purchased by them is not a problem, but it affects good customer relations. Check to make sure that the discounts and pricing is accurate, as well. Many incidents of employees reducing the price of items to give themselves a deal occur in stores. This includes clothing, seasonal items and food.
Inappropriate markdowns
Similar to hoarding of discounted items, inappropriate markdowns for damage that does not exist are indicators of potential theft or fraud.
Meeting with friends and family
Casual conversation with a customer, whether family or friend, may be innocent, but secretive, prolonged or frequent encounters may also indicate potential collusion for theft or fraud.
Preferential cashier for regular customer
Sometimes, customers develop a preference for one cashier over another, This is normal. However, cashiers should be discouraged from ringing up friends or family, as this provides a temptation to cut deals for that preferred customer.
Careless scanning habits
Watch (via camera or in person) for careless scanning habits of cashiers with specific customers or blocking of UPC code when passing items over or around the scanner.
Excess wastage in key departments (meat, bakery, produce)
While good policy is to enforce the regular practice of marking every bit of wastage or markdown in key departments (and the reasons for it), high levels of waste may indicate that the waste actually is saleable goods that the employee is setting aside for their own benefit.
Cash area to office movement of cash
Monitor how cash is moved from checkouts to cash counting office and whether there are any times when the employee handling that cash is out of the line of sight.
High refunds & returns
Customer service desks are granted a lot of latitude in handling complaints, refunds and returns. However, that freedom also presents opportunity. Monitor and match transaction ratios among all of the customer service personnel to note a trend with one employee that may indicate deviance.
Frequent open drawer, No Sale or item correction transactions
Although credit card and debit card transactions are significantly more common than cash transactions, open drawers when handling sales, high number of voids, No Sale or Item Correction activity on a cash drawer may indicate an opportunity for theft or fraud.
Customers
Customers pose the most easily recognized risk to store assets and leave numerous tracks when doing so.
High theft items moved to remote locations
Items that customers are intending to steal may not be readily concealable where they are usually displayed. In order to find privacy where the shoplifter may conceal merchandise, they often move those items to remote or isolated areas of the store. If they are interrupted while in the process of concealing goods, they will abandon the items there.
Merchandise out of place
Similar to items in remote locations, items moved to adjacent aisles may indicate the customer has changed their mind about the purchase, or they were looking for an opportunity to conceal the goods.
Empty packages
Empty packages are clear indicators of theft that has occurred. Note where the items are found, as this may be a suitable area for other shoplifters to make a theft attempt.
Empty carts not near high traffic areas
Empty carts and baskets, or baskets with a couple of random items that are abandoned in random locations in aisles often are indicators that a customer has been shoplifting. Usually, customers return crats to the front of the store if they have decided they are not purchasing.
Inappropriate attire for outside conditions
Bulky jackets in summer or baggy clothes with large pockets provide a great means of concealment.
Random shopping habits
Grocery stores are laid out predictably, with a “racetrack” around the perimeter that includes bakery, produce and meats. Customers follow this racetrack, then move sequentially up and down the aisles. A shopper with a cart that is moving randomly may be looking for quiet areas to conceal goods. Notice whether there is a preponderance of budget or regular items in the body of the cart and high-theft items in the carrier portion.
Holes in displays
If there are three or four empty spots in a display of theft-prone items, but the rest of the counter is well-faced, you may be noticing an indicator that those items have been stolen.
Multiple items relocated on racks
Shoplifters who are stealing clothing often will gather many items together, move to a more distant location and remove the items from the hangers in order to bag them discretely. If you find a group of such apparel on a rack where they should not be, and away from change rooms, take note of customers loitering nearby and be aware that this, or multiple empty hangers in that area may indicate theft.
Sales representatives and delivery drivers
Sales representatives and delivery drivers have multiple opportunities to steal or commit fraud, largely because they have access to offices and paperwork, receiving and stock areas and the salesfloor.
Refunds, returns, credits and exchanges
Many companies and businesses grant reps permission to issue all of these merchandise adjustments and often are unchecked. Take note of sales reps with inordinate quantities of inventory adjustments and ensure validity of quantities and pricing.
Frequent unmonitored travel between stockroom and salesfloor
Take note of sales reps and delivery personnel moving often between salesfloor and stock room to ensure they are not removing merchandise.
Unmonitored incoming or outgoing inventory
Be aware of delivery personnel who bring in or take out goods without being checked by staff in charge. Make sure the appropriate paperwork accompanies all goods.