When business owners hear about “internal theft,” they invariably think “employee theft.” But internal theft involve anyone who has “back room” access to your business.
A tradesman repairing your air conditioning while stealing your laptop.
A sales rep promising you a special price on a drop shipment, then, when the bill arrives later, he has boosted the price.
A delivery driver who lugs twenty pallets of goods out of his truck into your stockroom then, when you are not watching, loads a couple of cartons back into the vehicle.
A supplier who deliberately short-ships.
These are just a few of the “internal theft” situations where businesses lose millions every year, blind to the risks because they trust these people.
Then, the perfect storm. In any of these situations, if you have an employee who colludes with any of the above personnel multiplies the risk of loss eponentially.
Lastly, there is willful loss that is led by business owners, without them realizing it.
I had a client who owned four pharmacies. He also had a gambling problem. In his home store, he directed his two primary cashiers to fail to record a few purchases each shift, and let him know exactly how much income had not been recorded on the register. He would withdraw that amount every day so that he could go to teh casino and gamble. Revenue Canada would never know.
His employees diligently obeyed him to the tune of about $150 per shift. But the two didn;t stop there. they also failed to record about the same amount for themselves. By the time I became involved, two years after the first employee had been hired, she had taken an estimated $170,000 and her sister slightly more, sending the money overseas to family.
I was able to extract a confession of $38,000, even though we all knew the amount was much higher. Both employees were charged with theft and fraud. As a plea bargain, they returned to their country of origin, but made no restitution.
The owner, meanwhile, had gambled that his collusion would save him taxes. It ended up costing him his business.
Internal theft is pervasive and a much bigger risk to a business than external (shoplifting) theft. Yet, owners ignore the risks every day.
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