4 Ways to Prevent Retail 'Sweethearting'
Retail sweethearting costs U.S. businesses $50 billion dollars every year and contributes to a large portion of overall retail theft, CNBC reports.
11:07 02 July 2020
That means employers both small and large need to ramp up their loss prevention efforts to ensure they keep more of their money in their pockets.
Let's take a closer look at what retail sweethearting is and how you can prevent it from happening in your small business.
What Is Retail Sweethearting?
Retail sweethearting is a common type of retail theft that occurs when employees give discounts to their friends, family or significant others while they're on the clock. Sometimes, it's more than just a discount; employees just give items away to people they know without making them pay anything at all. Some employees might also do one of the following things:
- Change the price of a product
- Intentionally void a product after scanning it
- Give refunds or store credit for products that were never purchased in the first place
If you've ever received a discount at any retail establishment or gotten something for free at a fast-food restaurant, you've participated in retail sweethearting.
Here are four ways you can prevent retail sweethearting in your small business.
1. Establish Clear Policies
Make it clear to new and existing employees that highlight the consequences of giving away free merchandise or giving unauthorized discounts to family, friends and spouses. Let your employees know that any such activity could lead to the termination of their employment and/or criminal prosecution. Making this clear at the time of hire can help prevent sweethearting from occurring right from the start. The sooner your employees know the deal, the less likely they are to try it, and the more money stays within the business.
2. Purchase a Security Camera System
Having a small business security camera system properly positioned near the cash registers, bars, takeout areas and other customer service areas can help prevent theft by allowing you to closely monitor areas of your business that pose the highest risk. Find a small business security camera system that offers the features you need to capture every single detail, like pan-tilt-zoom capabilities and 4K video quality (which allows you to capture minute details, distinct features and facial characteristics).
3. Create a Whistleblower Policy
Developing a whistleblower policy gives other employees motivation to report any suspicious behavior that might lead to sweethearting or other forms of theft. Make sure the whistleblower policy protects the anonymity of any employees who report wrongdoing. You could offer some sort of incentive for those employees, but it doesn't have to be major. A small bonus or discount might do the trick.
4. Address Employees Associated With Irregular Transactions
About 75 percent of employees have admitted to stealing from their employer at least once, according to Statistic Brain. Monitoring irregular transactions and addressing employees associated with them can help you determine who the culprits are and stop them from violating the sweethearting policies you've put in place. Since 29 percent of employee theft cases lasted more than five years, it's important to get a jump on investigating any irregular transactions or suspicious behavior as soon as possible.
Putting the Proper Precautions in Place
With the proper precautions in place, you can prevent retail sweethearting and avoid taking a hit when it comes to your bottom line. By taking the necessary precautions, like creating a whistleblower policy, purchasing a small business security camera system and establishing clear policies about sweethearting, you can prevent theft from occurring in your small business.