Whether you own a boutique clothing shop, a large hardware store or a discount furniture depot, one of the biggest threats to your business is employee fraud. The 2017 National Retail Security Survey estimated that 30 percent of inventory loss could be attributed to employee theft. While 36.5 percent of loss is due to external shoplifting, 21.3 percent to paperwork errors, 5.4 percent to vendor fraud and 6.8 percent to unknown sources, a 30 percent stake in inventory loss should be enough to make any business owner a little more proactive about spotting and preventing inside jobs.
This is by no means a comprehensive list of every scam out there, but it does shed light on the signs of some of the most common retail employee scams and what you can do to stop them from happening.
1. Gift card fraud
Thanks to improved technology and pricing, even small retail establishments can create and sell branded gift cards. Of course, every technological step forward brings new challenges with it, and gift card fraud is one of them. Here are a few ways employees can make money from gift card scams.
Swapping out gift cards
The method of swapping out gift cards works best (for employees) in high-traffic stores that don’t depend on return customers. Stores that cater to tourists or have heavy one-off traffic during certain seasons are more likely to experience this type of scam.
In a gift card swap, an employee will ring up and activate a gift card for a legitimate paying customer and then hand the customer a gift card that hasn’t been activated and cannot be used. The employee will then run the cost of the gift card through the system, so when the register is closed out, everything looks fine. However, they’ll pocket the activated gift card and resell Read More Here