Tips On Employee Theft Prevention

Employee theft costs business hundreds of millions of dollars each year. Here are some tips to help limit your losses.

Things To Do-

Insist on complete honesty in dealing with customers, fellow employees and the company. Management must lead by example in showing that dishonesty will not be tolerated.

Develop a control system to trace the handling of cash, and merchandise including shipments in and out of your facilities. Review and test your control system to find weak points that may leave you vulnerable to theft or embezzlement.

Deposit cash receipts daily. Mark incoming checks “for deposit only” as soon as received. Have a person not able to sign checks reconcile checking accounts. Keep bank signature authorization cards up to date. Change door locks and computer passwords on a regular basis. Track mileage on company vehicles.

Ask applicants about any criminal convictions and consider seeking a criminal history record request from the State Police (in Maine Call 624-7009). Keep such records confidential. Verify facts thoroughly before taking any adverse action based on any prior criminal record.

Treat suspected incidents consistently, without favoritism or special treatment to any person or group. Remember that proving employee theft or embezzlement will require proof beyond a reasonable doubt. Keep an open mind until proof beyond a reasonable doubt is obtained.

Treat all persons interrogated in a professional, non-accusatory fashion – especially the suspect. Be patient and thorough when questioning suspects – get the minute details and check them out.

Advise employees in employment applications and personnel handbooks of your policy regarding searches of lockers, personal handbags, briefcases, etc.

Obtain consent, in writing or in the presence of other witnesses, before searching any employee unless you know and follow the rules under which non-consensual searches may be made. Obtain an admission of theft or embezzlement in writing as soon as the suspect confesses. Keep in mind that the thief or embezzler has almost certainly stolen or embezzled more than he has confessed. Insist on immediate restitution. Keep the issue of restitution separate from the decision to press charges.

Consult legal counsel before firing an employee for theft, or pressing criminal charges.

Assume that you will have to take the lead in proving the theft or embezzlement.

Review your employee dishonesty insurance. Give appropriate notice of any claim to your insurer. Remember that knowledge of prior criminal or dishonest acts can make future claims against an insurance policy invalid.

Things Not To Do-

Do not act on assumption or second hand information.

Do not tell an employee he is being fired for theft unless you are prepared to prove the theft beyond a reasonable doubt. Do not press charges against a former employee unless you can prove those charges beyond a reasonable doubt.

Do not fire an employee suspected of theft without first conducting a thorough investigation, including careful interrogation of the employee in an attempt to obtain a confession.

Do not ask employees about prior arrests or make decisions based on arrest records.

Do not promise or suggest that you will not prosecute if the employee makes restitution.

Do not directly or indirectly require, request, suggest, use, or inquire about polygraph tests without competent legal advice.

Do not disclose facts concerning an employee’s misconduct or suspected misconduct unless the person to whom you reveal it has a clear need to know and you are prepared to prove the truth of what you disclose.