Tony Gallo, Managing Partner of Sapphire Risk Advisory Group, has been in the business of Loss Prevention for more than 30 years. He served as a Loss Prevention Director, as well as a security consultant for retailers, restaurants, financial loaning services, and more.
We sat with Tony Gallo and asked, “What is one of the biggest threats you see for businesses trying to prevent loss?”
The answer? – Internal Theft.
This makes sense. More than 40% of inventory shrinkage is due to Internal theft, with 75% of employees having stolen from their employer at least once. The problem costs U.S. retailers more than 50 Billion dollars each year.
How can internal theft be responsible for such an enormous loss?
“It happens one dollar at a time,” said Gallo.
Gallo says that in all his years he learned that there was a commonality through each industry. There was always one “thing” if you will that everyone stole. For example, at a multi-location car repair chain, the most stolen items were car air fresheners. At a national women’s retail chain, nail polish was stolen significantly more than anything else in the store.
Gallo says that sometimes he was able to use the certain “thing” everyone steals to his advantage.
“Not all theft is in the form of small trinkets,” said Gallo. Many times businesses have a much larger theft on their hands. Many of these thefts require an investigation where the company looks for a confession. That’s where the common stolen “thing” comes into play. Getting a thief to admit to a large theft can be difficult, but Gallo says investigators can start with the small stuff.
“If we suspected a cashier had taken a large sum of money from the cash register, we wouldn’t get very far starting there in an investigation,” said Gallo, referring to his experience with a national women’s retail chain. “We would ask, ‘well, have you ever stolen a nail polish?’”
For such a small, commonly stolen item that they wouldn’t get in trouble for, a thief may be inclined to respond that they have. “Building up from there can make it much easier to obtain a confession,” Says Gallo. A thief is much more likely to admit to theft if it seems small.
While it’s possible to take advantage of the small thefts, how can these be reduced? After all, the 50 billion in losses every year does happen “one dollar at a time”.
That can be a little tricky,” said Gallo. “It would really depend on the item and the circumstances of the business.”
What’s that one ‘thing’ commonly stolen from your business? Have an idea about how to efficiently reduce theft of small, inexpensive items?
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Written by: Krysten Demster