Retailers often focus on shoplifters, but what if the real threat is inside the store? Employee theft is just as damaging as external theft — yet it’s often overlooked until it becomes a serious problem.

In fact, the National Retail Federation reports that the average loss per employee theft incident is $2,180. These losses add up quickly, especially when theft is part of an organized retail crime operation. 

Balancing trust and security in the workplace is key to addressing this issue effectively. The right approach deters theft without harming employee morale, ensuring a secure and positive work environment.

Why employees steal and why addressing theft matters

Retail employees steal for various reasons, including:

• Financial challenges: Some employees resort to theft because their wages don't cover their financial needs. 
• Thrill-seeking: For some, stealing isn’t about necessity — it’s about the excitement of getting away with it. 
• Resentment: Employees who feel undervalued or mistreated may steal as a way to "get back" at the company. 
• Opportunity: If your security systems have vulnerabilities, some employees may take advantage of the situation because they believe it will be easy and risk-free.

Employee theft is a major contributor to retail shrinkage, accounting for 37% of total losses and costing businesses nearly $50 billion annually. Beyond financial damage, unchecked theft can create a toxic work environment, eroding trust among employees and damaging customer confidence in your brand.

However, addressing theft requires a strategic approach rather than direct confrontation. Publicly accusing an employee of stealing can escalate conflicts, disrupt store operations, and expose your business to liability, especially if mistaken apprehensions occur. Instead, focusing on prevention and long-term deterrence is the safest and most effective way to protect your store. 

Investing in technology like video cameras and license plate readers (LPRs) can help retailers take a proactive stance. Flock Safety's LPRs assist law enforcement in building cases against repeat organized retail crime offenders, often leading to successful prosecution. Over time, criminals learn that your stores aren’t an easy target, reducing their incentive to collaborate with employees in theft schemes. 

Flock’s LPRs have already helped businesses combat retail theft: Academy Sports helped law enforcement apprehend an offender just 20 minutes after they left the store using Flock's LPRs and intelligence software. 

Practical strategies to prevent employee theft in your retail store

Here are some effective steps for reducing employee theft:

Establish clear policies and procedures

Clear rules around inventory management and workplace behavior make it easier to identify discrepancies in your stock levels and deter theft. Some key policies to consider include:

• Regular inventory checks: Compare your sales and stock regularly, including occasional spot checks, to catch inconsistencies early. Employees are less likely to steal when they know you conduct periodic audits. 
• Controlled access to sensitive areas: Some theft happens simply because it’s easy. Limit access to high-value inventory and use time-logged systems to see who enters restricted areas and when. 
• Anonymous reporting systems: Give employees a way to report concerns without fear of retaliation. This encourages accountability and helps prevent issues from escalating. 

Foster a culture of trust and accountability

A negative work environment may increase the likelihood of theft incidents. Creating a culture of trust and accountability helps employees feel valued and respected, making them more likely to report suspicious behavior and allowing you to take action early. 

Some ways to foster trust and accountability include:

• Address underlying issues like poor working conditions or low wages. 
• Recognize and reward employees for integrity and exceptional performance. 
• Organize team-building activities to strengthen relationships between coworkers and management. 
• Encourage open communication and ensure employees feel heard when raising concerns about your workplace environment.

Screen candidates thoroughly before hiring

People who have stolen from one employer may do so again, though this isn’t always the case. That’s why it’s important to take extra steps during the hiring process to minimize risk.

• Conduct background checks and verify references to flag any past issues, such as suspicions of theft.
  
  
• Assess cultural fit to ensure candidates align with your store's values — employees who feel connected to your business are less likely to engage in behavior that undermines it. 

Keep an eye on inventory and operations daily

Regular inventory audits and reviews help catch discrepancies quickly so you can take appropriate action. If you notice irregularities, follow up with your team to determine whether it’s due to a mistake or something more concerning, and log the incident. 

Use a reliable and reputable tool to log and track irregularities that might indicate theft. This way, you'll have the evidence needed to take legal action if you decide to escalate the issue to law enforcement. 

One such solution is ThinkLP, which provides a central location for storing incident reports, making it easier to track security threats and investigations. 

Update rules and procedures as needed

Employees may find ways to exploit gaps in policies over time. Regularly reviewing and updating procedures helps prevent new challenges from slipping through the cracks. For example, if you suspect employees are misusing refund permissions, review your point-of-sale (POS) system access policy and require management approval for all refunds. 

Provide employee training whenever company policies are updated to ensure everyone understands expectations and consequences. Encourage management to reinforce these changes, even after training, to eliminate confusion. 

How Flock Safety can help you deter employee theft in retail environments

Beyond implementing strong policies, it's also important to invest in physical retail security measures to prevent shrinkage. Flock Safety can help: We provide LPR technology and cloud-based security monitoring tools to help minimize the risk of shoplifting in supermarkets (and other retail stores), robberies, and internal theft. 

Use license plate recognition to monitor deliveries

Many stores keep inventory in units behind their retail locations for easy access. These areas can become targets for theft, especially if employees collaborate with external individuals or groups. 

Flock Safety's LPR cameras help reduce this risk by monitoring restricted areas like stock rooms and sending alerts when vehicles enter at unauthorized times. Our technology also shows which trucks arrive at your retail locations from distribution centers, providing video corroboration and timestamps to help determine where losses occur. 

Further, our convoy search feature helps identify which vehicles are traveling together — sometimes a sign of coordinated theft. For example, it can flag a car tailing a delivery truck from a distribution center to your store, giving you time to take preventative measures. 

Capturing this data provides actionable insights, such as offenders' license plates, to assist law enforcement in identifying and tracking criminals.

Enhance security with data-backed tools

Flock Safety's cloud-based tools can facilitate smarter parking lot security and help monitor other high-risk zones around your store, reducing opportunities for external collaborators in employee theft schemes.

Our technology allows you to identify suspicious vehicles by flagging anomalous activity, such as frequent visits to multiple locations. It provides suspects' license plates and additional video context, helping to identify individual offenders, potential employees, and related vehicles. 

This information improves parking lot safety by pinpointing repeat offenders and expediting law enforcement investigations. It also increases the chances of hard recoveries, minimizing financial losses. 

Partner with law enforcement for a stronger case

Flock Safety makes it easier to collaborate with law enforcement if you decide to take legal action. Our technology provides clear, actionable data on incidents, including details on the vehicles used, timestamps of when the theft occurred, and video evidence.

Additionally, our intelligence platform, FlockOS, integrates data from multiple LPRs and security cameras, allowing law enforcement to track suspect vehicles in real time. This improves case resolutions and helps deter repeat offenders.

Create a more secure retail environment with Flock Safety

Employee thefts can cut into profits, erode customer trust, and disrupt store operations. To mitigate these risks, it's important to implement preventive measures — such as fostering a culture of trust and accountability, conducting daily inventory audits, implementing strong hiring practices, and using modern security tools like LPRs. 

Flock Safety helps retailers tackle both internal security challenges and external threats by capturing offenders' license plates and flagging suspicious activity, such as repeated visits to restricted areas. These insights support law enforcement in building strong cases against suspected offenders, increasing the likelihood of prosecution and deterring future theft. 

Book a demo with Flock Safety today to see how our innovative technology can help minimize internal theft.