There are a myriad of ways employees steal from their employers, but a few stand out. Take labor fraud, for example. Recent studies have uncovered high levels of »time theft«, with more than 30 percent of employees admitting to fraudulently claiming more hours than they worked. Other significant sources of theft occur at the POS terminal, including fraudulent discounts, overrides, line item voids, suspended transactions, and refunds outside of allowable transaction thresholds.
For restaurants, an industry that survives on razor thin margins, the impact of employee theft can be devastating. To put the problem in perspective, a retailer that earns a profit margin of 5 percent would have to sell €2,000 in merchandise to make up for every €100 stolen by an employee.
Much of the theft attributable to employees is opportunistic. Employers inadvertently provide the means to steal and even encourage theft when there aren’t adequate controls established for labor reporting and POS transactions. The opportunity is reflected in risk-reward calculations employees often make when they consider whether or not to steal. Essentially the three-pronged rationale used is:
There is a widely recognized series of steps necessary to address internal theft. They range from prevention and awareness to investigation and prosecution. It is also widely known is that prevention is the best strategy to reduce employee theft. Deterrence, rather than detection and prosecution, is a much more cost-effective and manageable means to deal with theft. As they say, »You can’t prosecute your way out of a shrinkage problem.«
Traditional access controls, such as passwords, PINs and swipe cards, have been ineffective in preventing labor and transactional fraud; they are too easy to share and steal. Although analytics can flag suspicious transaction patterns, without secure credentials irrefutably tying employees to transactions, excuses such as »Someone must have stolen my password« stymie prosecution.
Biometrics provide a viable method for putting a dent in employee theft. Adapting a »Situational Crime Prevention« framework in conjunction with the use of biometrics offers not only theft prevention benefits but also provides an irrefutable audit trail that counters commonly used excuses during investigation and prosecution.
In 2003 Ron Clarke, of Cornish & Clarke, developed an array of situational crime prevention techniques. He arranged his techniques into five categories. Integrating biometrics into this model results in a promising approach to dealing with internal theft:
For QSR restaurant owners struggling to compete in today’s ultra-competitive market, reducing profit loss due to employee theft is crucial for their financial well-being, but traditional approaches have not been adequate to the task. Biometrics at the POS holds great promise for finally stopping the hemorrhaging of profits due to employee theft.
