Employee theft at U.S. retailers alone accounts for about $18 billion a year. That’s just at retailers. But employee theft also occurs at other workplaces. So what can you do if you suspect an employee is stealing? Termination is the likely option that will cross your mind (and ultimately may be the right one), but there are some steps you should take beforehand. We’ll use a store with a cash register as an example. If you face a situation like this one, we recommend the following plan of action:
Conduct a complete and well-documented investigation into the incident. The information you find may provide a more complete picture or even reveal other instances of theft that were not previously documented. Call the employee and suspend them without pay while you conduct the investigation and get all the facts in order. You could say something along these lines:
"We are suspending you without pay pending an investigation into theft. We will need today and tomorrow to conduct the investigation and we will meet with you on Friday at 8:00 am to discuss the results of the investigation with you. Until that time, you are on an unpaid disciplinary suspension and are not to report to work."
If the employee asks a lot of questions, simply state that you will not have answers until the investigation is complete.
Step TwoWith a third party present as a witness to document the conversations, interview any employees who may have known about the suspected theft. Don’t use the employee's name in these interviews. Rather, ask questions such as:
- Have you seen anyone steal money from the cash register?
- Do you have any knowledge of any theft that may have occurred here?
- Did you see anything unusual on your shift last night?
- The cash register was short last night, do you know why?
- Is there anything else that you would like to tell me?
Make sure the third party takes detailed notes during these interviews. These notes should be put in the investigation file along with any security video footage you might have. Keep this file for a minimum of two years.
Once you feel like you have sufficient evidence to document the theft, meet with the employee. A third party witness should again be present. Here is some messaging that you could use:
"As you know, we suspected theft on the Tuesday night shift. After the cash register was short, we checked the video footage which clearly shows you stealing cash from the register. We have conducted a complete internal investigation into the incident and we have determined that you violated our cash handling policies. This is a very serious violation and we have made the decision to terminate your employment effective immediately."
At this meeting, be sure to follow all your state requirements for separation notices, final paychecks, and unused vacation pay. Even though the employee stole from you, it is important that you provide the final paycheck without deduction. Also, if the employee participates in the company-sponsored insurance plan, give them a COBRA Notice and Election Form, which explains how they may continue their benefits.
Terminations always come with some risk, so the more you can do to document your reasons for a termination, the better off you’ll be.
While all employee theft may not be preventable, having sound policies in place that quickly address suspected incidents can be an effective deterrent.