An Easy Antidote to Employee Theft

A leading security consulant is urging business owners to take a simple step that will make customers their first line of defense

For retailers large and small, the cash register is the center of the universe. It collects the bucks, measures success, and underwrites the future. Yet, the cash drawer often proves irresistible to light-fingered employees. According to the 2001 National Retail Security Survey conducted by the University of Florida, 46% of the $32 billion in total retail theft losses nationwide are due to employees helping themselves to the profits (to read the report in .pdf format click here).

Security consultant Bruce Schneier believes he has a simple way to make customers the first line of defense against employee theft. His solution: retailers should hang signs on their registers saying, "Your purchase free if I fail to give a receipt." Not only will customers have an incentive to pay attention to the action on the other side of the counter, it will also motivate them to report store employees who fail to hand over proof of purchase when making change, says Schneier, a cryptography expert and publisher of the monthly Crypto-Gram security newsletter.

Since ringing up a sale generates an internal record of each transaction, using customer pressure to create receipts will also produce a more accurate audit trail. Best of all, says Schneier, honest employees won't have any problem with a receipt-or-else policy, making the bad apples that much easier to spot. Not only are customers always right, they may also be your best security guard.

(What's Your Solution? According to the U.S. Chamber of Commerce, employee theft in retail and other businesses costs a staggering $50 billion every year. If your outfit has encountered the problem and controlled it, BusinessWeek Online Small Business would like to share your methods with fellow business owners. Drop us a line at, tell us how you identified the problem, and outline the steps to eliminate it. To encourage candor, writers will be identified only by their initials.)

By Alex Salkever

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