Internal Thefts Can Hit Vending Businesses Hard

June 1, 2017

I want to talk about an unpopular topic, employee theft. In doing some research for my family's small business (not vending related), I recently read a statistic that 30 percent of small business fail business of employee theft. This seemed extraordinarily high to me, and the source was an insurance company's blog, so I went further investigating.  

Security Magazine, a trade publication for security executives and management, published the results of a 2016 embezzlement study where 69 percent were at companies with fewer than 500 employees. That is scary, especially considering how autonomous vending, micro market and office coffee service route drivers are in our industry, and the size of many of the operations.  

The independence and unsupervised nature of a route driver is one of the things they like most about the job. And many vending operators still offer commissions to drivers, allowing drivers some say (or a lot of say) into what goes into the vending machines or micro markets.  

Telemetry, handhelds, and vending management systems certainly help. However, still covers vending crimes orcestrated by the route driver. And there are more ways to steal than the classic definition of embezzlement such as theft of merchandise and stopping somewhere unauthorized while on the clock.  

Not just route drivers 

I really don't mean to pick on drivers, the majority of whom are hard-working men and women dedicated to bringing refreshment to their customers. Really, any employee might be capable of theft, and statistics show theft happens in the financial services arena.  

It's difficult in a small organization to talk about theft and believe that these hard-working employees, whom you know well, might steal from you. Looking around with suspicion is even worse, destroying the camaraderie that develops in a small business where everyone has a stake in success. In reading about how to prevent theft, there are a number of ways, most pretty logical. 

The first is to do background checks. Yes. You probably already do this, or say you do. It is necessary. It is the first preventative measure mentioned in an article about Employee Fraud from the Small Business Administration.  Another is to set the expectation and tone. Right from day one, talk about theft.  

I have heard of companies who tell employees how to recognize theft and show them how to uncover it within the organization. The warning is made about other people, but gets the employee on board and illustrates how serious the organization is about theft. It gets the staff to help police it too. If employees know you are watching, they will be less likely to commit theft, at least in many cases because there are multiple motivations behind theft. Security magazine covers a number of them in this article.   

If a problem does occur, make sure you investigate instead of relying on your gut is the advice of a consultant to prosecutors in trial techniques and civil lawyers at a human resource convention. Look at emails, records and hard facts. Then bring the person in and ask open-ended questions to which you already know the answers. If the person is evasive, vague or tells you the opposite of what you know to be true from facts, that is suspicious. Avoiding eye contact and fidgeting aren't reliable cues, despite what crime shows may tell us. Honest people can feel nervous that you won't believe them and exhibit these behaviors. It's a clue, but asking open-ended question and listening to the answers is what will really help uncover fabrications. There are also loss prevention specialist who can help.   

It's a hard topic to cover and one that most people would rather sweep under the rug.  However, the facts show that employee theft is real, and hits business with fewer than 500 employees, such as vending operations, worse of all.