Big Problems In Little Shops If Employee Background Checks Are Not Used

In one of the places I work we employ student workers and we run a cash register but without employee background checks our students can’t run the register. Now as someone who has worked for nearly three decades in retail I find it hard to wrap my head around this. On a busy day we rarely take in over $200 in fines and payments. Yet I have seen teenagers in the stores I have worked in handling thousands of dollars in transactions in any given day! I did think about this as we are now starting to ask our college Human Resources Department to begin background checks on some of our student employees. If our college is this concerned over what I see as miniscule transactions compared to what a private business does, shouldn’t small and medium retail owners be as well? 

In 2017 retail inventory shrink cost U.S. retailers 48.9 billion dollars (2017 National Retail Federation Survey, pg. 6). Of this amount 30% is due to employee theft (pg.8).  This only accounts for merchandise shortage and does not include cash theft or financial transaction fraud perpetrated by retail employees. It is clear from these numbers that it can be costly if a business owner does not hire a company to conduct employee background checks in order to prevent employee theft.

A background check can encompass a number of different areas. Take for instance the checks Loss Prevention Systems Inc. conducts for clients. They can look into driver histories, criminal background checks and even education verification. Store owners should also remember that there are other factors they should be concerned with such as staff and customer safety. Employee background checks can also look into sex offender registries helping to ensure there is minimal risk of a predator being hired onto the team. How about a residence history? It may not seem important until you realize that there are people who move around frequently because they are always in debt. They may also be trying to hide from Law Enforcement officials. Seeing that an applicant is regularly pulling up stakes and moving should be a red flag that this could be a problem hire. Learning about an applicant’s history is a strong check against employee theft and creates a safe work environment.

It is easy to focus on merchandise theft since inventory is completed annually or in some case it is done more frequently. Shortage results show how much merchandise is unaccounted for and what is ‘missing’ through theft, paperwork errors, etc. Theft and fraud at the point of sale can be much more difficult to ascertain. Having an extensive background in Retail Loss Prevention I have worked cash theft cases that were not easy to identify and more difficult to close. Added to that were the cases of credit card, check and gift card fraud each with its own unique challenges to investigate and close. As a small retail owner there is a strong probability you do not have the time or resources at your disposal to identify and then properly investigate point of sale theft and fraud. Oh, and don’t forget a lot of that inventory shortage could be due to employee theft issues at the registers too. Employee background checks can significantly reduce the odds that you will hire the wrong people and have to worry about cashiers stealing from you OR your customers.

Theft cannot be taken lightly. If a college is concerned over who operates a cash register that may take in $200 a day, how much more concerned should a store owner be taking in a lot more in a day? Conduct employee background checks and focus more time on running a successful business and stress less over point of sale shenanigans.


Employee background checks are important and we can help with it. Call 1.866.914.2567 and let’s talk. 



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