In the last two months of the year, sales boom and shoppers flood retail spaces. The holiday shopping season is critical for many businesses. With 20% of annual retail sales occurring during the holidays, a number of factors lead to a disproportionate 25-30% of annual loss occurring during the holidays.
The increased store traffic and sales create distinct vulnerabilities for businesses trying to match seasonal demand. The most notable risk factor for employee theft during the holiday season is reduced oversight due to greater customer volume. When staff and supervisors are spread thin, businesses tend to neglect their usual oversight measures. Under these conditions, employee theft practices are more likely to go undetected—among these are “sweetheart deals,” where employees give under-the-table deals to friends and family.
Attempts to handle the increased customer volume introduces another risk factor: surge hiring of temporary employees. These employees are subject to a less intensive screening process and are typically less loyal than year-round employees. Paired with reduced supervision, seasonal employees can be a major factor in the uptick in employee theft.
Increased gift card sales present another risk factor of the holiday sales season as gift card fraud is an especially prominent form of theft among retail employees. Fraudulent practices, such as employees giving customers an empty gift card while pocketing the loaded one, become increasingly common during chaotic holiday shopping.
Keeping Employees Off the Naughty List
The holidays can bring increased stress in the workplace and financial strain at home. These emotional factors, along with the aforementioned seasonal vulnerabilities, can drive even trusted employees toward theft. Understanding these stressors can be a critical part of instituting effective theft prevention measures.
Hiring and onboarding seasonal employees should also begin as soon as possible. This gives businesses time to perform a thorough screening process and avoid making hasty staffing choices out of desperation. Getting an early start to seasonal hiring gives businesses time to build loyalty with new hires before opportunities for theft present themselves.
Despite the increased risk of theft during the holiday season, planning ahead, discussing theft with employees, and diligently following established oversight and internal control processes can help businesses limit loss and have happy holidays.