It Would Never Happen to Me.
Written By Annette Hughes | CPA, BEC COO & Director of CFO & Accounting Services
“My employees are loyal. I’ve known them for years. We are friends. I take good care of them. They would NEVER steal from me.”
Unfortunately, a significant number of employers who’ve had employees steal from them believed that wholeheartedly. This results in more than lost money; relationships, hearts are broken, and trust is lost in others. Unfortunately, I have personally known several instances of employee theft, theft from myself, and heard countless stories from others. It is real.
How and why does it happen? It usually starts out much more innocently than you may expect. Most times, it isn’t an intentional thought that “I’m going to go to work today and steal money from my employer”. Three elements have been identified that cause someone to steal: opportunity, pressure, and rationalization.
It goes something like this:
Sarah Jean’s car needs new tires. Her credit card is maxed out because her ex-husband went on a spending spree and bought a new gaming computer to waste more time playing games instead of working. She’s embarrassed to admit that she is having financial issues. Sarah Jean has a company credit card to purchase supplies and pay bills for the business. She thinks, “I’ll just charge the tires to on the company’s card, I’ll make a payment after payday, and nobody will notice”. Payday is coming and she needs that money to pay a doctor’s bill. Nobody seems to have noticed that charge on the card. So, Sarah Jean decides to put off repaying what she “borrowed” until she can afford it.
It all starts there. Often, it snowballs once the employee realizes nobody is paying attention and suddenly, they have “borrowed” tens of thousands of dollars and can never get themselves out.
The question is: as an employer, what can you do? The answer to preventing this type of theft is very simple – be aware of the transactions on your credit cards and in your bank accounts. Make sure that your employees know you are paying attention. Best yet, require receipts for all credit card charges and LOOK at them. If your employees know you are paying attention, they are much less likely to try and steal from you. This simple prevention will take you maybe 10-20 minutes a month, depending on the number of credit cards you have. If you aren’t certain about what a charge is for, ask and verify.