Theft and Damage Control for Specialty Shops

Retailers of all sizes face losses from theft. Damage to the store and other property can also be disastrous for store owners. In addition, customers may suffer loss while they are shopping in your store. Small retail stores can be targeted by thieves as often as large stores. A car in the parking lot may be broken into, or a pickpocket may present a threat while in the store. All of these risks should be addressed by the business owner. Usually, the right insurance policy covers anything that happens inside the store, while a disclaimer in the parking lot absolves the business owner of responsibility for damages to vehicles.


Breaking and entering should be covered by your insurance policy. This insurance will cover damage to your building if it is broken into. It will also cover theft of inventory and theft or damage to fixtures.


In robbery, the theft and damage occur when you or employees are present. The people in the store are threatened with force. Robbery also is covered by your insurance.


Shoplifting may be committed by customers or employees. Insurance usually doesn’t cover this type of loss, even though employee theft is a national problem for business owners.

Most shoplifting can be deterred by attentive employees. Simply checking in with shoppers occasionally will help to remind them that you know they are still there. Don’t leave customers in a part of the store that is hard to observe – have employees straighten shelves or dust in those areas if customers are acting nervous.

When each person who enters the store is greeted by an employee, it reduces the temptation to steal. Keep small items near the center of the store or the register, if they would easily fit into a pocket or purse. Employees should circulate throughout the store, smiling and making eye contact with customers.

Employee Theft

While some employees will steal from their job regardless of personal involvement, most workers will refrain if they feel like they are part of the business. In some cases, employee theft is the result of anger and resentment toward management and/or unfair business practices. To counter this, stay aware of morale among your workers. Make sure their needs are being met and they feel like they matter to you and your store. Show appreciation for their efforts.

Providing a store discount also helps to deter employee theft. Most people who work in a store will have an interest in some of the inventory in stock. By helping them to buy it at a lower price, you can reduce the temptation to steal the items. Some retailers reserve returned items that have slight damage, and let the employees have the items.

You can also take steps to discourage employee theft. A lot of theft takes place in the warehouse or loading docks. Make sure that all boxes are flattened before they are set out to be disposed of. This reduces the incidents of bulk loss of valuable inventory. Also, limit employee access to storage and loading areas.

If an employee makes a purchase at your store, have a store policy that a manager must ring up the purchase. You may also need to do spot checks of backpacks or packages the workers take with them.

Periodically, take inventory. Your workers know how often inventory is taken, and which items don’t sell heavily. They may take several of those items, knowing the loss won’t show up on automated inventory software.

It may also be necessary to restrict the number of people who have access to your store after hours. Most security systems require each user to have a different password. Train your staff to keep their passwords private, and keep a record of their presence in the store.

Always do a background check on potential employees. They have access to the cash registers, and may be able to gain access to your bank account. In addition:

  • Regularly review your bank statement
  • Make sure there are no abuses of telephone privileges
  • Require receipts for all uses of company credit cards.
  • Watch for spikes in refunds, redemption of gift cards, or unusually low sales when certain employees are on the job.