November 1, 2023

Retail Employee Theft Prevention with Security Cameras & POS Data

Retail employee theft is an ongoing reality that challenges businesses of all sizes, costing a staggering $100 billion annually (NRF). Internal theft by employees contributes significantly to this massive number. To put it in perspective, internal theft makes up almost one-third of the total inventory shrinkage, making it a rising worry for teams working on loss prevention (LP). Let’s look into the world of retail employee theft and explore how your current security cameras, combined with your point of sale (POS) data, can be a useful tool for addressing this issue efficiently and responsibly.

According to a recent National Retail Crime survey, many retailers don’t have the right tools to deal with the increasing problem of retail employee theft and loss:

national retail federation statistic

The Rising Cost of Internal Theft and Fraud in Retail Stores

Retail shrinkage is a major concern for businesses, and one of the costliest and most widespread problems is employee theft. Consider these revealing facts that highlight the seriousness of this problem from the same NRF survey:

employee theft statistics

The bottom line: Retail employee theft is a costly issue that requires a smarter solution. This is where modern security cameras equipped with advanced technology step in.

Prioritizing Loss Prevention Efforts in Your Retail Store

When it comes to fighting retail employee theft, fraud, and decreasing losses, retailers should direct their focus to three key areas:

1. External

This involves addressing issues like shoplifting, organized retail crime, and credit card or gift card fraud.

2. Internal

This includes issues such as stolen merchandise or cash, as well as any deceitful actions by store associates.

3. Operational

The focus here should be on rectifying cashier mistakes, resolving shipping errors, and mitigating merchandise damage.


Using Security Cameras to Stop Retail Employee Theft

Video surveillance technology has come a long way in recent years, making it easier for retailers to fight internal theft. Security cameras paired with POS data have a vast range of features that can help you tackle employee theft:

1. Powerful Video Analytics

Modern security cameras use AI-powered video analytics, which automatically handle and examine huge amounts of data, making the review and investigation of recorded footage much easier. These cameras can recognize and index different types of activities, simplifying the process of reviewing and investigating recorded footage. With this technology, you can precisely determine when retail employee theft took place and quickly access the relevant footage, which saves time and effort.

2. Intelligent Search Filters

When you connect your security cameras to a managed video solution, you get access to features and data that allow you to see the full picture of what’s happening in your store. 

These filters help retailers swiftly pinpoint specific activities, making evidence more concrete and investigations more efficient. Whether you need to identify a particular employee or investigate a transaction further, these search filters are essential for loss prevention.

3. Remote Access

Having the ability to access video footage remotely is a game-changer for loss prevention. Thanks to cloud-based systems, you can view footage and investigate incidents from anywhere and at any time. This eliminates the need to be physically present at the store, making it easier to respond promptly to potential theft and other security issues.

4. Crystal Clear Video Quality

Modern security cameras offer much higher resolution compared to older models. This superior image quality provides a more detailed view of the scene, enabling you to better understand the context of incidents and identify potential issues more effectively.


Save Time and Improve ROI by Investigating Quickly

When a case of retail shrinkage occurs, the challenge is figuring out what exactly happened. Was it an employee stealing, shoplifting, or maybe a lack of training? Sorting through the massive amount of video footage from security cameras can make the investigation process time-consuming and labor-intensive. Fortunately, security cameras, when coupled with video management systems, provide a solution to these challenges. Here’s how retailers can benefit:

  • Save time on reviewing and investigating footage
  • Require less labor to investigate potential theft
  • Resolve incidents quickly, increasing the chances of recovering assets and minimizing losses


Investigate Theft with Video Analytics

The introduction of AI-enhanced video analytics has revolutionized the process of investigating potential incidents of retail theft. No more tedious hours of scrolling through endless footage. Let’s look at some of the essential AI-enhanced video analytics features that speed up retail investigations:

1. Human Movement Detection

Cameras can automatically organize various types of activities, like human movement, making it simple to figure out when specific actions occurred and jump straight to the relevant footage.

2. License Plate Recognition

Filter for specific vehicles and monitor parking lots to track when an employee arrives and leaves the store premises.

3. Motion Search

Automatically search for activity in specific areas, such as the cash register, safe, or stock room, ensuring that you focus your efforts where they matter most.


Prevent Future Retail Employee Theft

Security cameras play a pivotal role in helping retailers quickly identify where their losses are coming from. Employee theft is often an ongoing problem because employees have access to the inventory, storage areas, and payment details. Identifying the people responsible is vital for saving money and stopping more losses. Here’s how this benefit works:

  • Find where missing money or product is going, increasing the chances of reducing future losses
  • Put a stop to repeated fraud and shrinkage by addressing the core issue


case study label

Catching Employee Theft to Save Thousands of Dollars

Let’s use a real-life example to show how using a managed video solution with security cameras can help reduce retail employee theft in a clothing store. In this case, the store manager noticed some discrepancies when counting the cash register at the end of the day. The manager shared this information with the loss prevention manager, who then used the register reports the store’s managed video software to investigate where these findings were coming from. After a thorough review, the loss prevention manager discovered that a specific employee had been taking cash returns for themselves, amounting to $3,000 over the course of a month. Without the advanced surveillance system, this theft scheme would have remained undetected, resulting in even more thousands of dollars in losses.


Using External Audit Programs to Enhance Your Security

While security cameras equipped with transactional data offer powerful protection against employee theft, they are not the only tool available. For a more comprehensive approach to loss prevention and operational excellence in the retail industry, external audit programs become a valuable asset. These programs act like an extra pair of eyes, checking your security camera footage and spotting potential issues.

In the retail industry, loss prevention audits are incredibly valuable because they help uncover weaknesses in security and how things work that dishonest employees might use. By combining footage from your existing security cameras and POS data, auditors can detect transaction patterns such as:

  • Under-ringing or undercharging
  • Giving away free merchandise
  • Refund abuse
  • Discount abuse

Further, by using expert auditors and your security cameras paired with transactional data, operations audits watch for:

  • Cleanliness and overall safety 
  • Employee conduct
  • Opening and closing procedures
  • Dress code compliance

This approach ensures that your retail business looks professional, focuses on safety, and offers excellent service. By combining external audits with security cameras, you create a powerful combination that helps protect your assets, make your operations run smoothly, and ultimately increase your return on investment (ROI).


Protect Your Business from Liability

Accusing an employee of theft without solid proof can lead to serious problems for both the employee and your business. It can strain your relationship with the accused, create a negative environment at work, and even result in legal trouble for your company. It’s essential to have strong evidence before taking any action. Security cameras make this process easier by enabling retailers to gather evidence with certainty and store the footage in the cloud, accessible whenever necessary. Here’s how security camera cloud-based storage provides peace of mind and legal protection:

  • Preserve video footage in the cloud for extended periods, ranging from 7 months to 7 years
  • Shield your retail store from false accusations and reputational harm
  • Speed up the resolution process
  • Securely share timestamped video evidence with law enforcement or other relevant parties
  • Save both time and money on potential lawsuit expenses


Share Video Evidence of Theft

Once you’ve gathered video evidence of retail employee theft, you might have to share it with law enforcement or other external parties. Modern video management system platforms provide user-friendly options for remote sharing. Unlike older NVR systems, you don’t have to physically go to a store to get the footage. Here’s how intelligent surveillance systems make this process quick and secure:

  • Share video evidence digitally with third parties, such as law enforcement or legal teams via email
  • Automatically add timestamps to the footage for a clear understanding of when events occurred
  • Safeguard shared video clips with passwords to manage who can access them and for how long


case study label

Exposing Employee Credit Card Fraud

Consider another real-life case study that highlights the use of security cameras paired with transaction data in exposing employee fraud. A cellular retail store’s managed video solution reported unusual credit card activity and provided video footage of the specific transactions. The store manager examined the report and witnessed an employee engaged in credit card fraud. The employee was caught taking a photo of a customer’s credit card just before finalizing their transaction. Later, after the customer had left, the employee would issue a cash refund for the transaction and keep the money for themselves. The manager took this evidence to the police for further investigation. As a result of the investigation’s findings, the manager made the difficult decision to terminate the employee, ensuring the integrity of the store’s operations and safeguarding its customers.


Preventing retail employee theft is a pressing issue, with the potential to save businesses a significant amount of money. When you combine a managed video solution with your current security cameras, you have an effective way to identify and handle employee theft. This can make a big difference in reducing financial losses and making your operations run more smoothly. Envysion’s Managed Video Solutions for the retail industry reflect these ideas, providing businesses with a full approach to address the challenges of employee theft and operational efficiency. 

Unlock the power of Envysion’s Managed Video Solutions and safeguard your retail business from employee theft while enhancing operational efficiency – talk with us today.

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