According to the National Federation of Independent Business, some 30% of employees may well be stealing from you today. They go on to say this number increases if an employee is given the motive and opportunity. Using some data provided by the 2017 study by Hiscox, the dollars are not small. One employee could be stealing thousands right off your bottom line. In the next few minutes we’ll take a look at the issue, who tends to be responsible and strategies to deal with the problem.

As an aside, I get it. I was a small business owner too. No one wants to think that his own people are stealing from them. Moreover, they are very often people we consider to be friends. This article isn’t written to make you suspicious of all your crew. But, if you are one who believes it wouldn’t happen to you, time to come to grips with the fact that just this attitude makes you the most vulnerable type of owner.

Avenues of Theft

In an auto-repair shop there are many opportunities for an employee to steal from you. Here is a quick summary of chances for you to lose dollars from your pocket:

• Theft of tools and equipment. Be especially wary when someone says that they forgot to remove something from the last customer car. It may very well be under their car seat. Otherwise, it’s time to begin a stricter T&E inventory policy in the shop ASAP!

• Allowing employees to work outside of regular hours is an invitation to loss. Parts, tools, computer paper, you name it. And, if they should happen to get hurt and come in the next day with their new “Worker Comp” claim, how will you dispute it or prove it happened after hours on their own vehicle?

• Worse yet, allowing the friends of employees in the shop after hours to work on their vehicle or help the employee with theirs. These folks have no connection to you and, as a result, may be that much more likely to steal. And, what about injuries. Only this time it will go to your shop liability policy.

• Ordering parts and then not installing them. They never show up on the work order and never seem to make it back to the return bin.

• Taking supplies such as chemicals.

• If you have a C-store attached, one can only wonder what could walk out without being paid for or recorded.

• Computer data: In this age there are employees who decide they want to go it alone and will steal your customer data in order to hopefully steal the customer.

• There are others, many!

Behavioral Tip-offs

According to a number of sources, there are clues to which employees may be stealing or seriously thinking about it. Most are behavioral:

• They are often spending beyond their apparent means. Unless someone hit the lottery, watch for them buying things that just don’t fit their income.

• Those who steal tend to be risk takers and will show that in their outside activities. Another description might be that they are adrenalin junkies.

• Substance abuse is a tough thing to catch or see sometimes, but is a leading cause of employee theft.

• You have a rash of comebacks for one employee that seem like the repair wasn’t made or a part was billed through but never installed.

• Your shop complainer, especially if they act like you owe them something.

• Someone you often catch in a lie.

• Any sudden personality or behavioral change.

Please understand, my motive is not to create a bunch of amateur sleuths or psychologists out of shop owners. But the actions just described are generally easy to pinpoint by any shop owner.

The first step in combatting this problem exists in your current systems. Without a solid inventory system, matching parts billed to parts ordered and your various shop items you’ll never be alerted to losses. In addition, it’s time to enlist your part supplier(s) in your anti-theft campaign. Ask them to let you know if any employees are suddenly ordering lots of parts on their own, returning new parts or cores for their own credit or asking the outlet to place special orders in your name.

Next is the simplest part. Just be observant. Watch attitudes, activities, sudden curiosity in procedures, especially part’s ordering, returns, altering work orders in the system, cash handling, etc.

Substance Abuse

In addition, watch for signs of substance abuse. According to Psychology Today there are five signs of substance abuse to watch for:

• Personality changes: Individuals affected by substance abuse show distinct changes in personality, with no identifiable cause. They are likely to become more moody and irritable and they have difficulty paying attention. They may lose their motivation and energy and display an “I don’t care” attitude.

• Physical signs: Physical symptoms of addiction are also evident. The most common symptoms among substance abusers to watch for include: cold, sweaty palms and shaking hands; runny nose and frequent rubbing of the nose; red, watery eyes; and a loss of interest in personal care and hygiene.

• Frequent restroom use, or disappearing outdoors or other concealed area: People who use substances at work have a frequent need to carve out some private space – they may need to ingest, snort or inject drugs, sleep off the effects, or pass out. They may also experience nausea, vomiting or other drug/alcohol-related side effects, which could send them to the bathroom more frequently.

• Unexplained absences/tardiness: Individuals using substances are frequently unable to fulfill their responsibilities. They are more inclined to call in sick, or show up late for work. I always warn employers to keep an eye out for series of lost jobs on job resumes. These have the potential to indicate substance abuse disorder as those suffering tend to experience more job turnover as a result of absenteeism or overuse of sick time. According to the Substance Abuse and Mental Health Services Administration (SAMHSA), employees with substance abuse issues were more likely to report frequent job changes in the past year.

• Always in need of money: The cost of obtaining drugs or alcohol for heavy, daily use can be prohibitive. Consequently, the need for money is chronic and employees using substances may frequently borrow money from colleagues. They may even build relationships with co-workers just so they can borrow money.
Preparation

Once your record keeping suggests, or your observation seems to suggest, that someone is stealing, there is a very simple process to follow. This won’t be easy. Just gathering together information is simple, but as one shop owner shared, having to do it at all means you likely hired the wrong person, that someone has betrayed your trust and is really a malignancy in your operations. Depending on who it is in your shop, it is at the very least disappointing and discouraging, but is often heartbreaking.

 With this thought in mind, here’s the summarized process that the professionals suggest:

• Get all of your evidence together. If you need tweaks in your systems, a new or expanded camera system, whatever, it’s time to check that out. In any event, it is critical to keep feelings, disappointment, opinion, hearsay and more out of your process. As Joe Friday used to say in Dragnet, “Just the facts, ma’am.” Eventually you will have to present this to the employee and possibly others, and facts always win.

• If appropriate, get with your business tax professional and have your records carefully audited looking for unusual activity that may be part of the theft.

• Get in touch with your legal professional and get their advice on how to handle the matter. In terms of fees, as a rule, the earlier your legal team is involved, the less expensive it will be down the road if you have an “opps” and they end up defending you.

• Make a detailed record of steps you’ve taken in this process. Things like names of those you spoke with, what you gathered, dates, telephone numbers, times, etc.

• Be alert to a changing pattern as you do your investigation. A number of people state that employees who are stealing will tend to become suddenly cooperative, friendly and stop stealing if they think you are on to them. Note these changes. Sooner or later, they will steal again most likely.

• Remember, thieves are also generally accomplished liars.

• Prepare everything needed for a showdown. Have your facts, dates, and the like in a simple summarized and ordered fashion. Then, interview the employee if that’s recommended by your legal pro. In my experience (thankfully limited), it is an excellent idea to keep have your legal pro at this meeting. They are trained in keeping conversations on point, will alert you if you cross any lines and are typically good at reading human behavior. They’ll be able to observe the employee more fully as they are confronted with the information you’re presenting to better gauge their reactions.

• With your records together, and there’s no doubt as to what’s happening, it’s time to fire the employee. Before you think you will hand out second chances, or give this person a break because they’re your nephew, or whatever, they will steal again. Remember, for all of the assurances and pleading, thieves are great liars. Chances are great this isn’t the first time they have had to talk their way out of something. You can bet everyone in the shop knows what has been going on and is watching you to see what your threshold is for this kind of thing. You may very well avoid creating another thief!

While 64% of small businesses have experienced employee theft, only 16% of those reported the incident to police, a FoxBusiness study found.

Taking Action

Once you have your materials together and have dismissed the employee, take the following steps immediately and without fail:

• Escort them, along with your legal pro, to the door. If they have their own tools, supervise as they gather them together and load them in their vehicle. If they have some kind of reason they can’t move the stuff or their vehicle is not usable, rent them a pick up and have shop employees help with loading. Whatever it takes, but they go right away and you can’t give them time to steal more on the way out.

• Determine whether the police should be involved. For my money, if this showdown involves substance abuse or you even think it may become confrontational, have the police on hand. If appropriate and recommended by police and/or your legal pro, press charges. You will save more poor shop owners a similar situation when they hire the person.

• Make a record of anything the employee says or does during this process and keep it with their file.

• If there’s any suggestion that the employee knows or can get computer data have the system reviewed by your IT folks right away. Ditto your bank accounts.

• Change all of your passwords, door codes and anything else that needs to be changed just as soon as they are out of the building.

• Don’t go after their last check for payback unless your attorney says you should! In many states it’s not legal, or at least limited.

Lastly, this is a good time to talk to the remaining troops. Keep it simple and do not bad mouth the person now gone. Simply point out there had been some “irregularities” and that together, you and the employee thought it best they leave. They know. Don’t answer questions, just buy a sub lunch for everyone and start rebuilding your team.