At one time, employee theft was fairly straightforward. Cash could easily be intercepted, whether it was being exchanged through a cash register or in a back office. As consumers exchanged cash for credit cards, however, theft became more complex, requiring employees to know how to commit fraud to steal money from their businesses.
On any level, electronic payment fraud is disastrous to businesses, with 62 percent of businesses reporting that they were targets of payment fraud in 2014. When fraud comes from an internal source, it can be especially damaging, since employees often have access to sensitive business systems. Here are a few ways you can prevent internal theft of your customer payments.
Screen Job Applicants
The best protection against employee issues happens during the hiring process. Businesses should invest in thorough pre-employment checks that include calling references, conducting drug and criminal background screenings, and learning to read between the lines on an employee’s resume. If you aren’t already, you should look candidates up online and pay close attention to their social media sites. Research has found that this type of pre-employment screening reduces employee theft by as much as 48 percent. When combined with behavioral interview questions that identify the right fit for your workplace culture, candidate screening can also reduce your risks by filling your business with employees who remain on staff long term.
Use Accounting Controls
Once most of your payments are through mobile payments and credit cards, much of the transfer process happens behind the scenes. You can no longer get the full picture by watching your employees accept money, provide change, and count down their drawers at the end of the day. This means you need to diligently watch your transactions on a daily basis to quickly catch any discrepancies. You should also bring in an independent auditor at least once a year to bring expertise to the review process. Through putting internal accounting controls in place, you can reduce the dangers faced by every organization that accepts payments.
Investigate Customer Complaints
Often the first sign of trouble comes through customers calling about suspicious activity on their accounts. If even one customer claims to have been overcharged, not charged at all, or a victim of credit card theft, it’s important to take those calls seriously, even if you don’t believe one of your employees could betray you. Make it policy to investigate every claim of fraudulent activity by looking back through transactions on the date in question and more closely watching the employees who might have been responsible. If you have credit card swipers on site, check the swipers for signs of tampering.
Your business is at its most vulnerable in the hours following an employee’s termination. Disgruntled workers can seek revenge by trying to harm your business in some way. Once you’ve made the decision to let someone go, make preparations to have all accounts suspended as soon as the employee has been notified. Have someone escort the terminated employee from the building and make sure all equipment is confiscated on the spot, especially if customer payment data could reside on it. Even if the termination seems amicable, undetected resentment can lead to problems. If you feel collecting mobile devices will be difficult when you terminate an employee who might not have them on site, set up processes to lock and remotely wipe mobile devices from your administrative panel.
You can deter crime by showing that you take it seriously. Let your employees know that you have an audit process in place and that any incidents of theft will result in immediate termination, as well as prosecution when applicable. If you should discover one of your employees committing any type of theft, follow through with the stated policies. When employees see that there are repercussions for their actions, they’re more likely to be on their best behavior. For brick-and-mortar businesses, security cameras in areas where payments are managed can be an additional deterrent, especially if employees are aware the footage is regularly reviewed.
Employee theft will always be a problem in businesses that deal with money. However, as important as it is to hire and nurture great employees, it’s also important to protect customer data. By putting safety measures in place, you’ll be able to recruit and retain reliable employees while also keeping payment data safe.