"We've been franchising for 29 years and early in the day, within the first few months, there was a gentleman who worked in bakery who had three young children, one of which was special needs. He needed to get a prescription filled, but didn't have the cash. It was at that point that I decided I would much rather lend somebody the money who needs it than see them take it out of necessity."
This was a pivotal moment in Maureen Sauve's long history as a multi-unit franchise owner, the kind of career where dealing with employee theft, and theft in general, is par for the course.
Even as a child, Maureen liked to discuss work and management with her father, who was responsible for security at Procter & Gamble. She went on to study Accounting and Management Science, giving her an understanding of both the numbers-side of business as well as the people-side. Today there's over 200 employees working in Maureen's restaurants.
Her proposition to loss prevention is simple:
"It was my grandfather years ago who suggested that there's three reasons why people steal. Need, greed, and opportunity. And so it's a question of setting up a culture that addresses each one of these."
We interviewed Maureen to find out exactly why employees steal and how she has addressed each one of those challenges in here in her business.
For some people, theft is simply a means of getting by. It's not a testament to their dissatisfaction with management or with the workplace, which means it can even in the most positive work environments.
Maureen tells us she's been faced with this very situation on more than one occasion, whether it's a father needing a prescription for his child or a single mom whose hydro is going to be cut. "These are the realities of our staff. So it's really difficult for me to justify not helping them when they're handling thousands of dollars a day."
The first thing Maureen did to help address need was to institute a loan system through which employees could borrow money from future paychecks in times of need, with parameters to control how much could be lent.
"My staff know that my door is open and that if there's a need, I'd rather talk to you. The fact that I have set up this system means I won't feel guilt in firing someone who still decided to steal from me."
The second way she addresses need is by allowing employees to eat for free during their shifts and take home perishable product at the end of the day.
"We keep a tight control on inventory so rarely do eggs or sausages go in the garbage. But you're still going to have leftovers at the end of the shift, and I'd rather feed a human being than a dumpster."
By encouraging employees to approach her with their financial difficulties, Maureen creates a company culture in which theft is not the only solution for those in need.
For some people, stealing from their workplace is simply a matter of greediness. Maureen tells us that while there will never be a complete solution to greed, the best way to deter it is to let your employees know that you're looking.
"I used to say to the managers, take the surveillance video home to take a look at the afternoon shift yesterday or the night shift so that when you see them later today you can comment on something specific that happened in their shift."
By mentioning something very specific from the previous, it gave employees the impression that managers could be watching all of the video even if they only watched a few minutes of it.
Simply letting your employees know that you have a process in place for reviewing transactions and video can deter people from stealing. It's even more effective if your stores or restaurants are equipped with a loss prevention system that uses algorithms to audit transactions instead of relying on manual audits.
With need and greed being the driving motives to commit fraud, opportunity serves as the catalyst that determines whether an employee will act on these motives opportunity is where you, as a business owner or manager, can have the biggest influence.
"They weren't happy with me at first and then the sales numbers started rolling and I'm going to say that there was one store whose sales went up by 8% and it was shocking to me."
For example, Maureen's franchises sell hundreds of coffees a day. The opportunity to steal is ever present as it's inherently difficult to keep perpetual inventory on a liquid. This became a pressing issue when Maureen noticed she was running through significantly more coffee than revenue suggested. She crunched the numbers and found them looking alarmingly skewed.
Maureen came up with a different reconciliation analysis, ignoring the liquid coffee component and focusing instead on the cup usage as dictated by the sales inputted into the register. The numbers were still scary - no matter how she calculated it, she was missing thousands of cups.
For the next 2 months, Maureen and her managers allocated the cups to be used during an average shift and counted the remaining afterwards to reconcile against the sales. "It was a pain in the ass and they weren't happy with me at first and then the sales numbers started rolling and I'm going to say that there was one store whose sales went up by 8% and it was shocking to me."
Decreasing the opportunities to steal takes a watchful eye and some commitment. The benefit, however, is certainly worth the work - you never truly know what there is to gain, or rather, what you have been losing, until you make the effort.
The analysis that Maureen conducted on coffee cups was successful in letting her know how and where theft was happening. But these kinds of manual audits are time-consuming and not always a sustainable solution for every owner.
One of the best ways for franchise businesses to close the opportunity gap is through technology. Automated theft audits, together with transaction integration, video management and mobile access, are just a few pieces of a total security solution. When these components work together seamlessly they ensure that loss prevention is efficient and simple for restaurant owners and managers.
Being able to see the outliers in your business, such as an employee with above average number of voids, instead of relying on a hunch can make all the difference in how you target internal theft.