We know that workplace theft occurs most often where the offender has both the opportunity and access and the ability to justify their actions.  In a retail environment employees have the opportunity and access as a matter of course just due to the nature of their roles. Where an employee has the ability to justify their actions as ‘not hurting anyone’ because the business is insured or profitable, the chances of theft and fraud occurring increase significantly.  Despite this risk, managing theft and fraud within a retail setting can be difficult for many businesses to navigate appropriately, because this is one area where semantics matter.  This weeks HR Highlight will explore the strategies for reducing the risk of theft and fraud, and the steps when addressing theft and fraud.

It is an unpleasant reality of managing a retail business that there exists an opportunity for fraud and theft.  Strong Stock and Cash Control policies, that are clearly communicated and enforced, as well as appropriate review of sales and stock systems and surveillance are key elements in mitigating the risk of theft and fraud, and provide the framework for managing it appropriately when it occurs.

Make it clear to keep it under control

Businesses who have strong Stock and Cash Control policies are better situated to address and manage issues such as: employee performance and compliance issues, and theft and fraud inside the business. This is in addition to the deterrent qualities that a strong policy communicates.

To remain in control of these vital elements of success a business needs to have a strong Stock and Cash Control policy that:

  • is written to reflect the realities of the business;
  • is communicated to all staff;
  • outlines expected behaviour and repercussions for failure to demonstrate expected behaviour; and
  • is enforced in a consistent and predictable fashion.


Stock in a petroleum and convenience business can be everything from lollies to petrol.  A businesses stock is its product and it is vital that it be handled, recorded and disposed of according to the businesses requirements.


An additional benefit of strong Cash (and Credit) Control Policies can also be the reduction in incidental cash exposure. Tighter cash control procedures can also lead to the business being a harder target for both opportunistic and organised criminal activity.

Managing Incidents

When the business discovers, or has a concern, that theft or fraud has occurred it is important that it is addressed firstly as a business issue.  That is to say that the business has the right to manage the performance of the staff against the stated expectations of the business.  Where the business has communicated to the staff the expectations regarding the handling of stock and cash, and the staff breach those expectations, by removing cash from the business, removing stock from the business, providing free food to themselves or family etc, the business issue is one of a serious breach of critical business policies.

Like any performance management issue, when dealing with this type of incident the business should call a performance management meeting with notice, and outline to the employee the breaches that it believes have been made, they should seek the employees comment and should consider it prior to making any decision on how to proceed.  Depending on the employees comments and the findings of the business outcomes from the meeting could be a warning, retraining, performance management, termination or referral to the police.  What is the appropriate outcome will depend on the particulars of the case.  Either way the outcome should be documented formally, that is to say written down and provided to the employee.

What is important to note is that theft and fraud are crimes, and are a matter for the police to investigate and to charge a person with, if that is their determination.  A business cannot manage or terminate an employee for theft or fraud.  What a business can do is performance manage an employee for breaching business policies, procedures and task instructions.  While on the face of it this may seem like a semantic distinction only, it is an important difference.  It highlights that the business has a responsibility to ensure that it has clearly communicated the business expectations, through documented policies, procedures, training and task instructions.

Ultimately the overwhelming majority of employees are faithful and unlikely to steal from a business, however to manage this risk businesses should clearly communicate expectations and where there is an issue, should follow the performance management procedure.  If it is determined that the breach has been strong enough that termination is the outcome, then the termination should be on the grounds of failure to follow stock and cash handling procedures amounting to serious misconduct.

It is important to note that while the business can only manage the employment of the employee based on the business policies, procedures and instructions, where appropriate the business can, and should, also refer any cases of theft and fraud to the police to pursue.

Here to Help

Stock and Cash Control Policies are part of the “must have” policies that every business should have, communicate to staff and enforce. ACAPMA members are reminded that ACAPMAs Employment Department has a series of resources from Quick Reference Guides to template letters, and investigation and reporting checklists for Stock and Cash Control that can assist with ensuring your business is protected, and that management can respond appropriately to acts of misconduct around stock and cash/credit.

ACAPMA members can access these resources and can call on the advice and support of the ACAPMA Employment Department Workplace Relations Professionals on 1300 160 270 or via employment@acapma.com.au.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by  calling 1300 160 270 and speaking to one of ACAPMA Workplace Relations Professionals its free for members.