When an employee gives unauthorized discounts or free items to a customer, that customer is usually someone they know – a friend, a family member, a fellow employee, or even a beloved customer. This common form of theft is called sweethearting, and it accounts for about $60 billion in retail shrinkage annually.
To eliminate sweethearting, retailers need awareness of how it occurs, technology that can detect it, and policies that set boundaries for employees.
How Sweethearting Happens
Sweethearting isn’t as easy to spot as cash-drawer theft. On video, you might not be able to see that an employee scanned only some of the items a customer purchased. Frequent inventory checks, however, might reveal a suspicious discrepancy between inventory levels and product sales.
Employees might also use price overrides, voids, or no-sale transactions to give friends unauthorized discounts. These are the types of POS exceptions that merit further inspection.
Having surveillance cameras on the premises should help deter sweethearting – but only if managers take the time to review surveillance footage daily. If employees think no one is reviewing security video, cameras might not be effective in preventing theft.
Managers should review video footage and provide feedback that lets employees know they are being watched. For example, a manager might mention that on video, it appeared an employee was fulfilling orders efficiently, or that an employee wasn’t wearing their required name tag. This type of regular communication helps employees understand the role video cameras play in managing operations.
Reducing Sweethearting Proactively
Employers can minimize the risk of sweethearting by establishing clear policies and defining the consequences (such as criminal prosecution) for giving away merchandise or providing unauthorized discounts. Employers should also establish a whistleblower policy that provides anonymity for employees who report their peers for theft.
Developing Good Habits
POS exception reports and video footage are helpful, but only if managers set aside time every day to review the previous day’s transactions. Business owners can help store managers prevent loss by giving them tools and resources that simplify the review process.
DIGIOP CARBON syncs video footage with transactions and creates easy-to-read daily reports – in as little as 20 minutes, managers can review every exception from the previous day. With DIGIOP’s software, business owners can detect theft, monitor inventory, and – in worst-case scenarios – present detailed evidence to support the prosecution of an employee.