You’re catching just 2% of internal theft. What about the rest?

If retailers think they've got a handle on internal theft, maybe it is time to think again, for despite all the different tools at their disposal, from Exception Based POS data analytics to whistleblowing hotlines, they're probably detecting just 2% of what’s really going on inside their business.

And yes, staff dishonesty and internal theft is and has always been awkward to talk about. No one wants to point the finger at their own people, especially when retention is fragile and recruitment is a daily grind. However, internal theft comes at a huge cost, and ignoring it can hurt culture more than it helps.  

From fraudulently voiding a sale, to taking merchandise, to manipulating returns, to “sweet hearting” for their friends, when honest staff see others breaking the rules and getting away with it, it will impact on their motivation and job satisfaction.

And while pre-employment screening has a clear role to play, the high levels of staff turnover, and the requirement to hire at speed, are hard to execute for retailers. But you can influence behaviour.

So we brought in Marketing MSc students from Loughborough Business School and asked them to do what marketers do best: change minds and influence behaviour.  

Their brief was to use proven behavioural science to speak to the would-be thief, the tempted, the borderline, the young new hires to those celebrating thirty years of long service. Not with blanket suspicion or clumsy threats. But with smart, brand-aligned messaging that taps into pride, loyalty, family and social pressure.

Their campaigns created posters with purpose, clearly communicating: “We see you. We trust you. Don’t break that trust.”

The evidence is gathering, in the report, one retailer trialled communications along these lines and saw their tobacco losses fall by 78%. Another cut prepared food loss by a third. And yet another saw their losses decrease by 15% with a campaign that drove awareness of their new central CCTV monitoring capabilities.

Therein lies the power of low-cost, well-designed internal messaging. So, if you’ve previously written off staff posters and internal comms as just background noise, our report suggests that it’s time to think again. Done properly, they don’t just inform, they can engage staff and shift culture. 

Because internal theft today isn’t about taking home a sandwich. It’s iPhones in the post. It’s refund fraud. It’s manipulation of fulfilment models like BOPIS and BORIS. And in some cases, it’s organised crime networks exploiting seasonal bulk hiring peaks.  

And while retailers will continue to invest to catch more than 2%, specially AI and CV, our report, click here, authored by Professor Emmeline Taylor, presents the case for sending a well considered and targeted message to the other 98% that could have the potential to reduce your annual shrink bill by 10%.

And as a next step, and along the lines of what we did with this project, maybe retailers can ask their marketing teams and agencies for some inspiration and help?