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Creating a Proactive Sweethearting Policy

sweeethearting policies, DIGIOP, DIGIOP CARBON,  digiop elements, loss prevention, overserve, price overrides, Return Fraud scan avoidance, sweethearting, void fraud

Sweethearting is a common retail term, referring to situations when an employee gives away items to a customer or discounts items for a customer.  Usually the person receiving the free goods is a friend or family member—their sweetheart.

Creating a proactive sweethearting policy helps to combat the common form of retail theft. Sweethearting often goes unnoticed unless your company has the technology and resources to prevent it. But then the loss requires reactive policies, rather than a proactive approach.

In one of the only studies to examine sweethearting (Journal of Marketing, 2012), it’s estimated that sweethearting accounts for up to 40 percent of revenue losses from theft.

Employees can give away free merchandise in a variety of ways which makes catching them a difficult task for retail owners, especially if they do not have the right technology.

Strategies for creating a sweethearting policy include:

Scan Avoidance

A common tactic used by employees at the register is to simply avoid scanning certain items altogether.  This is generally a riskier approach for an employee to use. But this is something that can be detected through the use of video cameras at the register as well as by conducting frequent inventory checks.

Price Overrides

Pricing overrides allows the employee to change the original price of goods.  The employee can then discount the item or even price it at zero.

Refund Fraud

With return fraud, employees will have friends or family members come in with items to return, but end up not giving the item back and accepting cash.  This causes major problems for retail stores because they are taking a loss on cash as well as merchandise.

Void Fraud

Sweethearting is also committed through void fraud.  Void fraud occurs when an employee scans an item, charges the customer, but then voids the receipt so that the exchange doesn’t show up in the system.

Overserve

A common way to discount food, services, or products to a sweetheart is to overserve. This could include comping appetizers or desserts, over-pouring alcohol, forgetting to ring up additional services, etc.

Reducing Sweethearting Proactively

Although sweethearting is a problem for retail stores nationwide, there are a number of different ways that employers can drastically reduce the amount of employee theft before it happens. A proactive approach to sweethearting is more effective than being reactive.

Four ways that employers can effectively reduce theft through sweethearting include:

Make Employees Aware of the Consequences

Often times, sweethearting occurs when a friend of an employee walks in and receives free merchandise due to the employee simply not ringing it up.  Most employees will perceive this to be a minor crime and think nothing of it.  Yet internal theft, including sweetheating policies, costs businesses billions.

Make your employees aware that they can and will be prosecuted for internal theft. Employees need to be aware of the overall corporate loss due to their actions.

Inventory Needs to be Accurate

Spending time and money on consistently keeping track of inventory will keep your business aware of what is coming in and what is going out.  This makes it much easier to identify theft.

Ensure Security Cameras are Properly Positioned

Placing cameras at or near the cash registers will serve as a major deterrent for theft. Depending on your business, you might need video surveillance cameras over the bar, in the takeout areas, or in customer service as well.

Video surveillance cameras can be paired with POS data through DIGIOP CARBON, allowing you to look at flagged transactions, such as voids, returns, discounts, or other sweethearting flags.

A Proactive Sweethearting Policy

Creating a proactive policy on sweethearting is crucial to eliminating the loss in your business.

Sweethearting is a problem for nearly every business. Being aware of how it occurs as well as having a system in place to prevent sweethearting from occurring is critical to your businesses success.  If you are only reactive to internal theft and loss, it will be too late.


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