Holiday season brings eggnog, mistletoe and shoplifting

The upside of an increase in foot traffic and seasonal workers being added to the roster are that they signal higher sales for small companies.

The downside? They pave the way for theft. While shoplifting is standard at businesses of all sizes, data finds that a surprising number of these crimes are committed by employees.

According to the U.S. Retail Fraud Survey for 2014, which analyzes fraud and loss-prevention systems employed by 100 of the country's top retailers, shoplifting accounts for about 11 percent of losses in stores. But more surprising is that employee theft is the biggest area of store loss or "shrink," at 38 percent.

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Smaller companies are often at risk for this type of theft during the holidays, said Scott Humphrey, technical director for risk control at Travelers Insurance, as they have fewer resources to combat theft both internally and externally. But the good news is that addressing these issues internally can also serve as a counter to shopper theft, as well.

"The first thing to do is really be sure you hire the right person," Humphrey said. "Do a background check. Small businesses, because they are closer to the management of all aspects of their businesses, are less formalized with procedures and protocols."

But not all small employers are fearful their workers will have sticky fingers. AnnaMarie Fiume, co-owner of Amaryllis Handcrafted Jewelry in Baltimore, Maryland, says she and her co-owner, Allie Wolf, don't simply hire seasonal employees. They have been in business for nearly 30 years, and hiring quick seasonal workers doesn't allow for the breadth of product knowledge they want in sales personnel.

"We are known for having a lot of regulars come in. If I brought someone in for only four weeks out of the year, that wouldn't fly," Fiume said. "But I would be naïve if I told you shoplifting hadn't happened to us."

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Fiume's store has experienced theft by both insiders and outsiders, but she said that because she is a small business owner and has less turnover than a big box store, she's more trusting of her workers. They also are trained to only take out one item from a case at a time, and the store has security cameras.

"Cameras can only do so much; I do train them to always have their eyes out on the store," she said. "And sometimes customers have to wait while they take items out, and that is OK."

So what can small businesses do to protect themselves this season?

Train workers by pairing them up with trusted employees, Humphrey said, and be sure they know you mean business when it comes to theft.

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"Clearly communicate that you have a policy about shoplifting that doubles for shoppers and workers," he said. "Let them know you're not letting them walk out for stealing something and that you will punish to the full extent of the law."

Also monitor and take inventory of the items you have on sale, Humphrey said, and monitor what's coming in and going out in terms of cash and merchandise.

If you're selling a lot of a certain item, you have to monitor those profit margins daily: If we sold 10 items, what did we make on it?" he said.