If your nonprofit operates a second-hand store, gift shop or other retail venture, you should be on the lookout for theft as much as any for-profit business.
Chances are that your employees or volunteers would never steal from you. But before it’s too late, nip pilfering in the bud.
Here are six steps to follow:
- Watch for inventory shrinkage. Inventory shrinkage could mean outright merchandise theft, fraudulent returns or voided sales. Solve the problem by requiring approval of returns and voids over an established low limit, and by watching for patterns, like increased voids or returns from one employee.
- Compare gross sales to net sales. The difference between the two is generally returns. Legitimate returns should be documented with customer receipts or return forms. If not, find out why.
- Measure cash returns from one period to the next. Watch for unusual increases. If totals are rising, determine if the increase is due primarily to one employee. Watch for round figures – for example, a cash return of $300 is unlikely and should raise a red flag.
- Create a written ethics policy. This is a nonthreatening way to let staff know that you are aware of the possibilities of fraud.
- Provide anti-fraud training. Training will help staff spot unusual behavior.
- Set up an anonymous method for tips. A system should be in place for employees and volunteers to anonymously report fraud when they suspect it.