Store Security and Internal Controls

Articles and resources:

See the wiki page on "Cash Management and Cash Handling" for details on those aspects of store security:  

The following review, while it is part of a series on accounting best practices, covers many store security issues in the areas of front end practices, cash disbursements, payroll accuracy, and controlling shrink both internal and external:  "Accounting Best Practices: Internal controls," by Bruce Mayer, Peg Nolan, and Steve Wolfe, is linked below under Related Content. (That article has also been collected in one Primer along with the rest of a series on accounting best practices, covering cash management, the income statement and balance sheet.)

A 2008 article on "Payment Card Security Compliance," by Chris Von Rabenau of the NCGA, discusses electronic data security and Payment Card Industry security standards.  A 2009 article by Tak Tang of Wedge Co-op, "More on Payment Card Security Compliance," covers some of the technical side of secure store records and Payment Card Industry requirements. Both these articles are linked below under Related Content.

“Preparing for Disaster,” a 2007 article by Carolee Colter, covers the basics and points to additional disaster planning resources and is linked below under Related Content.

An interesting comment on installing backup generators at the store was contributed by Doug Walter of Davis Food Co-op (May 16, 2012):

“We had a substantial loss of product in a wind storm in   January of 2008. So we checked with independent food stores in our half of the state, and we decided NOT to do this.  

“A market we admire quite a bit out on the Pacific Coast does have such a setup, due to much-more-frequent power outages than we encounter. It takes a very large generator to keep the freezer and refrigerators going, even without any shopping (which opens & closes doors, and thus makes the power requirements higher). We would have needed to rewire our entire store, so that the circuits could take a switch-over to a generator without blowing up all the refrigerator motors. (I was recently in a store where they had switched to generators for a planned power outage ... and now had to replace every #@$° motor, because their electrician had not adequately planned.) Also, they have to make provision to safely store a LOT of fuel for the generators on their premises.  

“We decided that increased insurance was going to be a much better investment.”

On the other hand, a backup generator has worked well at some stores. Thalia Lawrence of Ever’man Natural Foods Co-op, located in the Florida panhandle, commented (May 17, 2012):

“We have had one since June 2006. Best insurance we ever purchased! It is an automatic changeover, natural gas powered, full store 150KW Generac generator. We did the entire project for about $50,000.”

Regarding shoplifting, there are useful resources outside the co-op, such as the local police, as remarked by Renate Kopynec of Wild Oats Food Co-op (Aug. 27, 2011):

“We found that the best place to start is by contacting the police and asking them for their advice. They may even have some written guidelines on shoplifting for retail operations. Laws around shoplifting vary from one state to another. The dollar value of the theft impacts the consequences.  Following the chain of evidence, apprehending the suspect, deciding whether to call the police, issuing a formal no trespass order -- these are all pieces of an overall policy. Ultimately, though, Amber [of Ocean Beach People’s Food Co-op] makes a good point - we catch you shoplifting, you can't come back . . .(unless you are 8 years old with your hand in the bulk chocolate bin -- then we just tell your mommy).”

Retailers need clear and firm shoplifting policies, as described by Anne Hopkins of Good Foods Co-op:

“Since we are a private store, we can "ban" anyone from our premises for a good reason such as shoplifting.   When we catch shoplifters, we call the police, have the offenders arrested and ban them from ever coming in the store again.  We tell them we have their picture in our offices and we will remember if they come in again.  Then we can have them arrested for trespassing.  It may seem cruel but we have to protect our owners' assets, and if we don't aggressively do that, we would once again become the easy place to steal from.  I'm as soft-hearted as the next person and certainly have compassion for the woman who said she only stole for her children (!), but it's theft pure and simple.  They can tell their excuses to the judge; I've become very hard-hearted in this area.  And I'm sure we all have amazing stories about shoplifters in our stores!  We should write a book..."

The legally delicate aspects of apprehending shoplifters was stressed by Paul Feiner of City Market/Onion River Co-op:

"I … wanted to comment on how delicate apprehending or approaching shoplifters could be. We deal with this situation almost daily and I can guarantee you that if I haven't caught someone for the day, and even if I did, a few more got away. The key is to have one or two people specifically trained on dealing with shoplifters, whether your store wants to actually apprehend folks to recover the product and issue a Notice of Trespass, have the individual pay for the product or just document the incident. There are huge liabilities in any state associated with shoplifting and that is why it is important to have those one or two people handle the situation and not your whole staff. If a staff member misses a step and attempts an apprehension the liabilities around making a mistake could include the individual being charged with a serious crime and not to mention civil litigation of the individual and the store. Our general staff members are trained to contact me directly or gather information, in my absence, if they observe anything suspicious.

"As I am typing this I had to run to the floor to apprehend a shoplifter and issue a Notice of Trespass.

"We also have a very large and advanced Security Camera System that we utilize to review and document incidents for evidence."

An unusual approach to shoplifters was described by Late Harris of Belfast Co-op:

“Whenever possible, we work with the Restorative Justice Project of the Midcoast < (also based in Belfast) through a conference circle process with shoplifters, in which a paired team of facilitators brings together the victim, offender, mentor (community volunteer with works with offender) and community participants and offers a chance for victims to talk about how they felt and the impact of the offense, and for offenders to accept responsibility for their actions and restore the relationship. 

“All conference participants have the opportunity to share and provide input into an agreement with the offender, working with their mentor, will have six months to complete. If the agreement is successfully completed, a closing conference is held and the juvenile shares their experience with the group. The program has a 95% success rate of individuals not re-offending.  

“I participated in one of these circles recently with a pair of adolescent males who'd gotten caught up in risk-taking behavior (I think many of us can relate), in this case stealing. It was very powerful.”

Dana Huschle of Bozeman Community Fod Co-op commented on in-store security cameras:  “We like our members to know what we're doing in this arena, We installed camera's throughout the store and it's been great really helps in prosecution, but also has helped us identify trouble spots in the store. It also helps at the time clock for those staffers that forgot to punch out. But it takes a commitment of time and money, you have to staff it, or it does no good. We also have electronic access to the building now with the 'fobs' and while it has its problems, it also gives us assurance that we know who's coming and going. Combined with the cameras we don't regret going with this kind of system.”

Regarding theft by employees, some typical questions were addressed by Becky Nichols of Linden Hills Co-op (Nov. 11, 2011):

“Who makes the determination about whether or not theft has occurred?   

“We do a thorough investigation. It usually involves me and the GM. We pull camera footage, take witness accounts, and keep an eye on the employee suspected of theft. Sometimes we catch them in the act and occasionally they've tripped up and shared the details with a coworker who reports it. Usually, by the time we are on to someone, they've been stealing for awhile.   

“What kind of evidence is required? How do you deal with situations in which a person says s/he had intended to pay but forgot to do so?   

“We require all employees to pay for items before consuming them or bringing them to the back areas so this is not an issue.  

“When an employee is found to have taken something without paying for it, do you consider intent when determining penalties? If so, how is intent determined?   

“We do not consider intent. How would that be determined? We've found that people who steal the most are generally good liars or full of numerous excuses or have a great sense of entitlement.  

“What is the punishment for theft? How are staff informed about theft policies?  

“Punishment is termination.   I inform new employees of the policy at orientation and the GM teaches a class in which both internal & external theft issues are discussed. It's also mentioned in our handbook."


Item Details

Resource Type: Document Page
Created date: March 3, 2013
Last Updated: May 29, 2015