Consumer theft is one of the biggest concerns of many businesses. That is certainly understandable, since shoplifting costs businesses about $30 billion each year. However, businesses that rank consumer theft as their primary concern need to reassess their priorities. They are facing a much bigger threat they pay little attention to: employee theft.

Internal shrinkage accounts for nearly half of all retail losses each year. Shoplifting and organized crime combined accounted for less than a third of all retail losses. If you are a retailer, you need to open your eyes to the risks of employees shoplifting and take measures to prevent it.

One of the reasons employee theft is so costly is that it goes undetected for so long. The average internal thief gets away with their crimes for a year and a half before they are caught; some are able to cover their tracks for years without detection.

Here are some tips you should follow to reduce the chance that you can expose anyone who is stealing from you.

Conduct a Thorough Background Check

A school district in one community hired a woman to serve as their district treasurer. They didn’t finish doing a background check on her until after she was already hired. The background check revealed that she had been convicted of embezzlement a decade earlier.

Similar mistakes happen almost every day. Make sure you know who you are hiring before you put them at the desk. If your state or province allows you to conduct a pre-employment background check, then you should seriously consider it.

Look for Changes in Work and Personal Life

Within reason, it is always good to have an idea of what your key employees are doing with their personal time. You don’t need to go out of your way to ask them overly personal questions about their home lives, but you should have occasional conversations….you may find out one of your employees has a gambling problem. If one of your employees suddenly starts spending money like it’s going out of style, you may want to watch them a little more closely.

You should also look for changes in the way your employees behave at work. Here are some things you should look out for:

An employee who used to always leave early is routinely staying late.
They prefer to work independently.
They don’t take vacations (employee pilferers know their crimes are likely to be discovered when they aren’t around to cover things up).
They are particularly secretive about their behavior.

It is important to monitor all of your employees for anything out of the ordinary.

Set a Zero Tolerance Policy on Theft

Employees are much less likely to steal if they think they are likely to get caught and the consequences will be severe. Set up a zero tolerance policy on theft the moment they are signed on. Then emphasize every day that you enforce those rules strictly. Here are some steps you can follow to make sure that they are less likely to steal from you:

Routinely audit your financial records and make sure your employees know that you check the books carefully.
Make sure you have a system in place for employees to report theft anonymously.
Never allow one person to handle all finances.

Keep Your Employees Happy

Employees are less likely to steal if they respect their employer and are happy with their jobs. Do everything you can to create a happy work environment. Being there to respond to employee concerns and keep them from becoming overly stressed will help you keep them from resenting you and feeling justified stealing. Keeping an open line of communication will also alert you to personal problems that could create the temptation to steal.

Understand the profiles of Employee Thieves

Make sure you understand who to keep an eye on. The employee who is most likely to steal is usually the one who is least expected. That is one of the reasons embezzlement can go on for so long. According to statistics from the Association of Certified Fraud Examiners, younger employees are most likely to steal. However, older employees are typically the ones who steal the most.

Managers are responsible for the biggest cases of fraud. Make sure you don’t overlook your managers in your attempts to identify a potential thief within your ranks.

The Small Business Administration claims that 60 percent of small business failure is caused by employee theft. You will need to work diligently to ensure it doesn’t destroy your business.

Kalen Smith is a business and entrepreneurship writer working with Blue Sky Formations, where he writes about company registration and company searches.

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Gary Shouldis

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Gary Shouldis is a father, husband, business owner and blogger. He is the founder of 3Bug Media , a web marketing company that helps small business owners and service professionals get found online. You can give him a virtual high five over at Twitter or on Google Plus