Time Theft in Retail: How Much It’s Costing You and How to Prevent It


This is a guest post from our friends at Deputy.

Kristin Harris, the General Manager of Deputy, the cloud based time and attendance platform for all businesses, takes a close look at time theft and what it’s costing your retail business.

In the retail industry, employee theft can be a significant part of shrinkage losses in any store. In some cases, this may be as high as 41% of the total loss.

Yet, while you may be using technology to stamp down on staff theft by reducing opportunities to remove cash from POS terminals, taking items without paying for them, or deliberately damaging stock so it can be purchased on staff discount, many retailers are blindly unaware of how much time theft is costing them.

In research undertaken by global recruitment firm, Robert Half, it was found that the average employee “steals” approximately 4.5 hours per week from their employer. Add this up, and it comes to nearly six full work weeks per year. Time theft costs businesses hundreds of billions of dollars a year worldwide.

It’s a common problem and comes in many forms, such as:

  • Timesheet fraud – where employees round up to the nearest hour or lie about hours worked;
  • Break abuse – where employees take longer or more frequent breaks than authorized;
  • Buddy punching – where employees clock in or out for a colleague who is not there;
  • Personal business – where employees make and receive personal phone calls, send personal texts and emails and spend work time on social networking and other personal business.

A study published by the American Payroll Association reported that buddy punching was widespread, with more than 75% of companies losing money from this practice.

Let’s assume you pay your employees on average $25 an hour. If each employee takes just five minutes when they clock in and five more at the end of their shift it is a total of ten minutes per shift.

Assume you have three employees per shift. That is the equivalent of 30 minutes per shift.  Over a 52 week year, this is the equivalent of 26 hours per year of stolen time per shift. Using the average wage you pay them, this is equivalent to $650 per year.

Of course, when you apply multiple shifts and a greater number of employees to this equation, the amount of stolen time quickly escalates.


How to minimise time theft

Take a good look at your company culture. A positive work environment can prevent employee theft of all kinds. Put in place a clear organisational structure, written policies and procedures and fair employment practices.

In your policies, clearly spell out what is considered acceptable use of company time. You don’t want to be a stickler when it comes to keeping schedules, but at the same time, your policies shouldn’t be too lenient that they’re easy to abuse.

The key here is to implement guidelines that are reasonable both for you (the employer) and your staff.  For instance, you can provide grace periods that give your staff some flexibility when they’re taking a break or clocking in and out. Or, instead of banning social media and personal phone calls, you can allow reasonable use, so employees don’t feel that they’re being smothered.



Needless to say, you need to be fully accountable for paying your employees what they are entitled to. Conduct regular audits of your employees’ pay slips to ensure compliance with the federal and state wage and hour laws.

To achieve accountability and eliminate errors from manual processing, an automated time and attendance system is a must.

Using an app such as Deputy allows you to track and record where and when your employees work. Timesheets are created automatically and using our in-built geo-location or face-detection technology you can also see where your employees have started and stopped their shifts.

Don’t forget, your employees are the backbone of your business. Acknowledge their contribution, reward them appropriately and you’ll minimise time theft and maximise the positive effect they can make on your bottom line.


Disciplining employees for time theft

While time theft is a serious issue, proving your employee behaved dishonestly is rarely (if ever) grounds for dismissal. Consult your HR advisor where possible or seek professional advice to map out the best course of action.


About Deputy

Deputy is the cloud based time and attendance platform for all businesses. Providing an all-in-one employee scheduling, time and attendance, tasking and communication platform, Deputy helps you better manage your team from anywhere. www.deputy.com

About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.