How to Detect and Prevent Sweethearting in Retail

As Valentine’s Day approaches, it’s essential to address a critical retail security challenge: sweethearting, a form of internal theft impacting retail businesses. Implementing advanced retail security systems and loss prevention strategies can safeguard your business from this pervasive issue.

Sweethearting is a form of internal theft in which an employee gives free or discounted merchandise to a friend, family member or fellow employee. They can accomplish this in many ways:

• Not scanning a product
• Changing the price of a product
• Intentionally voiding a product after scanning it
• Giving refunds or store credit for merchandise that was never actually purchased

Have you ever received a free drink at a coffee shop or bar? Gotten a free car wash because a friend or family member works there? Received an employee discount at a grocery store even though you don’t work there? These are all forms of sweethearting.

Some of the more recent trends in sweethearting involve employees using their store bonus/loyalty card instead of the customer’s card to rack up rewards and free products or putting more expensive products (such as steak) in packaging that carries a lower price tag (such as ground beef).

Employees engage in sweethearting for a variety of reasons, including receiving a better gratuity – in the case of servers and bartenders – or receiving the same in return at the customer’s place of business.

The Financial Impact of Sweethearting on Retail Loss Prevention

Internal theft, including sweethearting, accounts for billions of dollars in losses annually for U.S. businesses. For retailers, this underscores the importance of adopting robust retail loss prevention strategies, including leveraging advanced retail security systems

In the first study to analyze the role of sweethearting in employee theft, nearly 800 retail service employees and customers were surveyed, and a staggering 67% said they had participated in sweethearting in the past two months.

As a result of the crime’s pervasiveness, sweethearting contributes to an annual loss of nearly $50 billion in shrink for U.S. retailers, posing unique challenges to business’ retail loss prevention efforts.

The resounding question for store owners and managers is: How do I detect and prevent sweethearting?

Leveraging Retail Security Systems for Effective Sweethearting Detection and Prevention

Detecting and preventing sweethearting requires sophisticated retail security systems that integrate video surveillance, exception-based reporting, and real-time alerts. These tools enable retailers to enhance loss prevention efforts and protect valuable assets.

Many retailers are turning to business intelligence software that combines video surveillance and exception-based reporting to catch employee theft and sweethearting in real time.

Using these types of software solutions, business owners and executives can see which employees are stealing and can catch them in the act. Based on specific key performance indicators (KPIs) or exception ranking, these solutions can send automated alerts to notify management with a link to video surveillance footage tied to the data in question.

Additionally, many other sources of data can be tapped into, giving businesses greater insight into their traffic counts, end cap effectiveness, heatmap traffic flow, loyalty card activity and a variety of POS exceptions – such as no sale, cash sales, high-dollar transactions, repeated transactions, excessive returns and coupons/discounts, employee discounts and repeat customers, to name a few.

By analyzing various business and security system data, the software can differentiate between different types of transactional parameters, as well as rank them based on importance, to identify areas of concern correlated with supporting video surveillance footage to tell a more complete story.

Dynamic dashboards and customized reports can then highlight where the greatest losses are and the employee(s) in question, what action of concern was performed, which terminal the action occurred at, and show corresponding video footage for management’s review.

This type of software helps businesses monitor and identify untrustworthy employees, increase apprehensions and prevent further loss due to a variety of questionable behaviors.

Sweethearting – and other forms of internal theft – is a pervasive crime that can be detrimental to many retailers. However, it can be detected and deterred by leveraging security systems and advanced software solutions designed to boost retail loss prevention measures.

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