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Connor Wolanski

Connor Wolanski Content Marketing Specialist

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How Does Employee Theft Happen?

*This article previously appeared in the Reynolds and Reynolds FUEL monthly newsletter*

By Scott Worthington

While it’s always important to implement processes that protect your dealership from fraud and theft, it’s just as critical to know the reasons why an employee might decide to steal from you. Let's dig deeper into employee theft and embezzlement to give you more insight to protect your dealership.

Key to understanding this is the Fraud Triangle, which breaks down the factors behind why employees steal thus:

Motivation: Does an employee have incentive to commit fraud? Is there pressure motivating them to embezzle? Often we hear stories about dealership employees who are struggling with something outside of work. It could be anything: pressure to pay off credit card debt, illness, a craving for a different lifestyle. In one case, a dealership employee stole millions of dollars so she could buy her family extravagant luxury items and take them on international trips. The reason? She wanted them to feel loved and she wanted to feel like a good mother.

Justification: Does the employee feel stealing is warranted? Maybe she was passed up for a promotion. Maybe she notices coworkers taking long vacations she can’t afford. Maybe you’ve been asking her to work a lot of overtime. To someone without the justification, it might seem far-fetched that these are reasons an employee would steal. But for the employee? These feel like valid reasons to commit fraud or embezzlement.

System Opportunity: Once an employee has the motivation and justification to steal, there is only one more step their brain must make before they start. Can they get away with it? Of the three sections in the Fraud Triangle, this is where you have the most control. Does your dealership have processes in place to deter theft? Processes not only make the dealership run more efficiently, they also show employees you’re keeping tabs on the dealership, even if you aren’t there. What about a system that monitors transactions across your dealership for suspicious activity? Even with processes in a place, an employee who has the motivation and justification might find a loophole. A dealership-wide monitoring system that informs employees its tracking transactions will take your security one step further.

Keep yourself informed of the ways employee theft happens in the dealership. The more informed you are, the better your chances are of preventing it.

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