Enjoying what you’re reading? Sign up now.

Subscribe
Search

Series: How does employee theft happen? Part 1

Leftovers in fridge
Article Highlights:

  • What three factors play into employee theft?
  • How can you protect your dealership?

Recently, we shared an article about five ways employee theft can occur at a dealership. While it’s important to implement processes to protect your dealership, it’s also important to know the reasoning behind employee theft. In this three-part series, we’re going to dig deeper into employee theft and embezzlement to give you more insight to protect your dealership.

First, we’re going to discuss the Fraud Triangle1.

The triangle shows the factors behind why employees steal. Let’s break it down:

  1. 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.
  2. 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.
  3. 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.

In the next article in our series, we’ll go over specific actions taken by employees committing fraud.

Share this Article

Vice President, Product Management, Reynolds and Reynolds

Scott Worthington is vice president of product management at Reynolds and Reynolds. With more than 30 years of automotive industry experience and a keen eye for challenges facing automotive retailers, Scott leads the team responsible for product strategy for the company’s dealership management system platforms and its supporting solutions.

Related Articles:

3 Creative Ways to Show Customers the Love on Valentine’s Day

For many people, Valentine’s Day means heart candies and flowers, a nice dinner, and a box of chocolates from your loved one. But it’s also

That’s a Wrap: 2023’s Top 5 Fuel Articles and Connected…

If the past has proven anything, it’s that dealerships are able to remain strong and adapt to whatever comes their way. 2023 has been no

The Unsung Superheroes of Your Dealership

Dealers are some of the greatest entrepreneurs in the world, but they don’t operate the business alone. Many will tell you that taking care of

Woman holding mobile phone

Texting Tips: 5 Steps to Better Messaging

Fine tune your texting skills to send an impactful message every time.