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From security systems to heavy-duty locks, small-business owners spend billions annually to keep thieves out, overlooking how most heists are inside jobs. In retailing alone, employee theft cost companies $34.5 billion in 2011, accounting for 43.9 percent of total losses, says the National Retail Federation. By comparison, shoplifting accounted for 35.7 percent.
There are countless ways workers steal from employers, but here are five of the most common with ways to fight back using the latest in digital security:
Problem No. 1: Taking money from the register
Credit and debit card purchases may be on the rise, but cash is still king with some businesses -- and with many crooks.
Solution: Internet Protocol cameras
Analog tape, closed-circuit video cameras have long watched over cash registers, but a new wave of Internet Protocol (IP) cameras is bringing greater convenience and new features.
For example, Atlanta-based MySnapCam provides small businesses with live streams from internet-connected video cameras. Perfect for offsite viewing via internet-connected computers or mobile devices, the service not only enhances loss prevention, but also monitors customer service and other workplace issues.
Accessible through web browsers, Android and iOS apps, the service can use up to six cameras and costs between $19.95 and $39.95 per month. Features include motion detection triggers, text and email alerts, cloud storage and simultaneous viewing on multiple devices.
Related: How to Maintain Security When Employees Work Remotely
Problem No. 2: Copying the company's digital assets
Armonk N.Y.-based I.B.M. declared 2011 the year of the security breach, and sadly, things haven't improved much this year. That makes logging network activity paramount in protecting a company's digital assets, whether from thieving employees or anonymous online snoops.
Solution: Cloud-based security services
Most small businesses don't have the bandwidth to keep watch over their network, making Check Point SMB Cloud Managed Security a potentially valuable investment. The San Carlos, Calif.-based firm manages a range of remote security measures, such as firewall maintenance, intrusion prevention and antivirus monitoring.
When it comes to employee theft, the service's auto-logging and reporting feature may be most valuable. By recording network activities and keeping detailed logs, companies can see which files were moved where and by whom, crucial information for recovering stolen data. Prices start at as little as $19 per month.
Problem No. 3: Stealing customer data
When thieving employees leave a company, they prefer to steal customer data over other kinds of files, according to Boston-based information management firm Iron Mountain.
Solution: Data encryption services
Encrypting customer data can be vital in dealing with this problem. One solution is the Dataharbor backup appliance from Vancouver, Wash.-based CRU Dataport, which restricts access on the hardware level.
Starting at $1,599 (a one-time fee for equipment) and coming in varying storage sizes, this small business-oriented solution can create backup copies for up to 25 PCs. With either two one-terabyte or two two-terabyte removable drives, the device allows for both local and offsite backup. Just pull out one of the drives and store it in another location, and your company's data is backed up.
In addition, Dataharbor's hardware-based encryption makes the drive hack-proof. Geared toward industries that can't risk data loss, like healthcare, legal and financial services, Dataharbor comes with the easy-to-use Microsoft Windows Server Storage Essentials software built in and supports remote administration for companies that contract out their IT services.
Related: How to Make Sure Company Secrets Stay When Employees Move On
Problem No. 4: Pilfering products
To try to keep products from walking out your door, you need to start with sound inventory practices. But traditional strategies like counting items in stores and warehouses can be a time-intensive task.
Solution: Radio frequency identification tags
These tags, known as RFID, come in two varieties that readers can detect either up to 40 feet way or up to 300 feet away. This makes it less laborious to account for shelved or stored products, allowing for an inventory to be conducted more frequently.
Examples include Inventive, a warehouse management solution by Paris-based Vizbee RFID Solutions, and various products by Boca Raton, Fla.-based ActiveWave.
Tags can cost upwards of $5 apiece, depending on their range, and handheld scanners are priced around $1,000. So these might make the most sense for high-end retail or high-volume warehousing businesses. Expect prices to fall, as large companies such as Wal-Mart Stores have adopted the technology and mandated it for their suppliers.
Problem No. 5: Cheating on time sheets
Payroll fraud is so rampant in the workplace that you may have committed it without even noticing. Coming in late, leaving early and taking extended breaks shave time off the workday -- and also steal from the payroll budget.
Solution: Biometric identification systems
These systems keep employees accountable for their time on the job and prevent "buddy punching," the practice of having colleagues clock their peers in and out.
One of the many monitoring products is uAttend Employee Management System, which uses fingerprints, facial recognition, RFID badges and web interfaces to track employee time on the job. With cloud-based functionality, iOS and Android capabilities, as well as plenty of customization, uAttend's readers can cost as little as $139. The Carlsbad, Calif.-based company's monthly service charge runs as low as $19.
While it can be a cost-effective way to enforce employee accountability, the best approach might simply be to hire trustworthy workers in the first place. After all, as the old proverb says, locks only keep honest people out.
Related: Tech Tools for Keeping a Digital Eye on Employees