Ask any timber or builders merchant if stock loss is a problem and, more often than not, the answer is yes.
In some cases only a few items go missing but in others tens of thousands of pounds are being lost. With customers, and trucks, coming and going all day long who’s to know if every sale is kosher?
One man who knows what to look for is Paul Burton, of security firm Burton International plc.
Mr Burton, who has an MSc in criminology, is internationally respected for his security knowledge and is security trainer for the Builders Merchants Federation (and previously a consultant for the TTF).
His services including test purchasing, surveillance, security surveys and even undercover operatives or ‘moles’. He employs 110 staff with an annual turnover of £2.5m.
Mr Burton says theft is a big problem for merchants and knows one major firm that spends about £1.5m on security every year.
‘There is not one timber merchant in the UK that is not experiencing theft,’ he claimed. ‘I see small companies go to the wall because of theft. They’ve just been forced out of business.’
He said 15 years ago an estimated £633m was being lost annually by builders and timber merchants. That could now be pushing £1bn.
The cuplrits, said Mr Burton, are mainly either unscrupulous staff doing ‘deals’ with customers and lining their own pockets, or ‘customers’ driving away with materials they haven’t paid for.
One timber merchant told TTJ that a former member of staff handed out thousands of pounds worth of goods in exchange for cash bribes. But because evidence was hard to come by, the case was dismissed at court.
Usually, Mr Burton sees businesses losing £70,000 a year. The theft has generally been going on for at least six months with about five staff involved. With losses of this magnitude, stock is going missing by the truck load, rather than just a few extra items bunged to the customer for a backhander.
Test purchasing
Test purchasing is one method of sniffing out the problem. Dressed like builders and driving vans with company names on the side, test purchasers tell yard staff they are ‘working’ on a site in the area. They buy items and gauge the honesty and integrity of staff.
‘We are putting a set of eyes in the yard to see what’s going on,’ said Mr Burton.
By questioning the merchant, asking the type of products unaccounted for and various staff working hours, the test purchasers can narrow down where the loss is coming from – perhaps at lunch times when fewer staff are around, or outside the merchant’s actual opening hours.
Sometimes ‘customers’ steal by taking double loads – taking goods and coming back 20 minutes later for an extra load, having paid for just one.
At some merchants, customers are given a ticket on purchase and then collect their goods off the shelf. But what they take away does not always correspond with the ticket. Sometimes the system is the reverse but, again, the purchaser may have more on his truck than he tells counter staff.
The thieves know which merchants are poor on security and target them. Also there are yard staff who let regular customers have goods free as a ‘favour’ – perhaps with a ‘thank you’ tenner in exchange.
Mr Burton remembers one merchant who suffered losses because staff were re-opening the yard after the branch manager had closed for the day. Staff pocketed the extra money made.
The ingenuity of some dodgy staff to rip off employers was displayed in the case of a Welsh timber merchant. At lunchtimes some staff members threw timber into the adjoining river and the tidal flow took it downstream to their accomplices. The culprits were fined.
In another case, a branch manager made the most of the fact that his name was the same as the company. For years a number of cheques were made out to the manager, rather than the firm, by customers believing him to be the owner.
Easy targets
A further example which ended in a short prison sentence, was a depot manager who transferred company goods to stock his own timber merchant nearby.
‘Thieves are attracted to merchants because, in the majority of instances, they are wide open. Builders and timber merchants are nervous about having a security guard on the gate because it’s against the ethos of selling,’ said Mr Burton.
‘The really successful timber merchants have a security guard with product knowledge, who knows what is going in and out. He does not work for the company and gets changed every 18 months or so.’
Relying solely on CCTV cameras is a mistake, Mr Burton believes. They need to be monitored, the tapes changed and reviewed, which is not always done. ‘As soon as the product is gone it has gone.’
