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Embezzlement in Self-Storage: Danger Signs for Facility Owners and Tips for Prevention


By Carol Krendl

Embezzlement is often labeled as a white-collar crime because it refers to the nature of the criminal (a person of respectable status) and the environment in which the crime occurs (a professional setting). White-collar crimes are typically non-violent and intended for personal financial gain. Embezzlement qualifies, incurring all levels of financial loss.

Embezzlement affects thousands of self-storage properties every day. Although it’s not violent, it can cause serious suffering to those involved. The damage is not just financial, it’s personal because there’s a violation of trust. While the punishment for this crime is matched to the value of the property misappropriated, it’s more difficult to make amends for the emotional damage. To eliminate instances of this crime, it’s this interpersonal aspect that must be addressed.

Danger Signs

There are signs of theft and embezzlement for which self-storage owners should be on the lookout:

Employees who never want to take a vacation. The employee doesn't want anyone else at the store to see what’s going on with the computer, physical inventory or customers.

Managers who cannot seem to keep assistant or relief employees. Keep an open line of communication with relief employees. They will often tell you about problems or issues if something doesn't seem right at the property.

Inadequately trained relief personnel. In embezzlement situations, relief employees are often not asked by the manager to make deposits, call delinquent customers or do weekly inventory of the space.

Employees who tell customers they’re the facility owner. This may sound strange, but when an employee wants a complaining customer to go away and not cause any undue attention or problem, he simply says he’s the owner. It’s important that customers have a way to call your home office and make complaints. This keeps a line of communication open between upper management and tenants.

A change in the manager's lifestyle or behavior. Watch out for changes in the way employees live and their buying and spending habits. Managers with medical or IRS problems have extra stress on their personal finances. They may choose to make up the money from funds at the property.

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