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Employee Theft Can Happen in a Self-Storage Operation … Here’s Why, Plus How to Spot and Prevent It

When employee theft occurs in a self-storage operation, it can be devastating. Not only does it constitute a breach of trust, it can severely harm the business financially. This article will help owners and supervisors understand why and how these incidents occur, plus how to spot and prevent them.

Rick Beal

November 10, 2023

7 Min Read

Employee theft cuts deep for self-storage owners. Not only is it a breach of trust, it can have a profoundly negative impact on the business. Personally, I’d much rather experience a theft from someone on the outside vs. a staff member. Internal incidents involve individuals who are woven into the very fabric of your organization. They’re privy to sensitive information and entrusted with responsibility.

This kind of break not only disrupts your self-storage workplace, it can lead to long-lasting damage to the company’s reputation and morale. And because employee theft often isn’t detected right away, it can go on for a long period of time. For these reasons, it’s essential to have a system of checks and balances in place to help keep bad employees out and good ones honest.

Why It Happens

Employee theft can stem from various motivations, ranging from desperation to basic opportunity. Common reasons behind these incidents include:

Financial pressure. Employees facing money trouble may succumb to the temptation of stealing to alleviate their problems. In self-storage, staff have many opportunities to take cash, valuable items or even customers’ personal information, like credit card numbers.

Lack of oversight. Inadequate supervision or a lack of security measures can create an environment in which employees believe they can get away with stealing. Self-storage is a great business because of the limited amount of staffing required, but there are times when that’s a double-edged sword. The absence of other people overseeing work can encourage some individuals to take advantage.

Opportunity. Impulse or easy access can also be a motivator. There are times when facility staff may have ready access to valuable tenant belongings, making it easy for them to take items without immediate detection.

Ways Theft Occurs

So, now that we know that motivation and extenuating factors can lead to employee theft, let’s look at ways it manifests in a self-storage environment.

Stealing money. This is often in the form of “skimming off the top.” For example, let’s say a customer pays in cash. An unscrupulous manager might go into the management software to issue a partial credit or waive a late fee on the account to reduce the customer’s balance, then pocket the overage. This type of activity can go unnoticed for some time, especially when financial discrepancies are small and not examined.

I once had a manager who told customers the credit card reader was down, so they needed to pay in cash. He would issue a written receipt and keep the cash. In the software, he would move them out, then move them back in on a new-rental promo. In fact, manipulating inventory records is a common way to steal in self-storage. Employees can  falsely mark stored goods as “abandoned,” “moved out” or “disposed of” while retaining them for personal use or resale.

Unauthorized access. Some employees use their access to storage units to steal items without leaving any obvious signs. This can be particularly difficult to detect, as tenants need to realize their belongings are missing before they report it. This type of incident can be as simple as taking an item out of a unit up for auction or grabbing something from a tenant’s space that’s left unlocked.

Time theft. Employees sometimes misuse work hours by engaging in personal activities instead of performing their job responsibilities. This can go beyond simply watching Netflix or reading on the job. I’ve discovered managers clocking in and actually leaving the property.

Warning Signs

Before we dig into some of the red flags of employee theft to look for, please keep in mind that these are only possible warning signs and don’t by themselves constitute malicious behavior. It’s critical to conduct your due diligence and thoroughly vet the issue before taking any action. The last thing you want to do is accuse a team member without some sort of viable proof.

Irregular records. As you examine site reports, look for a pattern of inconsistencies, unexplained discrepancies, missing payments, credits or notes that just don’t make sense. If someone steals once, you can be sure they’ll do it again.

Sudden changes in employee behavior. This is often in the form of complaints about pay, how much they do for the company or how they aren’t recognized for their hard work. They might say things like the store is “rolling in cash” or they aren’t being paid what they think they’re worth. Whenever these types of conversations occur, it’s a giant red flag for potential theft. I’ve often found that once an employee is on this disgruntled path, it’s difficult to keep them on, even with a bump in pay.

Unexplained losses. Frequent reports of customers’ missing items without a logical explanation for their disappearance may indicate internal theft.

Responding to Incidents

Discovering that one of your self-storage employees is stealing from you can be heartbreaking, particularly in a small operation. However, it’s imperative that you look out for your business and proceed in a professional manner. I recommend the following.

  • First, gather sufficient evidence to support your suspicion before acting. This can include copies of financial records, security-camera footage and eyewitness accounts.

  • If you have strong evidence of theft and the scale is large enough, involve the appropriate authorities to handle the situation legally and professionally.

  • If theft is confirmed, take immediate action to terminate the employee. This’ll prevent further theft and clearly demonstrate to others that such behavior won’t be tolerated.

Theft Prevention

There are two sayings that come to mind when I think about theft: “An ounce of prevention is worth a pound of cure” and “Keep good people honest.” Taking proactive steps to avoid bad behavior is the best strategy to protect your self-storage business. If someone is going to steal, they will. Your goal should be to stop them and keep other staff on the up and up; so, set up some practical measures that serve as deterrents and detectors.

Screen employees thoroughly. During the hiring process, conduct background checks and verify references to ensure you’re bringing in trustworthy individuals.

Establish strict controls. Limit employee access to storage units. Only authorized personnel should be able to enter storage areas, and their access should be logged and monitored. Do not keep customer keys on file, no matter what you have tenants sign on the matter. I can’t stress this enough.

Implement surveillance. Install security cameras in critical areas such as entry points, corridors and storage units. Visible cameras act as a deterrent and will help capture evidence if theft occurs.

Conduct audits. It’s important to regularly review financial records and do physical site walk-throughs to identify inconsistencies. Promptly address any discrepancies.

Provide employee training. Educate staff about the importance of integrity and the severe consequences of theft. Establish a code of conduct and ethics policy as part of your employee handbook or policies-and-procedures manual.

Do random checks. Periodically perform surprise inspections of storage units as well as employee workstations to discourage theft and ensure compliance with security protocols.

Consider tenant insurance. Encourage customers to have coverage for their stored belongings. This provides an additional layer of protection against potential losses due to theft and other incidents.

Establish a positive work environment. Create one in which employees feel valued and able to openly discuss concerns. Keep up to date with staff members. Make sure they know that you’re there for them and care about their well-being.

While most self-storage employees are honest and dedicated, the possibility of theft can’t be ignored. By understanding potential motivations, recognizing warning signs and implementing preventive measures, facility owners can significantly reduce risk and create a secure environment. Maintaining vigilance, fostering a culture of integrity and embracing modern best practices are essential to ensuring your operation’s continued success.

Rick Beal is co-founder of Atomic Storage Group, a third-party management and consulting firm for the self-storage industry. His expertise includes business and management consulting, project management, marketing and pricing strategies. To contact him, email [email protected], or stay up-to-date with his publications and speaking engagements on LinkedIn.

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