Signs of Employee Theft and What to Do Next

The short version

Unexplained inventory loss, voids and refunds, and an employee who never takes a vacation are classic warning signs.
Keep the circle small. Talking to staff too early destroys evidence.
Talk to an employment attorney before interviewing or firing anyone.

Warning signs

Inventory shrinkage that keeps rising or is concentrated on certain shifts
Excessive voids, refunds or discounts from one employee or register
An employee who refuses time off or guards a process no one else touches
Vendor invoices you don’t recognize, or a vendor with an address that matches an employee
Time cards that don’t match what managers observe
Lifestyle that doesn’t fit the salary

First steps

Keep it to a very small group: you, your attorney, and the investigator.
Preserve data: POS logs, camera footage, access logs and email. Many systems overwrite footage within days.
Don’t change anything that would alert the suspect.
Talk to an employment attorney before interviews, discipline or termination.

Mistakes that ruin investigations

Confronting someone before the evidence is in hand
Searching personal phones or bags without a clear lawful policy
Recording conversations you are not part of
Making accusations that become a defamation or wrongful termination claim

How a detective helps

We combine records analysis, discreet observation, background research and, with counsel, structured interviews. Our goal is a clear, documented finding you can act on. See employee theft investigations.

This guide is general information, not legal advice. Laws change and every situation is different; talk to a Tennessee attorney about your case. Last reviewed October 25, 2026.

When you’re ready

How we can help

Licensed Tennessee private detectives, lawful methods, and reports written for the people who will read them.

ServiceEmployee theft & fraudQuiet internal investigations for owners and managers.ServiceBusiness partner due diligenceVetting a partner, investor or buyer before you sign.GuideSigns of workers' comp fraudWhat suggests a claim may be exaggerated, and how activity checks work.GuideBackground check vs. investigationWhy an online report isn’t a background investigation, and when the rules change.GuideVet a contractor in TennesseeLicense checks, red flags and what to do if a contractor disappears with your deposit.

Quick answers

Common questions

All guides →

Can I hire a private investigator to investigate an employee?

Yes. Work with your attorney, especially if the findings may lead to termination or prosecution.

Should I call the police about employee theft?

Often eventually, but many owners investigate first so the report is supported by evidence. Your attorney can advise on timing.

Signs of employee theft, and what to do next