Because charity shops often operate on a greater level of trust than regular retail outlets they can sometimes be seen as soft targets for both shoplifters and corrupt staff or volunteers.
The role of charity shops involves much more than just selling donated items. They also offer your organisation a window on the high street. But combatting fraud and theft in this area can be challenging because many of the usual rules around inventory don’t apply, and shops are staffed by volunteers, employees or a mixture of both.
‘Charity retail theft’ and ‘charity retail fraud’ are intrinsically linked, but charity retail fraud involves an element of deception. The distinction can be illustrated as follows.
Given the close relationship between theft and fraud it is important to have clear processes in place so that staff and volunteers know where to report concerns and when to report to the police and/or charity regulator.
In addition to internal and external fraud, an employee working with a third party can increase the frequency and value of a fraud or theft.
These safeguards should always be considered.
It is also worthwhile considering the need for a dedicated profit/revenue protection team to manage security and theft, and a counter-fraud function to manage larger cases and fraud.
Certain kinds of behaviour can be red flags for retail fraud.
None of these are clear-cut evidence of fraud, but they might point to the need for further investigation.
If you suspect charity retail fraud act promptly.
Building your fraud defences
Preventing Charity Fraud contains resources to help charities prevent, detect and respond to fraud.
This helpsheet was kindly prepared by Cancer Research UK.
Published 2019. Last updated August 2021.
© Fraud Advisory Panel, Charity Commission for England and Wales and Cancer Research UK 2019, 2021. Fraud Advisory Panel, Charity Commission for England and Wales and Cancer Research UK will not be liable for any reliance you place on the information in this material. You should seek independent advice.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.