Employee Theft Ranks Close to Shoplifting

woman shoplifting
Highwaystarz-Photography/iStock

Every year shoplifting costs business owners billions of dollars in losses due to theft but the heavy financial burden of product theft losses are ultimately passed on to consumers in terms of higher prices.  Heavy losses can also lead to retail stores closing stores (or keeping them from expanding into certain areas), which also means loss of jobs.

Unfortunately, as aware as most people are of problems with shoplifting, only slightly behind shoplifting, and just as significant are losses due to employee theft.

Who Shoplifts?

In 2008, a large study published in The American Journal of Psychiatry reported that men shoplifted more often than women.  The study also found that women are most likely to shoplift articles of clothing, food and groceries, and perfume. Men were found to be more likely to go for larger, more difficult items to steal including televisions, power tools, and even household appliances.

Shoplifting is a serious crime, but this seems a little stereotypical -- men and power tools and women and cosmetics?  So I got curious and dug a little deeper.  I assumed (incorrectly) that stealing from stores was something kids did, you know, bubblegum and candy; maybe even a pathetic right of passage for teens.  I found that I was not only wrong, but a lot wrong.

Most shoplifters are adults (75%) — not kids, although most adults who steal say they started in their teens those who habitually steal are adults.

  Despite lacking the impulsive adolescent brain, most adults also seem to steal for similar reasons as you might suspect are also the reasons kids steal:  they give into pressure and get a thrill or “high” from shoplifting.  (Shopliftingprevention.org)

How to Protect Against Shoplifting

Major chain stores tend to aggressively prosecute shoplifters to serve as a deterrent against future shoplifters.  If convicted, shoplifters often end up paying restitution, fines, and will have a criminal record, and some may even serve time in jail or are required to perform community service.  (Crime really does not pay — so just do the right thing and pay for your items.)

Here are a few more measures you can take to help prevent losses due to shoplifting:

  • Have someone standing by the exit door and ask to see receipts (especially for large items).
  • Don't make the mistake of assuming only kids steal.
  • Have a written policy in place for how you will handle shoplifters that are caught.
  • Publicly post your policy that you aggressively prosecute all shoplifters.
  • Train all staff on how to make eye contact and engage all new shoppers to show that your store is attentive.
  • Install security cameras, let people know you have cameras, or even have all cameras (and mirrors) in prominent places.
  • Never assume that a shoplifter can't outsmart your security practices -- if you are continuing to suffer losses hire a theft prevention specialist to assess your practices.

    Economic Costs to Business Owners

    In 2014, shoplifting and other fraud (i.e., check fraud for purchases) cost retailers $44 billion dollars.  Those losses are passed along to paying customers in a variety of ways. But as troubling as shoplifting statistics are, employee theft also leads to billions in losses each year.

    In 2014:

    • 38 percent of reported inventory losses were due to shoplifting
    • Employee theft accounted for another 34.5 percent of losses
    • 6.8 percent of losses were due to vendor fraud
    • 16.5 percent of losses were due to paperwork theft

    Deterring Employee Theft Begins with Good Management

    The best method of deterring employee theft is to hire trustworthy employees, but running backgrounds checks on every job applicant can be expensive and still is not a pure measure of someone's character when put to the test.

      Employers can make their business places secure with cameras and checkpoints for employees, but studies show when people are treated as though they are to be distrusted, they tend to make more impulsive (wrong choices) later on down the road.

    Instead of constantly reminding your own employees that you "have their eye on them" it is more productive to be an environment of respect and trust.

    Holding regular meetings with employees and fostering a worker-friendly environment can help increase employee loyalty.  Other ways you can help keep employee theft to a minimum:

    • Offer incentives to departments, teams, or individuals for a job well done.
    • Recognize and reward good behavior.
    • Allow for anonymous employee concerns about other employees.
    • If you notice employee theft, work swiftly to shut it down by letting all employees know that you are now aware of what is going on and are taking aggressive steps to stop it from happening again.

    Be Clear About Your Theft Policies

    If you are not clear in your policies you could be accused of wrongful termination -- even if you can show that the employee was guilty if you have other employees doing the same thing who were not fired.

    If you have a zero-tolerance for shoplifters, you need to decide in advance if you will also have a zero-tolerance for employee theft (most employers probably do) otherwise you run the risk of appearing to show favoritism to some employees (if you are lenient) or be accused of discriminatory practices if you only fire a certain group of employees (i.e., only women or minorities).