employee theft in retail final-1

8/13/2019 Employee Theft in Retail Final-1

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Employee Theft in the Retail Industry

A Review of Current Research

Honors Thesis

Ashley E. Foerst

University of Florida

Thesis Advisor: Richard J. Lutz, Ph..


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Table of Contents

". "ntroduction: #hrin$a%e and E&'loyee Theft in Retail (

A. The #co'e of E&'loyee Theft

). The *ro+in% "&'ortance of E&'loyee Theft

-.

Thesis

vervie

+ /

"". Factors -ontri0utin% to E&'loyee Theft /

A. 1hy E&'loyees #teal

i. 2onsocial a''roach 34

ii. #ocial a''roach 34

). Ho+ E&'loyees #teal 35

i. Traditional theft 35

ii. -urrent trends 3

""". Financial -osts and #ocial "&'lications 3/

A. -ost to -onsu&er

3/


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). -ost to Retailer 36

-.

#ocial -ost 36

"7. Preventin% E&'loyee Theft 38

A. 2onsocial a''roach to theft 'revention

).

#ocial

a''roac

h to

theft

'reventi

on

!5

7.

ishonest E&'loyees !/

A. Ho+ to handle dishonest e&'loyees !/

). The investi%ation !6


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7".

-onclusion !8

A. ''ortunities and -oncerns !8

). Final Thou%hts 54

-. References 53

I. Introduction: Shrinkae and Employee Theft in Retail

The Scope of Employee Theft

Retail and theft %o hand in hand. This 'a'er focuses on e&'loyee or internal theft in the

retail industry in 2orth A&erica. E&'loyee theft is a for& of deviant 0ehavior that %reatly

contri0utes to retail shrin$a%e. Each year, U.#. co&'anies lose a0out 95/ 0illion to shrin$a%e.


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Shrinkaerefers to inventory losses caused 0y sho'liftin%, e&'loyee theft, &erchandise 0ein%

&is'laced or da&a%ed, and 'oor 0oo$$ee'in% Levy and 1eitz, !446;. Althou%h sho'liftin%

&ay receive &ore &edia e


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The "rowin Importance of Employee Theft

Retail theft has al+ays 0een a 'ro0le&? ho+ever, retailers are finally 0e%innin% to

understand the i&'act dishonest e&'loyees &a$e.

The financial i&'act of these cri&es is 0i%%er than the financial i&'act of all street cri&es 'ut to%ether for

a sin%le year. This, cou'led +ith the fact that a &aBority of the losses are attri0uted to e&'loyees and not outsiders,

&a$es dishonesty in the +or$'lace the sin%le &ost si%nificant cri&e 'ro0le& in A&erica Hollin%er, 3>8>;.

Althou%h there are &any statistics and nu&0ers, no one really $no+s ho+ &uch

e&'loyee theft is really res'onsi0le for the noticea0le shorta%es of inventory. Cana%ers rarely

catch e&'loyees stealin% or e&0ezzlin%? rather it is discovered durin% inventory or audits, at

+hich ti&e &ana%ers donDt $no+ +hether the shorta%e +as caused fro& internal, e8>;.

2o+ that retailers are finally ad&ittin% the i&'ortance of e&'loyee theft, cou'led +ith

the onset of an econo&ic recession, ac$no+led%in% and 'reventin% e&'loyee theft has 0eco&e

of ut&ost i&'ortance. Accordin% to a study 0y -hain #tore A%e, 58 of (3 countries have seen an

increase in the a&ount of shrin$a%e, &ost 'ossi0ly attri0uted to 0y the recession. "n addition, as

stores see an increase in shrin$a%e and decrease in 'rofits, they are often cut security costs,

&a$in% the issue +orse.

#verview


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1here does all this o&inous infor&ation lead us ne of the $eys to co&0atin%

e&'loyee theft involves understandin% +hy e&'loyees steal. o e&'loyees steal si&'ly 0ecause

they needG or +ant so&ethin% they canDt afford, or is it &ore co&'licated Also, " +ill e


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This theory +as ada'ted 0y Hayes 3>>5; to fit the retail industry. Hayes refers to his theory as

the e&'loyee theft trian%le.

First, everyone +ho steals needs to consciously &a$e the decision to do so. 1hat allo+s

nor&al e&'loyees, those not nor&ally deviant, to decide to ta$e fro& their or%anization

Hollin%er e


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co&&itted to the or%anization and do not feel that their &ana%ers are co&&itted to the& are

&ore li$ely to steal Hayes, 3>>5;. Another contri0utin% factor is Bo0 dissatisfaction. This theory

states that e&'loyees +ill steal fro& their e&'loyers in order to resolve feelin%s of ine@uity

Hollin%er, 3>8>;.

The final factor is the Bustification of the act, +hen the thief Bustifies his or her actions in

order to neutralize hisher %uilt. These include techni@ues such as denial of res'onsi0ility itDs

not &y fault they leave the dra+ers unloc$ed;, denial of inBury the a&ounts are so s&all, itDs no

0i% deal;, denial of victi& this co&'any &a$es so &uch &oney any+ay;, conde&nation of the

conde&ner the co&'any shouldnDt 0e sur'rised after +hat they have done to &e;, a''eals to

hi%her loyalties " need this &oney to ta$e care of &y &other;, and the &eta'hor of the led%er

e&'loyee feels they have earned the ri%ht to 0e deviant;. As Hollin%er 'oints out, 1hen

su0stantial nu&0ers of the +or$ force have a reservoir of easily invo$ed e


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o''ortunity to steal, and not all are involved in these activities. Finally, Hollin%er says, The

de%ree of 'ersonal autono&y that Bo0 offers, alon% +ith the s'ecific influences of the +or$

%rou', deter&ines an e&'loyeeDs 'ossi0le level of theft Hollin%er 3>8>, '. !6;.G

The last 'art of HayesDs Retail Theft Trian%le is the lo+ 'erce'tion of ris$, i.e., +hether

the thief thin$s he or she +ill %et cau%ht. There are t+o 'arts to this? the first is the li$elihood of

0ein% cau%ht, and the second is the li$ely severity of the conse@uences or 'unish&ent.

The ris$ of %ettin% cau%ht and 'unishedhu&iliated in front of fa&ily and 'eers &ust 0e far

%reater than any 'otential %ain Hayes, 3>>5;. The %ood ne+s is that &ost e&'loyees 0elieve

that they +ill %et cau%ht if they atte&'t to steal fro& their e&'loyers, so they are easily deterred

fro& theft. n the other hand, Hollin%er 0elieves that the s&all %rou' of 'eo'le +ho feel they

+ill not %et cau%ht account for the hi%hest levels of theft. ften, this %rou' $no+s the +orst that

can ha''en is they +ill 0e fired? and for e&'loyees at the lo+er levels of an or%anization, they

+ill si&'ly find +or$ else+here. Therefore, if an e&'loyee isnDt co&&itted to his or%anization

or isnDt fearful of 0ein% cau%ht, there is little the e&'loyer can do to 'revent theft. 2evertheless,

deterrent devices such as in$dye ta%s or electronic devices can 0e i&'le&ented and +ill 0e

discussed later in this 'a'er.

&onsocial Approach

Accordin% to *reen0er% there are t+o nonsocial a''roaches? the first is the security

a''roach, +hich is 0ased on the assu&'tion 'eo'le steal 0ecause they have the 'hysical


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o''ortunity to do so. The second a''roach is the one &ore su''orted 0y cri&inolo%ists, +hich

creates a 'rofile of individuals +ho are &ore li$ely to steal 0ased on individual differences.

E&'loyers can ad&inister honesty tests and situational intervie+s in order to 'rofile individuals

+ho &ay 0e &ore li$ely to steal. Cuch of the a0ovediscussed Theft Trian%leG has

enco&'assed the nonsocial a''roaches to e&'loyee theft, &ostly the security a''roach. A &ore

recent develo'&ent has 0een that of the social deter&inants of theft, +hich states that e&'loyee

theft is a 0ehavior that is carefully re%ulated 0y or%anizational nor&s and +or$ %rou' nor&s and

that stealin% is an effective +ay of su''ortin% these nor&s *reen0ur%, 3>>6;.

Social Approach

*reen0er% 3>>6; states that e&'loyee theft can actually 0e thou%ht of as a 'rosocial

0ehavior that 'ro&otes an or%anizationDs +or$ nor&s. He has cate%orized the &otives into four

co&'onents 0ased on the actorDs intention 'rosocial or antisocial; and the tar%et e&'loyer or

co+or$ers;. He has created an acrony& for #TEAL #u''ort, Th+art, Even the score, and

A''rovaL;.

The A''rovaL &otive occurs +hen the su'ervisor condones theft? therefore e&'loyees

steal to adhere to su'ervisory nor&s. This +ould 0e 'rosocial 0ehavior tar%etin% the e&'loyer.

E&'loyers encoura%e e&'loyee theft +hen they en%a%e in it the&selves, 0ut *reen0er% also

su%%ests that su'ervisors su''ort theft as a le%iti&ate &echanis& of 0ehavior control. To


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illustrate, he e


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e64, doc$+or$ers that resisted %rou' control +ere 'unishedG to such an e


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than confrontin% the %rou'.

'ow Employees Steal

"t is i&'ortant to $no+ the len%ths to +hich e&'loyees +ill %o throu%h to steal.

E&'loyees are often cunnin% in their &ethods of theft. "n retail, e&'loyees can steal cash or

&erchandise ti&e and infor&ation are other o'tions 0ut +onDt 0e discussed;. First, cash theft

can either 0e visi0le or invisi0le. 7isi0le cash theft can occur in the office, +here e&'loyees &ay

have access to a safe or 'ic$u' counts, or at the 'oint of sale. 1hen e&'loyees steal fro& the

re%ister, they often &a$e no atte&'t to conceal the cri&e and ho'e they +ill 0e only one of &any

sus'ects since &any cler$s +or$ the re%ister Hayes, 3>>5;. "nvisi0le cash theft is &ore

deceivin%, e&'loyees &ay fail to record a sale, underrin% the a&ount of the &erchandise, or

refund fraudulent 'urchases. They &ay also void a transaction after the custo&er has left and

ta$e the cash. #o&eti&es they overchar%e custo&ers so they can steal the difference or cash 0ad

chec$s fro& an acco&'lice. Perha's the &ost creative are e&'loyees +ho 0uy &erchandise +ith

the e&'loyee discount and then return the &erchandise at another store for full value.

)eyond cash theft, &erchandise theft has evolved into an inventive and s$illful 'ractice

a&on% resourceful e&'loyees. These store level &ethods of theft +ere ta$en fro& Hayes, 3>>5.

E&'loyees can 'ass &erchandise across the counter to friends or acco&'lices, +ho &ay loo$

li$e an ordinary custo&ers, this is $no+n as s+eetheartin%G and is the &ost 'revalent for& of


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e&'loyee theft. -oncealin% &erchandise and stealthily re&ovin% it durin% 0rea$s is a co&&on

'ro0le&, as is 'uttin% &erchandise in the trash or other concealed containers for later theft.

#ales'eo'le &ay also have access to delivery vehicles or +arehouses +here they can directly

steal the &erchandise. "t is often co&&on for e&'loyees to +ear un'aid &erchandise ri%ht out of

the store.. E&'loyees &ay da&a%eG &erchandise to Bustify a 'rice &ar$do+n and later 'urchase

the da&a%edG ite&. Hayes also classifies theft as %ivin% e&'loyee discounts to unauthorized

fa&ily or friends, &a$in% lon% distance 'hone calls, and shortin% custo&ers s&all a&ounts of

chan%e.

The other ty'es of e&'loyee theft include e&0ezzle&ent and &iscellaneous a0uses.

Hayes classifies e&0ezzle&ent into four cate%ories. )an$ de'osit rollin% includes stealin% all or

'art of the dayDs de'osits and re'lacin% the stolen cash +ith future de'osits. 2e


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can issue fictitious 'ayroll chec$s, steal confidential co&'any data, and destroy lists of inventory

to cover theft activities.

-urrently, the use of ne+ technolo%y in the retail industry and %reater $no+led%e at

youn%er e&'loyees has led to ne+ ty'es of theft. Accordin% to the article #ho'lifters #tudies

#ay Iee' an Eye on 1or$ersG, %ift card fraud has ta$en the retail industry 0y stor&. )a&field

says, To e&'loyees, this is li$e currency. "tDs al&ost as %ood as the U.#. dollar.G The easiest

+ay for e&'loyees to steal is to %ive custo&ers a 0lan$ %ift card and ta$e the loadedG one for

the&selves. Also, e&'loyees often &ana%e to falsely refund &erchandise, and then electronically

'ut that a&ount onto a %ift card. A !4 yearold e&'loyee fro& #ears &ana%ed to divert 95,444

onto %ift cards and then activate the&. Another cashier +rote do+n custo&ersD credit card

nu&0ers and fraudulently filled %ift cards, stealin% &ore that 935,444 *reenhouse, !44>;.

Loss'revention concernin% %ift cards is difficult. For one, it is very hard to trac$ a %ift

card, &uch harder that a credit card. 2o identification is needed, 'lus the online &ar$et'lace has

created an outlet for stolen %ift cards. #tolen cards can 0e sold in 0ul$, returnin% a0out 84 cents

on the dollar, &uch hi%her than stolen &erchandise. e)ay has finally li&ited sellin% cards over

944 to one 'er +ee$. Althou%h retail 'rofessionals have refused to discuss this ty'e of theft, it

has 0eco&e one of the 0i%%est co&'onents of or%anized retail cri&e *reenhouse, !44>;.

III. $inancial Costs and Social Implications

Cost to the Consumer


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Cost of the costs of retail theft are ulti&ately to the consu&er. 0viously, &erchants

raise 'rices to cover the cost of doin% 0usiness, +hich increases +ith e&'loyee theft includin%

cost of &erchandise and cost of security;. Accordin% to a study conducted 0y the University of

Florida, the avera%e fa&ily 'ays an e


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of re'lace&ent &erchandise. E&'loyees tend to steal the &ost desira0le and ne+ &erchandise,

resultin% in a lac$ of selection for custo&ers. "n the co&'etitive retail industry, &issin%

inventory leads to loss of sales and overall custo&er dissatisfaction.

Social Costs

ther costs include increasin% insurance costs and 0usiness failures. The U.#. -ha&0er

of -o&&erce 3>6(; esti&ates that a''ro;. 2ot

to 0e overloo$ed, e&'loyee theft has a social i&'act on the retail industry as +ell. ishonest

+or$ers often distrust each other, +hich can lead to ne%ative social relationshi's in the

+or$'lace. As +or$'lace &orale dissolves, custo&ers &ay find e&'loyees less hel'ful and

e&'loyers &ay find e&'loyees shir$in% on Bo0 res'onsi0ilities. This ne%ative e&'loyee

at&os'here can lead to other counter'roductive 0ehaviors in the +or$'lace such as a0senteeis&,

dru% use, and slo''y +or$&anshi'.

I(. )reventin Employee Theft

"t is i&'ortant to reco%nize e&'loyee theft as a &ana%e&ent 'ro0le&, not only a cri&e

'ro0le& Hollin%er, 3>8>;. #ince e&'loyee theft is 'art of 'ro'erty deviance, Hollin%er clai&s

%ood &ana%e&ent techni@ue, not necessarily &ore security e@ui'&ent, is the route to lo+er

levels of theft. This is con%ruent +ith the fact that not one security device can deter a 'erson +ho

is deter&ined to steal. verall, the &ethod of 'revention de'ends on the vie+ the individual


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0usiness ta$es on theft.

&onsocial Approach to Theft )revention

As 'reviously stated, nonsocial orientations are the individual differences and security

orientations. The +ays in +hich co&'anies 'revent and ac$no+led%e e&'loyee theft de'ends on

+hich orientation they su''ort. The "ndividual ifferences rientation descri0es theft 'rone

e&'loyees as 0ad a''lesG. -ertain de&o%ra'hic and individual characteristics account for these

differences in e&'loyees, such as econo&ic 'ressures. "n this 'ers'ective, the solution lies in

selection 'rocedures that carefully +eed out 'otentially 'ro0le&atic e&'loyees 0efore they are

hiredG Iid+ell and Cartin !44, '. !35;. Accordin% to Hayes, there are ei%ht 'ree&'loy&ent

screenin% &ethods to cur0 the nu&0er of 0ad a''lesG. These include the e&'loy&ent

a''lication screenin%, 'ersonal and 'rofessional reference chec$s, as +ell as e&'loy&ent and

education verification. "nte%rity "ntervie+s are also used to see ho+ a 'otential e&'loyee reacts

to an unethical situation. A very co&&on tool is the +ritten honesty or a'titude testsurvey.

These tests rely on e&'irical research to hel' 'redict the e&'loyeeDs future 0ehaviorhonesty.

)ac$%round chec$s can also tell a lot a0out an e&'loyee? focusin% on drivin% record, +or$ersD

co&'ensation clai&s, credit history, and cri&inal convictions. e'endin% on co&'any 'olicy,

dru% screenin%s can 0e 'o'ular in the United #tates? +hile in other countries, hand+ritin%

analysis is used as 'rescreenin% &easure for honesty. To%ether, these &easures can hel' 'revent


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hirin% unruly e&'loyees, 0ut it is i&'ossi0le to co&'letely rule out all deviant +or$ers.

The &ost +idely su''orted vie+ 0y the retail industry is the #ecurity rientation.

)asically, if e&'loyees have the o''ortunity to steal, +hich &ost do in the retail industry, they

+ill steal 0ecause they can. The solution lies in reducin% or re&ovin% such o''ortunities 0y +ay

of accounta0ility, &onitorin%, and surveillance &echanis&sG Iid+ell and Cartin !44, '. !3!;.

This vie+ 'rovides &any different o''ortunities for 'revention. The first is 'revention 0y

'eo'le. Cost retail co&'anies have a irector of Loss -ontrol +ho +or$s in the security

de'art&ent, &ana%es loss control functions, and re'orts to the -E. ther staff includes honesty

sho''ers, +hich, accordin% to Hayes, 5= of retailers use. Plainclothes detectives, unifor&ed

%uards, and fittin% roo& attendants also hel' 'revent e&'loyee theft. Accordin% to r. Richard

Hollin%er, illardDs de'art&ent store treats e&'loyee theft as a cri&e 'ro0le&, stationin% ar&ed

offduty 'olicy officers at e


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criteria that deter&ine +hen an e&'loyee needs to 0e investi%ated and detained for theft. These

controls are essential in for%oin% la+suits fro& falsely accused e&'loyees.

Li$e+ise, loss control can 0e%in 0efore the retail store has even 0een 0uilt. -areful

'lannin% of the site and environ&ental desi%n of the store 'lay an inte%ral role in 'reventin%

e&'loyee theft. 1hen the site is 0ein% selected, the de&o%ra'hics and visi0ility of the location

can %ive the retailer an idea of 'ossi0le cri&e in the area. The rente


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0arriers consist of +alls, cash re%isters, fi


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are ta%%ed. Also, in order for the syste& to re&ain effective over ti&e, all alar&s should 0e

res'onded to in a ti&ely &anner and ne+ly ac@uired &erchandise should 0e ta%%ed i&&ediately.

verall, these ta%s are used to $ee' e&'loyees and custo&ers fro& stealin% in the first 'lace

rather than to 0e used for detention after a theft.

Core fre@uently, P# ter&inals are 0ein% used to detect irre%ularities in sales, such as

voids and shorta%es, and then re'ort these e


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of s'ecific authorized e&'loyees. "f you can esta0lish sufficient internal controls, you can

si%nificantly reduce the o''ortunities for e&'loyees to steal. The esta0lish&ent of such controls,

ho+ever, is only half the 0attle? you &ust also i&'le&ent and enforce the& consistentlyG

Ii&ieci$ and Tho&as, !44/;.

Social Approach to Theft )revention

2onsocial &ethods are co&&only i&'le&ented? ho+ever, situational and 'ersonal

factors are not solely res'onsi0le for theft. )y attri0utin% e&'loyee theft to various internal

li&itations of e&'loyees, it is too easy to overloo$ the i&'ortant social dyna&ics that contri0ute

to the 'ro0le&G Iid+ell and Cartin !44, '. !3(;. As &entioned earlier, the #TEAL &otive

re'resents the social deter&inant often res'onsi0le for e&'loyee theft. First, in order to 'revent

+or$ %rou' nor&s fro& for&in%, +hich often develo' and 'er'etuate &ethods of theft,

*reen0er% su%%ests rotatin% %rou' &e&0ershi'. "f &e&0ershi' is unsta0le, e&'loyees +ill have

a difficult ti&e esta0lishin% nor&s. Another 0enefit is that e&'loyees have to re&ain alert to do

their Bo0 correctly. Ho+ever, so&eti&es it &ay 0e unrealistic to continuously reassi%n %rou's, as

'roductivity can suffer and e&'loyees can o''ose these chan%es.

2e


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theft, they &ay thin$ t+ice 0efore stealin%. The social 'revention of e&'loyee theft involves

convincin% e&'loyees that stealin% fro& the co&'any is a%ainst their o+n 0est interest

E&'loyees &ust 0e hel'ed to reco%nize the 'ersonal 0enefits derived 0y 'rotectin% the 'ro'erty

and assets of their e&'loyersG Hollin%er 3>8>, '.(4;. "t see&s to +or$ 0est +hen su'ervisors

'u0licly 'ost infor&ation and %ra'hs to sho+ the costs and rates of e&'loyee theft in their

current de'art&ent. The idea is that 0y this &easure, e&'loyees &ay co&e to understand the

cu&ulative effects of their 0ehavior on the co&'any ne reason that this 'ractice &ay +or$ is

si&'ly that is 'u0licly conde&ns theftG *iacalone and *reen0er% 3>>>, '. 343;.

Additionally, the &ost effective a''roach for reducin% e&'loyee theft and sho'liftin% is

to create a trustin%, su''ortive +or$ environ&entG Levy and 1eitz !446, '.4;. #i&'ly

treatin% e&'loyees +ith di%nity and res'ect or inter'ersonal treat&ent not only reduces the need

for e&'loyees to even the scoreG 0ut also creates a nonadversarial relationshi'. "tDs &ore

difficult to steal fro& a friend than fro& so&eone +ho doesnDt care a0out youG *iacalone and

*reen0er% 3>>6, '. 345;. Another study fro& *reen0er% su%%ests that 'ro&otin% or%anizational

Bustice +ill also di&inish e&'loyee theft. *reen0er% tested this theory 0y conductin% an

intervention a&on% three discount stores in the sa&e chain. These stores had hi%h levels of

shrin$a%e fro& e&'loyeeonly areas. "n one store, &ana%ers received inter'ersonal Bustice

trainin%? ho+ever, no &ention of reducin% e&'loyee theft +as &ade. "n the second store,


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&ana%ers received trainin% unrelated to inter'ersonal or%anizational Bustice. The &ana%ers in

the third store, the control, received no trainin% at all. The study found that the e&'loyees in the

"JT %rou' had i&'roved attitudes and theft rate had dro''ed fro& 8= to (=. 2either of the

controls had any chan%e in e&'loyee theft rates. "t is re&ar$a0le that theft rates dro''ed even

thou%h none of the trainin% +as a0out reducin% e&'loyee theft, instead the trainin% focused on

fairness and 'ersonal Bustice.

Finally, cor'orate hotlines have 0een 'roven to hel' create or%anizational Bustice and

fairness a&on% e&'loyees. E&'loyees can call s'ecial 'hone nu&0ers and co&'lain a0out 'ay

or other cor'orate 'olicies they &ay disa%ree +ith. ften, so&eone +ill 0e a0le to hel' clarify a

'ay 'olicy or Bust listen to their concerns. This is effective in 'art 0ecause the infor&ation itself

that is i&'arted &ay shed ne+ li%ht on the fairness of the or%anizationDs 'ay 'rocedures.

Li$e+ise, it also &ay 0e effective si&'ly 0ecause 0y introducin% a hotline, an or%anization is

&a$in% a state&ent a0out itself as a fair co&'any, one that cares enou%h a0out its e&'loyees to

&a$e such a &echanis& availa0leG *iacalo ne and *reen0er% 3>>6, '. 34!;. These hotlines

can 0e very cost effective and hel' o'en co&&unication 0et+een e&'loyees and e&'loyers.

(. *ishonest Employees

Althou%h a retailer &ay use all 'recautionary &easure to 'revent theft, it is still li$ely

that e&'loyee thieves +ill 0e lur$in%. ecidin% ho+ to handle these e&'loyees is a difficult


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decision. Each retailer needs to have a set of 'olicies and 'rocedures in 'lace to res'ond to actual

or 'ro0a0le theft. "f a co&'any is sus'icious a0out an e&'loyee, it is i&'ortant to conduct a

thorou%h investi%ation 0efore 'rosecutin% the e&'loyee. #tore &ana%ers should not either i%nore

the 'ro0le& or fire the e&'loyee +ithout thorou%h analysis. These investi%ations are i&'ortant,

as they 'revent lia0ility and 'rotect the e&'loyeee&'loyer relationshi'.

Accordin% to Hayes 3>>5;, the investi%ation should 0e conducted 0y 'ersonnel in loss

'revention, hu&an resources, and store o'erations. The 'lan and &eetin% should 0e docu&ented

in +ritin% before any s'ecific surveillance ta$es 'lace. The hu&an resource &ana%er advises

'ro'er e&'loyee relations, le%al environ&ent, and fair treat&ent for the e&'loyee. "f an

e&'loyee is deter&ined to 0e %uiltyG heshe should 0e referred the 'olice and sent ho&e until

'ro'erly ter&inated or investi%ated 0y the store &ana%er. Cean+hile, the loss 'revention

&ana%er should docu&ent surveillance and 'ro'erly destroy the &aterial +hen the investi%ation

co&es to an end. "t is necessary to res'ect the 'rivacy of the e&'loyee. For e


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secret? they &ay 0e e&0arrassed 0y the situation, +ant to 'revent slander or lia0ility, or thin$ it

indicates a 'oor loss control de'art&ent. Ho+ever, Hollin%er e


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or RF" technolo%y. RF" allo+s the retailer to trac$ the ite& fro& cradle to %rave, throu%h the

su''lier, stora%e center, distri0ution 'rocess, and then the stores Poirier and Cc-ollu&, !44/;.

RF" is si&ilar to the UP- 0arcode used, e


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not the Bust the ones en%a%ed in deviance. The &essa%e is clear: e&'loyees are not trustedG

1ec$ert !44, '. 335;. E&'loyees +ho donDt feel trusted are &ore li$ely to leave an

or%anization and also less li$ely to re'ort e&'loyee theft.


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$inal Thouhts

The 2ational Retail #ecurity #urvey !44;re'orted shrin$a%e of 956.(

0illion annual loss to retailers? a0out (6= of this loss +as due to e&'loyee

theft. That e@uates to a0out 936./ 0illion fro& e&'loyee theft. These costs

tric$le do+n to consu&ers and even cause so&e retailers to %o out of 0usiness.

"n order to hel' 'revent this ty'e of shrin$a%e, e&'loyers need to 0e a+are of

the reasons e&'loyees steal, as the &aBority do not steal for econo&ic reasons.

#o&e researchers vie+ e&'loyee theft as a result of individual differences

that cause so&e e&'loyees to 0e 'rone to theft. thers vie+ theft as a result of

i&'ro'erly securin% &erchandise. "t is &ost +idely a%reed u'on that

e&'loyees see& to steal to resolve feelin%s of ine@uity or to adhere to social

nor&s. #econdly, it is essential to see ho+ e&'loyees are 'hysically stealin%

the &erchandise. This +ill allo+ the loss 'revention de'art&ent to correctly

secure &erchandise and 'rosecute deviant e&'loyees.


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"n 'reventin% e&'loyee theft it is i&'ortant to understand that the nonsocial

and social a''roaches can coe Jan !434.

Mhtt':+++.nyti&es.co&!44>3!540usiness54theft.ht&lNrO5e&cOeta3Q.

Hayes, Read. E&'loyee Theft -ontrol. rlando: Prevention Press, "2-., 3>>5. Print.

Hollin%er, Richard. ishonesty in the 1or$'lace: A Cana%ers *uide to Preventin% E&'loyee

Theft. Par$ Rid%e, "llinois: London House Press, 3>8>. Print.

Hollin%er, Richard -., and ean A. a0ney. 3>> 2ational Retail #ecurity #urvey. *ainesville,

Fl: University of Florida, 3>>. Print.

Iid+ell, Roland, and -hristo'her Cartin. Cana%in% or%anizational deviance. #a%e Pu0lications,

"nc, !44. Print.

Ii&ieci$, Rudol'h -., and -hris Tho&as. Loss Prevention in the Retail )usiness. Ho0o$en,


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2e+ Jersey: John 1iley #ons, "2-. , !44/. 3543(4. Print.

Levy, Cichael, and )arton 1eitz. Retailin% &ana%e&ent. /th ed. 2e+ or$, 2: "r+in

Professional Pu0, !446. Print.

Poirier, -harles, and uncan Cc-ollu&. RF" strate%ic i&'le&entation and R". J. Ross

Pu0lishin%, !44/. 3(835. Print.

KRecession contri0utes to Bu&' in retail shrin$a%e.K -hain #tore A%e 8.3! !44>;: 3/. *eneral

neFile. 1e0. 6 Jan. !434. Mhtt':find.%ale%rou'.co&.l'.hscl.ufl.edu%t

employee theft in retail final-1

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