Internal theft is one of the leading causes of loss in the retail and restaurant industry. While no employer wants to “believe” their employees have stolen from them, it’s hard to ignore that 75 percent of employees have admitted to stealing from their employers at least once. Nevertheless, confrontation can be discomforting, and often that discomfort helps to create misconceptions about employee theft.
Myth 1: Nice Means Honest.
When it comes to employee theft, you often can’t judge a book by its cover. Yet, it’s easy to believe that only “bad” people steal. People who are “nice” tend to be seen in a better light and are more often given the benefit of the doubt than those who are disagreeable or are perceived to have an “attitude.”
In truth, many “nice,” “agreeable,” and “hard-working” employees have been terminated for theft. You may not think a person is “nice” once you know they have stolen, but in advance, “nice” isn’t a factor in the characteristics of those who steal. In order to detect internal theft, it’s important to employ objective measures of evaluation to identify those responsible.
Myth 2: Pay Drives Honesty.
A higher paycheck may seem the answer to deterring dishonesty, which might be true if stealing was solely a factor of “need.” Unfortunately, most internal theft is the result of opportunity and few of the items taken ever fall into the category of “lifesaving.” After all, the news is filled with stories of wealthy, white collar employees who have also engaged in internal theft.
The truth is that the amount of money as person is paid does not determine if they will or won’t steal. The size of a pay check is related to the level of responsibility an individual has in a company. It’s a feeling of commitment and stake in the company that reduces theft. This means that an employee can be paid well, have a number of responsibilities, but without a connection to the company, they may still steal. The converse is also true whereas an underpaid employee with no commitment to the company may also steal. Creating a culture that builds commitment and a shared vision among employees is one of the best ways to prevent loss.
Myth 3: It’s Only Nickels and Dimes.
While most companies recognize that they have some theft, many chalk it up to mostly “nickel and dime” stuff. That’s kind of like being a “little pregnant.”
Internal theft costs U.S. businesses over $50 billion a year. While it’s true that most employees begin small, left unchecked the amount and frequencies of dishonesty will continue to rise. The average employee steals for 16 months—making off with an average of $20,000—before being caught.
Myth 4: Hard Controls Deter Employee Theft.
Hard controls are physical security detection and obstacles, such as cameras, safes, drop boxes, EAS tagging, locks, and alarms, to deter internal theft. While these devices will make theft more difficult and may make the detection of dishonesty easier, they will not stop the determined employee.
There really isn’t a perfect system for the detection or prevention of all forms of theft, as employees have more access and opportunity than we have devices to stop dishonesty. Reliance on these tools alone will not prevent internal theft. Dishonesty prevention requires a holistic approach to loss prevention that includes building the right culture of integrity, policies, inspection, key indicators, and a process of resolution.
Myth 5: It’s the New Guy.
No one wants to suspect, let alone believe, that a long-term, seemingly loyal employee is dishonest. Finding that to be true makes us feel foolish at best and betrayed at worst. It’s much easier to believe that a theft was caused by a new person because we haven’t built a connection to that employee.
It makes sense to suspect the person you know least about, especially if losses only began to occur “after” they became employed. In fact, many longer term employees frame their thefts so it looks like the new person was involved, despite only 7 percent of dishonest employees being in their first year with a company. Rather, the most perpetrators of internal theft are employees who have been with a company for more than five years. To be objective, it’s important to measure your suspect list based on access and opportunity, not tenure.
Loss Prevention Services
Dealing with employee theft can be a disheartening. You want—and should trust—your employees. Unfortunately, however, internal theft is an issue that can only be resolved with a heavy dose of reality and objectivity.
HS Brands’ loss prevention services are designed to take an objective approach to combating employee theft for retailers, restaurants, and franchises. We’ll work with you to build a complete loss prevention program—from audits to program and policy development—to meet your goals and protect your brand.
In addition to loss prevention, HS Brands offers mystery shopping and royalty assurance services to provide holistic assessment and verification of your expectations.
Contact HS Brands today to see how we can resolve and prevent theft in your workplace.
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Raymond Esposito
Director of Business Development & Marketing
HS Brands Global
Raymond Esposito has over 28 years of loss prevention experience, working within the department store, specialty, and grocery segments of retail. He has developed loss prevention programs for over 125 retailers in the U.S., Canada, and the United Kingdom. He holds a bachelor’s degree in psychology from the University of Connecticut and is an expert witness.
