Growing internal employee theft crisis creates havoc for major retailers

Annual retail theft survey shows marked increase in shoplifting and employee theft during 2012

While Doyle and his group agree with some of their retailers as to the root cause of increasing insider theft, they believe there are several key stumbling blocks facing harried LP staffs who hope to curtail this threat. Some of the most crucial issues include ineffective pre-employment screening or total lack of background checks, lower management staffing that leads to less employee supervision, an open and easy market place for selling stolen goods, and finally, a decline in personal honesty.

“The first step to controlling internal theft starts at the point-of-hire; do not hire the 'bad apple,'" says Doyle. “Some retailers, in an effort to reduce their costs, have lowered their pre-screening requirements and are now hiring more ‘questionable’ employees. Anytime statistics show one out of every 40 employees is actually caught stealing by their employer, there has to be some type of breakdown in the pre-employment screening process.”

Doyle admits that there are also so many more avenues for employees to quickly and easily sell stolen merchandise. “This easy access to a much larger audience for stolen goods has resulted in more theft by those dishonest employees looking for quick cash.”

And Doyle is not shy about pointing the finger at society’s current ills having a cause and effect.

“There are more dishonest people throughout the nation today, and this decline in personal honesty is taking its toll. Almost daily we hear of business, government, law enforcement, celebrities, sports figures, and even church leaders being caught up in questionable activities,” he chides. “Such events make it easier for borderline employees to steal and to rationalize their theft acts. In addition, the part-time workforce is growing, and it is not uncommon to find that many such workers have less loyalty to their employer, and are more apt to take advantage of opportune circumstances.”

“When it comes to employee theft deterrents, a thorough pre-employment screening process including, reference checks, honesty testing, SSN trace/verification, criminal background checks, and drug testing is most important. Money spent up-front in the screening process to identify quality employees will result in savings from reduced turnover and losses,” says Doyle.

He also stresses that companies must have an adequate system of internal controls, and audit to ensure consistent compliance to company policies and procedures. Loss prevention training and awareness programs, including a reward program for employees who report dishonest activities, are also important.

“We have found creating and maintaining a climate of honesty within the company is of utmost importance in controlling employee theft. Employees must feel valued, appreciated, and there should be no double standards among employees,” Doyle concludes. “Employees must realize through word and deed that honest and ethical behavior starts at the top and is expected of all employees.”