Research: Employee theft costing US businesses $200B a year

According to new research, employee theft is costing U.S. businesses about $200 billion a year, 40 percent of which can be attributed to the practice of sweethearting.

The study, which surveyed 800 service employees and customers in a variety of businesses, found that a majority of respondents (67 percent) had taken part in sweethearting in the past two months and that many employees were motivated by the prospect of receiving better tips and similar deals at the customer's place of business, according to a statement issued by Michigan State University.

"I was surprised by how pervasive this behavior was across a wide range of service industries," said Clay Voorhees, a marketing expert at MSU who co-authored the study with Michael Brady and Michael Brusco of Florida State University. "I fully expected to see this behavior in bars and restaurants, but I was surprised at how prevalent it was in industries like retail, sports and recreation, and even with insurance claims."

Voorhees said that one of the best ways to combat this practice would be through a better screening process for job candidates.

"Our results show that by adding a few screening questions that focus on the potential employee's risk-taking, ethics and need for social acceptance, employers could identify 'bad apples' up front and simply avoid hiring them," he explained. "In the long run, this approach would address the issue."

The study will appear in an upcoming issue of the Journal of Marketing.

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