Retailers Take Aim at Employee Pilferage

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Feb 18, 2002
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Studies show worker theft accounts for 46 percent of losses, posing a greater threat to store owners than shoplifters, reports the LA Times. After years of trying to stem retail losses by watching out for shoppers with sticky fingers, retailers are increasingly aiming their anti-theft weapons at their employees, studies show, and criminologists and retailers confirm. A report released last month by the National Supermarket Research Group, which tracked thefts at supermarkets and convenience stores since 1990, showed the ratio of internal and external fairly constant over the last decade — averaging about 54 percent for employee theft to 24 percent for shoplifting. Donald Horan, director of loss prevention with Gordon Bros. Group, which handles liquidation sales for ailing retailers, said that may be because the grocery industry has not used technology to reduce shoplifting to the same extent as vendors of clothing and hard goods. The grocery study said total losses, as percentage of sales, have remained at plus or minus two percent — small but still the equivalent of billions in lost profits.

Although some shopkeepers swear by the increased use of surveillance equipment, some privacy experts wonder what the move will do to employee morale. “Putting a camera on every register is a real hardship on the employees and it shouldn’t be done unless it’s absolutely necessary,” says Lewis Maltby, president of the National Workrights Institute, a spinoff of the ACLU. Some retailers have opted to address the problem by focusing on who they put behind the cash register. Mal Ransom, vice president of US Search Inc., said he’s seen more interest from retailers who want to use background screening to combat the twin problems of employee theft and high turnover. “Retailers need to increase the bottom line,” he said. “And the fact is that employee turnover and theft costs them money.”

Moderator Comment: How can retailers effectively reduce
shrink due to employee theft?

Electronic security measures have made the livelihood
of shoplifters ever more challenging. It would seem a logical first step in
reducing employee theft would be doing more thorough background checks of prospective
employees before they are hired. [George
Anderson – Moderator
]

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