A New Employee Theft Study

Employee theft is one of the most rampant and costly issues faced by today’s public and private business owners.  Recent research estimates that business crime costs the U.S. approximately $186 billion annually.  Realize that corporations pass that cost to the consumer and this gets personal in a hurry.  What drives employee theft?

Historically, crime has been perceived as an activity of the nonworking or lower-class members of society.  Surprisingly, some do not consider illegal actions that occur during the course of business to be crimes at all.  Add to that startling revelation the fact that most individuals spend the majority of their adult lives at their workplace and you have a recipe for disaster. 

It would be nice if we could have answers to the following questions:

  • Who is committing theft?
  • What are the characteristics of store locations that lead to loss?
  • How much loss is occurring on an annual basis?
  • What is the cost of internal theft?
  • What prevention techniques are being used in an attempt to control and prevent loss?
  • What are the motivations to commit internal theft?

Dana N. Baxter endeavored to answer these questions in a recent doctoral thesis entitled Who Is Taking the Shirt Off Your Back? A Multi-Method Analysis of Theft at a Specialty Retailer.  I discovered this work through the pages of the September – October 2014 issue of LP Loss Prevention Magazine.

It was expected that employee turnover and managerial turnover would have a great impact on employee theft, but this was not found to be true.  In fact, the largest losses were found in those stores with the greatest number of managers.  Clearly, managers do not cause theft.  This finding would indicate that the highest losses are found in the largest stores. (Duh!)  This was especially true of stores in malls located in urban areas experiencing higher levels of social strain. 

High levels of loss were also noted in “lifestyle centers” located in the wealthier suburban areas.  Many of these stores had more doors making for a faster get away.

Only 20% of the stores had CCTV.  Of the stores that had CCTV, it did not have any significant deterrent effect. 

In examining the demographic characteristics of the dishonest employee, the employee was most likely male, younger and low tenured.

What were the motivators for the thieving behavior?  One typical response was, “I knew I was worth more.” In other words, “You aren’t paying me enough so I am going to take what I deserve.”

Another reason given was that there was a conflict with the management team at the store.  I suppose it was “get even” time.  It was further observed that the perps had a poor work ethic, believed that they were not being compensated fairly, and many of them are bringing large amounts of debt to the workplace.  Some stole for extra fun money, believing they would never get caught.  Older individuals took money for gambling debts, divorce and medical bills.  Other individuals committed theft because they were trying to maintain an image.

POS Plus has security solutions that can help you with your employee theft problem.  We offer SOLUTIONS.