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Who’s Minding the Store?

By January 9, 2018 No Comments

An old saying warns, “Don’t bite the hand that feeds you!” However, according to the United States Chamber of Commerce 75% of employees do exactly that – they steal from their employers and they do so repeatedly.

Here are just a few cases that recently made the news:

The University of Florida fired a housing official arrested on suspicion of stealing more than $180,000. The accused was charged with using his university credit card to buy thousands of dollars’ worth of personal household items, internet services, cell phones, and more.

Two Winn-Dixie employees were arrested in Naples after deputies said they stole more than $20,000 from the grocery store by fraudulently scanning coupons and taking the money from the cash register.

The Florida State University Credit Union fired a long time employee after he allegedly embezzled $825,000 over a three-year period. The employee had worked 11 years for the credit union.

The penalties sought by prosecutors for employee theft crimes could be harsher than conventional theft offenses due to the following:

  • the major economic problems thieves cause when occupying positions of trust
  • employers with some influence may push the case in order to send a zero tolerance message
  • employee theft cases usually involve larger losses due to the employee’s easy access to money and property

It is not uncommon for Florida prosecutors to seek significant jail or prison time for even first-time offenders, so with so much at stake, why do employees steal?

According to a concept called the “Theft Triangle” theft is likely when three elements are present:

  • Opportunity
  • Motive
  • Low Risk of Being Caught

Opportunity – People steal because they can! For example,

  • Slip the cash from the register into their bag, or quote a larger price to a customer, then pocket the difference.
  • Hide merchandise in the store, then walk out with it at the end of the shift.
  • Take supplies from the workplace home for personal use.
  • Falsify records or make claims for work expense reimbursements that are not genuine claims.
  • Use company credit card for personal purchases.
  • Report time they did not work as work hours, or surf the internet or take care of personal business instead of working.
  • Use information from the company to benefit themselves.

Motives:

  • Need – medical or legal crisis, addictions
  • Entitlement – employee feels he/she is overworked, paid too little, or the job is beneath their skills
  • Tell themselves they are borrowing and tell themselves they will pay it back
  • For the fun of it – they don’t need the money but do it for the thrill

Low Risk of Getting Caught:

  • Most employers don’t suspect employees of stealing
  • Preventative measures are not put into place
  • Employers should not expect honest employees to report anything (unless it is anonymous)
  • The majority of those stealing are in close relationship with their boss and are least suspected

There are plenty of ways to stop employee theft. The first step is to become aware that it can happen in any business and the thief can be the most trusted employee on the staff. Next, break the Theft Triangle by making it difficult to steal through the use of technology and putting check and balances procedures firmly in place. Make sure that pay is competitive and on the higher side the scale, and personally keep tabs on employee morale. A 2012 study published in the Journal of Accounting Research found that better-paid employees are less likely to steal. Other steps include running a criminal background check as part of the hiring process, check references, and when the position is a financial position, include a credit check.

Employers really want to trust their employees, but they should remain vigilant anyway, in order catch the hand before it sneaks into the proverbial cookie jar.