A lot of attention is given to the issue of customers shoplifting from retailers, but significantly less media attention is paid to another type of shoplifting: employees taking money or merchandise from the retailer they work for. Studies suggest that this less well-known type of shoplifting is a particularly big problem for retailers who pay low wages.
There are a lot of different reasons why people might shoplift, ranging from peer pressure to stress to mental illness, but one reason that some retail employees seem to shoplift is because they feel they are not paid enough for the work they do, especially when the retailer they work for is highly profitable. They may rationalize shoplifting as a way to “balance” out low wages or, in some cases, as a means to make ends meet.
Employee Shoplifting by the Numbers
The US Chamber of Commerce recently found that 75% of employees surveyed across industries have admitted to committing some kind of employee theft. In many cases, employees commit relatively minor forms of theft such as taking office supplies home, but in other cases, the theft might involve taking money from a cash register or taking merchandise without ringing it up. Low paid retail workers are most likely to commit this second kind of theft.
Although individual employees might not feel like their shoplifting makes all that big a dent, the combined thefts across the country account for almost 43% of all inventory shrinkage and $15 billion in lost profits. Employee theft accounts for bigger losses than any other type of theft, including customer shoplifting. It’s clear that this has become a major problem, and doling out harsh penalties to the few retail employees who are caught may not be the best way to deter the crime. Instead, retailers should assess their wages and treatment of employees in order to create an environment that is less likely to encourage shoplifting.
Study Shows Higher Wages Reduce Rate of Employee Theft
So how can retailers discourage employee theft? A 2012 study from the University of Illinois suggests that paying higher wages is the most obvious solution. The study looked specifically at data sets from the convenience store industry and found that there is a negative correlation between wages and employee theft; that is, the more employees are paid, the less likely they are to steal merchandise. The study’s authors posit that this is because higher paid workers are more likely to feel generously towards their employer and are less likely to be willing to risk losing their job by committing employee theft.
Although there is a “wage tipping point” when the cost of paying employees more outweighs the cost of employee theft, employers who give their workers a fair raise can cover close to 40% of the cost of the wage boost in the reduction of theft. In addition, higher wages may save employers money by promoting job satisfaction and reducing the rate of employee turnover.
All in all, getting to the root of the problem and preventing employee theft is a better long-term solution than punishing individual employees after the fact. It’s time for profitable retailers who are experiencing significant inventory shrinkage to consider improving their employee treatment and paying attention to the results.
About the Author:
Kimberly Diego is a criminal defense attorney in Denver practicing at The Law Office of Kimberly Diego. She obtained her undergraduate degree from Georgetown University and her law degree at the University of Colorado. She was named one of Super Lawyers’ “Rising Stars of 2012” and “Top 100 Trial Lawyers in Colorado” for 2012 and 2013 by The National Trial Lawyers. Both honors are limited to a small percentage of practicing attorneys in each state. She has also been recognized for her work in domestic violence cases.