Retail Observer

RETAILOBSERVER.COM SEPTEMBER 2022 64 T he scope of employee theft cannot be overstated. Whether it's time theft, asset misappropriation or actual fraud, understanding the impact of the problem will help motivate you to take proactive steps to deter theft. This article is the first in a three-part series that will help you understand the scope of the issue and identify possible solutions. THE SCOPE OF THE PROBLEM • 75% of employees have admitted to stealing from their employer at least once. (Statistic Brain) • 37.5% of employees have stolen at least twice from their employer. (Statistic Brain) • 95% of all businesses suffer from theft in the workplace. (California Restaurant Association) Every year, businesses lose millions to employee theft. The financial losses can cause small businesses to shutter, and can, in some cases, result in bankruptcy. • Employee theft is responsible for 42.7% of total inventory loss in U.S. shops. (Statistic Brain) • 33% of all business bankruptcies in the U.S. are the result of employee theft. This equals $50 billion annually. (Statistic Brain) • 7% of annual revenues are lost to theft and fraud. (Statistic Brain) The financial losses from employee theft can be devastating not only to the financial side of the business – they can erode overall employee morale, and they're obviously a source of great frustration for the owners. Smaller companies with fewer than 100 employees are at greater risk of employee theft. Therefore, it's critical to spend time and money to protect your assets, your reputation and your customer base. And because this is a national issue that crosses all lines of business, we need to be on the alert for signs that we may be harboring someone dishonest within our ranks. For the independent appliance service industry, a single dishonest technician can cost you thousands within just a few months, by embezzling your money and poaching your customers. • 68% of all employee theft cases came from organizations with less than 100 employees. (Hiscox) • 70% of check fraud theft occurred at smaller companies of 100 or fewer employees. (Hiscox) • 21% of tech employees steal from work. (GetVoip) • 28% of retail inventory losses are due to employee theft. (Fortune) Research shows that the employees most likely to commit occupational fraud are those you'd never suspect, and that only 4% of the perpetrators have a prior fraud conviction. However, there are some commonalities among the perpetrators that a diligent owner or manager can look out for. • The average age of a perpetrator is 48. (Hiscox) • 59.1% of men and 40.9% of women commit employee theft. (Statistic Brain) • Losses caused by men were 72% larger than losses caused by women in 2020. (Association of Certified Fraud Examiners) As we progress through this series on employee theft, we'll look at real cases and offer tips for how you can more effectively monitor your business and reduce your financial losses. The first step will be to discuss the phenomenon at the PSA Convention in Orlando this month. I hope you'll bring your thoughts and experiences and share them, to help protect our industry from the unscrupulous and deceitful employees we unknowingly hire. Tip #1: Always do a thorough background check before hiring. The inexpensive background check might not always reveal former prosecutions, given today's backlog of cases, liberal sentencing, and the high threshold for classifying felonies. So the background check may not reveal low-level crimes. S E R V I C E D E P A R T M E N T RO EMPLOYEE THEFT Ralph Wolff, Industry Relations, PSA Certified Service Center www.certifiedservicecenter.org

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