« Will women keep the traditional shopping mall experience afloat? | Main | Are blended families becoming the new normal? »

January 04, 2022

Do tough times lead to increased employee pilferage?

Shoplifting and employee pilferage seems to be rising at many retail chains, and experts are pointing at a prime cause: the sputtering economy.

AdShoplifting, employee or supplier fraud, organized retail crime and administrative errors cost the retail industry $119 billion in 2011 or 1.45% of sales.

This global shrink rate is 6.6% worldwide higher than the previous year, according to the Global Retail Theft Barometer, and represents the highest percentage recorded by the survey since it began in 2007.

Since direct theft makes up roughly 80% of shrink, retailers need to step up their vigilance, warns John Fice, COO of LP Innovations, the largest loss prevention solution provider in the United States.

Most loss prevention experts warn that taking a laissez-faire attitude towards even "petty" dishonesty can lead to more damaging actions and behaviours down the road.

Their solution: Institute a whistleblower hotline.

Overwhelmingly, honest employees want to come forward with knowledge of fraud or business abuse, but there are definitely barriers involved.

That's why a successful whistleblower hotline should be staffed with live operators who are trained in interviewing callers, says LP's Keven Griggs.

In addition, these operators must be available 24 hours a day, 7 days a week because callers, fearing retaliation, aren't likely to call the line while at work, during normal business hours.

What would you do? If someone was stealing, would you intervene or blow the whistle on them?

By Gordon Powers, MSN Money







Post a comment


Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...