The Bunker Blog

I just read a pretty good article about time theft that got me to thinking. I know that my company does indeed terminate for time theft on the first proven offense, but I have worked for companies in the past that did not. So, I ask the question: ” Is time theft really theft? If so, do you treat it as theft and interview, terminate, etc.? If not, why not? How do you treat it? Is it a disciplinary/corrective issue? 

 photo credit: FABIOLA MEDEIROS- direção de arte

To me, time theft is unquestionably theft, and it absolutely causes a loss to the company when an employee sits around in the employee lounge while “clocked in”. Even worse, I consider it time theft when an employee is supposed to be servicing customers, but is instead nowhere to be found. 

Time theft can be hard to prove, but admissions go a long way, so a few instances on video plus a written statement after a good interview usually do the trick. It’s hard to deny the loss, and if the employee admits to intentionally getting paid for “not working”, then the case seems pretty solid to me. 

Simply put, the employee causes a loss to the company by getting paid for time when they were not working. So, read the article here, and then let’s talk about it. Should these be cases of dishonesty? Or, are they behavioral issues that should be dealt with from a corrective action standpoint?

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In a case in Pineville, NC recently, two subjects entered the store and stole 21 baseball bats. They worked as a team, one subject distracting the employee while the other cut locks off the fixtures and stuffed the bats into a bag. As they started to exit, a member of the store’s management team questioned the pair about the bag. At this point, both men ran into the parking lot and entered a waiting car.
The manager took down the license plate and called police. He gave a full description to the police of both subjects, and the license plate number from the vehicle.
The subjects were not immediately apprehended, but were later apprehended in Virginia by Virginia State Police. They had in their possession the 21 stolen bats at the time they were pulled over and questioned. They also had a set of bolt cutters which they used to cut the locks off the store’s fixtures.
Virginia officials notified the retailer and the Pineville, NC Police Department. Warrants were issued in NC for both subjects.
Then, less than a week prior to the extradition hearing, NC officials refused to proceed with the prosecution, leaving the retailer without their merchandise, or any means to recover their loss. This was done with no warning, no notification, and no explanation.
Virginia Police officials agreed to proceed with the prosecution of the two subjects, but the retailer has to foot the bill to send the manager on a 2-day road trip to testify in an out of state court just to recover their merchandise and get closure to this case.
I’m not sure why this is happening, but it is. I’m being told that many local prosecutors are dropping cases and making deals just to cut the costs involved with prosecuting such cases. I don’t know that this is true for this case, but it would make sense. The county probably doesn’t want to pay for a couple of officers to go on a 2-day road trip to recover these two subjects for a $6,000.00 case, so they leave it to the retailer to deal with in another jurisdiction.
Can you believe this? Anybody want to comment?

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A study released in December, 2008 shows that many companies are seeing an increase in workplace crime, and specifically, theft related crime. Of course, this just serves to further support what we have already been saying all along. Those of us working in the field don’t really need studies to tell us that there has been a definite increase in internal and external theft issues. But, this does give us some more ammunition, in the form of facts, to help combat the problem.

Awareness, training, accountability; these three are still the keys to reducing incidents, and to catching internal theft early. Many companies are increasing their audit cadence this year so that issues can, hopefully, be identified earlier. Inspecting what we expect has always been a key to success in shrink reduction, but it is much more crucial today.

We face an up-hill battle against shrink, and we have to fight a tougher fight with fewer troops this year. Less eyes in the stores means more opportunities for theft.

Employees who feel the pressures of this down economy, including reduced payroll and benefits, are much more likely to steal from their employers. These thefts can range anywhere from simple time theft to multi-thousand dollar embezzlements. Loss Prevention MUST, not only expect this, but get out in front of this issue and be proactive in efforts to discourage disgruntled employees from causing a “bad to worse” scenario for retailers.

As always, comments are welcome

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There sure seems to be a lot of panic going on. Many companies are scaling WAY back, consumers seem to be drastically reducing spending. We in loss prevention face some incredible challenges, if we are still employed. I know that many companies are cutting payroll, cutting anything considered “unnecessary” spending. So, I’d like to ask a simple question: “Is it time to hit the panic button?” 

In other words, are you in crisis mode? If you are in loss prevention, what are you seeing? Are you becoming more concerned with internal theft? Are you seeing an increase in external theft? Are your awareness and protection programs being dropped by the wayside because they cost too much time and money?

I’m not convinced that we are in Crisis as an industry yet, but I can see us getting there soon, if things don’t change. Do you agree? Disagree? Let’s talk about this…

photo credit: kryst£n

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These tough economic times create real challenges for all of us in the loss prevention industry. Many retailers are closing doors, meaning lost jobs, including loss prevention jobs. Those in the industry who are still working are, in most cases, being asked to do more with less.

With retailers looking to cut costs, loss prevention programs can be viewed as non-essential, and therefore be either cut back or altogether cut from the budget. Retailers are looking to save money where ever possible, and loss prevention is in a position to either show real savings through shrink reduction or face cutbacks in many cases.

One would think that the increase in criminal activity against retailers would secure a position for loss prevention professionals at every retailer, but this may not be the case.

SecurityInfoWatch.com posted an article by Mark Doyle of Jack Hayes, Intl today that summarizes the latest Annual Retail Theft Survey. Not surprisingly, the survey found that overall apprehensions were up 10.8% over 2006, and recoveries were up 9.73%. What was surprising was that the average case value was actually slightly down, at -0.33%.

According to a survey conduct by Aberdeen Research back in October 07, 60% of retailers reported shrink of 1.75% or more for that year. And friends, that’s where the real bang for the buck exists. Having an increase in cases is great, and indeed does help to reduce shrink. But if the shrink percent is high, then something is not working.

This same survey also found that retailers see four major challenges when it comes to their shrink reduction strategies. They are listed below in order of importance:

1. Lack of Employee Training On Loss Prevention Procedures
2. High Incidence of Internal Theft
3. Store Location Demographics (Crime Rates, etc.)
4. Organized Retail Crime

You’ll notice that the top challenge or concern is training. If associate awareness is low, shrink will be high. Loss Prevention must go beyond the weekly meetings and become intimately involved in the LP training in stores. That means one on one, personal training of key employees who will pass along the information and help to build a culture of awareness.

Next on the list is Internal Theft. Since 40 – 50% of shrink is attributed to employee theft or fraud, it only makes sense to put the investigative focus in this area. Shoplifters are a problem, but not THE problem in most locations. The biggest issue employers face when it comes to losses is the fact that up to 30% of their employees are stealing from them at any given time.

Store location issues are a tough problem. I recommend regular risk assessments. That means going to the local police department and requesting property crime statistics. For about $10.00, you get a great deal of information that, along with your specific shrink results, will help you customize your strategy for shrink reduction. I also recommend networking with other local Loss Prevention departments and sharing information about habitual offenders, high theft items, etc. Together, this information can really make a difference in how you protect your merchandise.

Finally, retailers are concerned about organized retail crime. There seems to be some debate in loss prevention circles as to just how much of a problem this is. On one hand, there are those who maintain that ORC is a huge contributor to retail shrink, and that the answer is to work with law enforcement to go after the leaders.

On the other hand, there are those who argue that, if proper training, awareness, and protection standards are in place, ORC is a minimal issue because the boosters are being stopped before they can seriously impact shrink.

Both sides make good arguments, and I think it will take some time before we see which approach makes the biggest impact on the problem.

So, loss prevention professionals face tough challenges in tough economic times. My goal here is to share the “big picture” concerns of retailers in general so that LP professionals can manage their workload and focus to make the biggest impact possible on the shrink in their stores, markets, etc.

But we also have to be keenly aware of what our companies’ specific goals, challenges, and concerns are. At the end of the day, it’s about the shrink. If you catch 1000 shoplifters and dishonest employees, but your shrink remains high and unchanged, then the focus needs to be re-assessed.

So, how about it? Do you agree? Disagree? Want to add your own thoughts? Please leave a comment so we can discuss.

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