Shoplifting Study Warns Retailers About Employees

Retailers looking to cut their theft losses would do well to leave the customers alone and keep a wary eye on their own employees, according to a survey released today.

Employee theft accounts for seven times more revenue loss for retailers than shoplifting, the annual loss-prevention survey by Ernst & Young said.

The survey, “An Ounce of Prevention,” showed retailers reported $2.2 billion in 1989 theft losses, an average of $21 million for the 160 companies responding and an increase of 10% compared to 1988.

“The average recovery per employee apprehended was $1,350, compared to an average of just $196 recovered from each customer taken into custody, even though 93% of those apprehended were customers,” said Gerald Smith, head of the firm’s retail group in Chicago.

Smith said it is not just a “front door, back door” problem as employees learn how to steal both money and merchandise.