AS UNEMPLOYMENT DROPS, EMPLOYEE THEFT ON RISE


By Noelle KNOX
The New York Times

Kelly Green and Karri Carter spent a night late last month in McLean County Jail in Bloomington, Ill. Both were salesclerks from the nearby Wal-Mart, arrested in the store and charged with ringing up sales to phantom customers, recording bogus returns and then pocketing cash refunds of more than $300.

Green, 31, and Carter, 27, who are scheduled to he arraigned this week, declined to discuss the case; Bryan Holmberg, a spokesman for Wal-Mart Stores would say only that "this kind of incident is very rare." But if they are convicted, the women will become another statistic in a rising tide of employee theft in retail stores.

One of the few disadvantages of a robust economy, human resource administrators say, is its effect on hiring practices, especially among retailers. The nation's unemployment rate has held at well below 5 percent this year.

The shrinking labor pool, consultants say, gives employers fewer hiring choices, exacerbating other changes in employment patterns that have contributed to worker theft in recent years.

"The employment base is low, and retailers are not getting a lot of people who are extremely qualified," said David Johnston, director of training and research for LP Innovations, the loss-prevention subsidiary of J. Baker Inc., a Canton, Mass., retailer that owns the Casual Male Big and Tall clothing chain. "If the company doesn't have an effective screening program, they're going to get whoever comes in off the street."
Retailers reported a surge in employee theft last year, according to the latest National Retail Security Survey by the University of Florida. The companies in the survey attributed 47 percent of all lost cash and merchandise to the light fingers of their workers, up from 41 percent in 1996.

If the survey results are accurate for the industry as a whole, workers stole $13.3 billion of the $28.1 billion in cash and merchandise that retailers lost last year. By comparison, shoplifting -which gets far more publicity as a source of retail crime - accounted for only $9.6 billion, or 34 percent. The remainder was lost to vendor fraud and administrative error.

To deal with theft problems, more retailers are running employee background checks through organizations like; the United States Mutual Association, a clearinghouse on theft and fraud cases.

Robert Ralicki, vice president of marketing for United States Mutual which counts Sears, Roebuck and Gap Inc. among its subscribing companies~ said it had 2.5 million cases of employee theft in its database. That number, be said, should double within two years as more retailers contribute information.

"Retailers have limited resources they can devote to background checks for entry-level personnel," he said, "but they' want to know if John or Jane Doe has a track record of dishonesty before they give them access to their cash and merchandise".  According to the University of Florida study, an employee who steals will take an average of $1,058 in cash or merchandise in a year, while a shoplifter will walk away with an average of $212.

High turnover, another abettor to theft, also dogs the industry, because an entry-level retail job no longer is seen as a first step on a career path. And working conditions at retail jobs also can lead to a discontented work force.

Steve Kasserman, a loss-prevention officer at the Bi-Mart Corp., a discount chain based in Eugene, Ore., has his own explanation for this kind of thinking. "If you pay someone $6.50 an hour to stand on their feet," he said, and to take whatever insults the public dishes out for seven to nine hours a day, "they get mad, and eventually they'll take it out by stealing."

Waco Tribune Herald
Sunday September 13, 1998

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