Retail Employee Theft Leads to Billions in Annual Losses

Author: Ashley Shaw, XpertHR Legal Editor

November 25, 2014

A quick search of retail employee theft statistics for the last few years reveals workplace losses ranging from $1 billion to $50 billion a year. While the variance in this range is huge, one thing that remains statistically constant is a figure in the billions. Retail employers witness a growth in this type of theft during the holiday season as employees' financial pressures increase and temporary employees, who have less to lose if caught, make up a large part of the workforce.

Two recent annual surveys illustrate the prevalence of employee theft. One of the surveys, conducted by the Global Retail Theft Barometer (the Barometer), an organization dedicated to examining trends in retail theft, researches shrinkage trends in 24 countries throughout America, Europe and Asia Pacific. The term shrinkage describes the loss of inventory in a business.

The Barometer's 2013-2014 report suggests that, globally, retailers lost $128.5 billion (US), with 28% of that loss due to employee dishonesty. That equates to around $35.98 billion lost through employee theft alone.

The other survey, the Jack L. Hayes International survey, evaluates shoplifting and employee theft from a recovery point of view. Twenty-three large retailers were surveyed, comprising 23,204 stores across the US with combined earnings from 2013 sales of $669,385,561,011. According to this report, 78,085 dishonest employees were apprehended in 2013. From these apprehensions, $55,144,201 was recovered, which equates to about $706.21 per case. These statistics do not represent any of the other employees who got away with their theft.

Employers should be aware of this growing trend and take steps to eliminate it from their workplaces. Mark R. Doyle, president of Jack L. Hayes International, suggests that stopping both internal and external theft should be a team effort, rather than one left solely to the loss prevention department. It starts with training all workers on what to do when they notice theft, and should include actions such as properly conducting pre-employment screenings within legal confines and increasing employee supervision.