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The High Emotional Cost of Employee Theft in Retail


Beyond the financial cost and regardless of the size of the theft, employee theft in a retail business can come at a huge cost to the business, those who work in it and the owners.

The impact can be felt for years after employee theft is discovered.

We often find ourselves working with retailers on employee theft situations.  While primarily focused on gathering evidence, our work has been known to involve offering support for retail business owners and their employees in dealing with the knock-on effects of theft.

Often, the person caught stealing from a retail business is one of the most trusted employees. This is where the high emotional cost kicks in. It is not uncommon for them to be a long term employee who has the trust and respect of the business owners.  Often, it has been a relative of the owner or at least someone treated as a relative or a member of the family.

We see the impact of the theft flowing in waves:

  1. Typically, the retail business owners blame themselves for the theft or at the very least for not having discovered it sooner.
  2. What follows is the extraordinary feeling of a breach of trust and violation.  This can lead to a feeling of overwhelming illness.  In some cases, one or more of the business owners have withdrawn from the business – such is the personal hurt and betrayal they feel.
  3. Devastation often kicks in with the owners losing focus on the business, unable to deal with the issues of today.
  4. Depending on the extent of the theft, depression can follow which requires some form of intervention to resolve.

The personal impact on the outlook and confidence of the business owner can be devastating. Unless they are able to accept what has happened and genuinely move on, they could find themselves wallowing in anger, inaction or even depression for long after the crime has been discovered.

The key, from our personal experience, is to accept what has happened, make a decision on how to deal with it and move on … never looking back.

Discovering an employee theft problem is an excellent first step.  The alternative is that it continues unabated.  Discovery stops the theft and that is a great first step. It is important to acknowledge the good news of the discovery regardless of the quantum of theft discovered.

Deciding an action plan is the ideal step two.  Deciding whether to report the crime or agree on an immediate financial settlement with the employee who committed the crime is the best next step.  Only the retail business owner can decide whether reporting the crime is worth it or not.  Sometimes, being paid a reasonable sum by the employee is better for the business and moving on than a protracted police investigation.

Talk with the team.  Listen.  Console.  This is a time for grieving about what happened.  Either gather as a group or one on one. Ensure that everyone has an opportunity to air their feelings.  Business partners especially should take time to do this and explore how they feel.  Do not let this process go on too long.  Ensure that everyone understands that this is the time of grieving and that when it ends, it ends so that the business and those involved can move on.

Focusing on the business is the fourth important step.  Once the employee theft is caught, the action plan re police versus reimbursement resolved, the next focus has to be the business.  Difficult as this is, it is important to move forward rather than to stand still and wonder what might have been or worry about the betrayal one feels.  Look at business practices and modify these so that theft is harder to perpetrate, implement processes which disrupt the business and make theft easier to detect.

There are excellent government and community resources which can help.  Engage and use these resources and benefit from the insights of others.  We are happy to help our customers find the right resources for their situation.

How a retail business comes out of discovering employee theft is up to the leaders of the business themselves.  They set the mood for the team.  It is important to reach a point of moving on and not looking back as soon as possible – for the sake of the business, its employees and its customers.

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By Mark