The Challenge of Employee Theft

As Inc. reports, “Employee theft is a considerable problem for many companies, but its precise extent is poorly documented. The U.S. Census Bureau does not track employee theft as a category.”

To give you an idea of how serious the problem can be, consider this information gathered by Inc.: “The most recent Annual Retail Theft Survey was based on data from 27 retail organizations employing 1.7 million people. In 2004, 3.7 percent of the employees were apprehended stealing from their employers to the tune of $671 per incident. By contrast, the average “take” of shoplifters in the survey was $149.”

There are generally three levels of employee theft, which the Hayes International survey identifies as minor theft (the widespread taking for at-home use of rolls of adhesive tape or boxes of paperclips, etc…) mid-level cases of employee theft like those cited above and major theft. Examples of major fraud would include the bookkeeper who embezzles $500,000 from her employer over a number of years. “Major fraud by very high-ranking employees of businesses like Enron are the theft-peak of the employee crime pyramid,” Inc says.

There are a number of different ways that employees commit theft at the workplace. As Inc. explains, though, “Employee theft may be grouped into four major categories: 1) manipulation of company records either to embezzle money outright or to hide the theft of goods; 2) direct theft of inventory, products, or cash; 3) abuse of power in order to aid and abet thievery by partners; and 4) theft of information for sale to others or for direct use (e.g., credit card theft).”

What should be of concern to all employers is the trend reported in an essay that ran in Inc. called Computer Crime. “An increasing proportion of attacks on computer systems take place from within the company. The target of this type of thievery is protected personal data, such as credit card information, which, in the wrong hands, can be turned into cash. More sophisticated forms of such theft are conducted in order to sell information to third parties.”

The experienced Florida private investigators at Five Points have helped many employers identify and stop employee theft. Our Palm Beach private investigators have seen the damage this crime can inflict on a business. Our private investigators in Fort Lauderdale have painstakingly combed through company records in search of evidence. And they, like our private detectives in Miami, have taken great personal pride in identifying the guilty parties.

If you think your company might be one of the many with an employee theft problem, “Managers and small business owners need to be aware of tell-tale signs which, when they frequently repeat, may be the tracks of a thief at work inside the company,” the experts at Inc. say. Among the things they recommend employers keep in mind are:

  • Company checks that bounce or someone is surprised that the company is doing business with XYZ and then adds: “Who isXYZ anyway?”
  • Customer complaints about missing, late, or short deliveries.
  • Hefty payments made for “miscellaneous” purposes in employee expense claims.
  • Frequent and puzzling mix-ups in inventory. And
  • Managers who insist on performing clerical duties.
  • Missing records (such as shipping and/or receiving bills).

Leave a Comment