No five-finger discounts allowed

There are two distinct categories of theft from a business — thefts by a customer and thefts by an individual from within the organization. Today’s article addresses thefts by individual within an organization.

So why do people steal from their employers?

The answer is as varied as the individuals who perpetrate the action. The word perpetrator correctly identifies these individuals since their actions are criminal. However, only a fraction of these individuals are ever prosecuted because the losses are relatively small. Generally, we are aware of only those incidents that make the news or occur within our own organizations. However, there are a multitude more that occur every day.

What constitutes stealing? It can be as simple as cheating on time cards, taking office supplies for personal use, using the company car to run errands, mixing company and personal expenses on company credit cards, etc. These may seem simple examples, but the difference between these examples and taking actual cash is simply semantics. The taking of assets from an organization for which we work is stealing regardless of the rationalization process that such an individual may use.

So why would a business not pursue legal action against every individual who was caught misappropriating (a nice way to say stealing) company assets? With the cost of attorneys, legal fees and negative publicity, most companies would simply prefer to terminate the employee and get on with business. Whether we agree with this course of action does not really matter. Each business must reconcile what is most appropriate for that company’s situation.

What I find very disturbing is the recent number of high-ranking personnel in the news regarding the embezzlement of funds from non-profits. I have always felt these individuals should set a higher example of ethics then their peers in the private sector. I put them in a category similar to policemen and firemen whom we hold to a higher standard in regards to their ethics and actions. Do not get me wrong. All individuals should have high moral standards and live by them.

Regardless of the organization that is being ripped off, the point is we must be alert to the potential for loss from the top of the organization to the lowest level of employees.

Due to losses being as varied as the number of employees within our organization, developing a loss prevention program that is based on reasons for theft is impossible. So how does a business properly prevent asset losses?

Establish an across-the-chart policy regarding theft and the consequences of theft. The policy should be specific, fair and written in such a manner that every employee can clearly understand the policy.

Top level management must set an exemplary example by never violating the policy. Whether you are the owner or not, if an employee observes you removing items from the business for personal use, he or she may emulate your actions and rationalize that it is appropriate behavior. Here is where you start your loss prevention program. Live it for yourself.

Establish an ongoing training program for all employees in loss prevention. This action has the greatest opportunity for success as it involves all employees in loss prevention. Stopping the smallest loss could lead to preventing a larger loss, so pick the seed of theft before it becomes a tree of disaster.