Employee theft: a scenario

by James W. Bassett

Employee theft is a problem many distributors face on a daily basis. This is a fictionalized conversation between a thief and an investigator. Use the footnotes at the end of the story to catch the thief’s slip-ups and to gain some understanding of the way thieves exploit their place of business. Hold your mouse over the stars to read the footnotes directly on the page.

"This is the first time I ever tried to steal anything from this place," Bob pleaded. (1)

The investigator said, "Come on, Bob. Inventory shortages have plagued Edwards Distributors for the past six months. Don't try to play me for a chump."

"Hey, look. I don't want to go to jail. Is there any way we can work this out?"

"Your boss, Ed Edwards, said if you make a full confession and pay for the things you stole, the company wouldn’t prosecute. If you want to take Mr. Edwards up on his offer, start at the beginning and tell me the whole truth. Tell me what you stole, all of it."

"OK, OK. Six months ago, while standing in line at the unemployment office, someone told me how he lost his job at Edwards Distributors. He said he had a problem getting to work on time. I knew a little about Edwards. It seemed like a nice place to work. So, I applied for a job here. They needed warehouse workers really bad, so they hired me without checking me out." (2)

"If they checked you out, what might they have found?"

"I don't know. Maybe that my last two employers let me go. Maybe some bad check charges pending. Domestic violence. Little stuff like that. Nothing serious. (3)

"Anyway, they started me working with different employees so they could train me,” Bob continued. “The first thing I did was to see if anyone was watching me when I left work at the end of the day. Nobody did. So, I put a couple of small boxes of product under my coat and walked out the back door. (4)

“There's another thing I did. While these employees were training me, I learned all sorts of stuff about them, personal stuff. I learned who owed lots of money, who complained about their pay, hours and benefits. I learned who didn't like the boss. I started joking around with them, making comments about stealing. I'd look to see who picked up on what I was saying. I asked one employee, Frank, if he thought the security camera had film in it. Frank said, 'Sure it does. But, that camera can't see everything!'

“I asked a driver, Mike, if he had ever thought about keeping it when an overage came up on his truck. He said, 'Of course, who wouldn't?' But when I asked Clark the same question, he said, 'Oh no! I could never even think about stealing from this place. Mr. Edwards has been too good to me!' So, I said, 'Yeah, I couldn't either. He's really a good guy.'" (5)

"Why did you care who else was stealing?" the investigator asked.

"I figured if someone else was getting away with it, I could too. First, a distributor like Edwards has to become aware that someone’s ripping it off. Some of them never do. They never do inventories, never look for empty boxes in their stock rooms, never really pay attention to what's going on in their own warehouses. Next, you got the bosses who suspect company merchandise is disappearing but don't want to think their employees are stealing it. They don't want to believe it because they don't want to deal with it. They try to convince themselves that it's computer error or miscounts or customers stealing it. They think, somehow, their shortage problems will go away."
(6)

"How do you know all this?" the investigator asked.

"I used to own a small business once," said Bob.

"What can you tell me about George, your immediate supervisor"

"I never got to know him very well. He usually worked in his office doing paperwork or talking on the phone. If we got really busy unloading trucks, someone would call George to come and help out. Sometimes he'd come. Sometimes he wouldn't. I never saw George sweep the floor or take out the trash. He left all the real work to us employees.” (7)

"Anything else about George?"

"George treats some of his employees better than others. Some of us always get called at the last minute to work overtime if someone else doesn't show up. But George's favorite employees never got called to work overtime. You think he ever said, 'Thanks for working overtime on such short notice.’? Nope, not George. He just complained about the overtime he owed us, like it was his own money." (8)

"Did you steal when you had to work overtime?"

"A little, I guess."

"How about Brenda, the bookkeeper? Why did she quit all of a sudden?"

"I didn't know about her until recently. I saw her in a bar. I asked her why she quit. She told me she started working last October and planned to work hard and save money. Told me she promised her three kids Santa would come through big if they behaved themselves. But, she wasn't able to save much with taxes and all. Her daughter, Sally, wanted a doll. The younger boy, Billy, wanted a bicycle. Charley wanted a game playing system. Her ex-husband quit paying child support. She said she couldn't let her kids down. So, she cooked the books at Edwards Distributors. Said she just planned to borrow the money and put it back later. Sally got an electronic talking doll. Billy got a titanium racing bicycle. Charley got a top-of-the-line computer system." (9)

"And, Edwards got a huge shortage for the month of December."

"Right. Brenda stuck around until May. When she thought George might figure it out, she quit. Hey! I got a question for you. How did you get on to me?"

"Remember that questionnaire you took a couple of weeks ago--- the one about the shortages? It told us you were stealing. We just put you under surveillance until we caught you." (10)

"Man, I thought I answered those questions really well."

"You did. So, tell me Bob. Suppose you could put all the merchandise you stole from Edwards Distributors on the floor of this room. How much would it total in dollars?"

"Only a few hundred."

"Tell me the truth or go to jail. I really don't care which. (11)

"Oh, you want to know what I took and sold too?"

"Yeah."

"$12,000."

Footnotes
(1) When caught stealing, many dishonest employees say it is their first time. This is rarely true.

(2) Failing to investigate applicants before hiring them can prove costly.

(3) Saying it's "nothing serious" suggests there might be more serious problems.

(4) Most dishonest employees don't steal anything of value during the first month of their employment. They need time to figure out how to get away with it. Bob is the exception. He is a very experienced and confident thief.

(5) Bob knows that employees who admit they thought about stealing are probably stealing. Investigation of co-workers Frank and Mike is indicated.

(6) Employee theft is the second leading cause of small business failure, at about 33 percent.

(7) Dishonest employees always seek to blame someone or something else. Here, Bob projects the blame onto George.

(8) Favoritism of one employee over another, real or imagined, is often used by dishonest employees to rationalize theft.

(9) Many dishonest employees tell themselves they are just borrowing the money and plan to pay it back when they start stealing. It is much easier to perceive oneself as a borrower than a thief. Every Christmas, dishonest employees try to put a little extra under their trees at their employers' expense. Employers often lower their guard during this season of trust and goodwill. Notice that Brenda continued to steal until she feared getting caught.

(10) For more information about the Shortage Questionnaire, contact the author.

(11) Dishonest employees seldom admit to the full extent of their theft the first time they are asked or even the second time. There is an entire sequence of questions used to accurately approximate how much a dishonest employee really stole.

ABOUT THE AUTHOR
James W. Bassett, president of James W. Bassett Co. Inc., specializes in investigative questionnaires for businesses. He is the author of the Shortage Questionnaire, the Specific Loss Questionnaire, the Crime Questionnaire and the V.A.Q. pre-employment test. He can be reached at (513) 421-9604 or through his company's Web site at www.theftstopper.com