Nothing Sweet About It
Who knew a crime with a name as sweet would taste so sour to retailers? Sweethearting, giving customers unauthorized discounts or free merchandise or services, is the most common crime in retail, from restaurants and hotels to car washes and tanning salons.
While a cashier scanning an apple but bagging a prime rib, or a hotel desk clerk giving a deep discount to his mom might seem like a drop in the industrial bucket, it adds up to $60 billion in annual losses due to retail shrinkage. And it can put a real dent in any independent retailer’s bottom line.
Sweethearting is not for the faint of heart. Those found guilty get more than just fired and a slap on the wrist, as these workers found out:
- In Illinois, an employee was arrested after he was allegedly caught stealing close to $2,000 worth of merchandise by “under-ringing” to switch lower-priced items for higher-priced items for sale at a clothing outlet.
- In Colorado, a cashier was charged with retail theft after under-ringing merchandise by $65.55 at a major retail clothing store.
- In Pennsylvania, a 19-year-old clothing store cashier was facing three criminal counts for allegedly stealing merchandise and under-ringing customer transactions. He received probation, was ordered to pay restitution to the retailer in the amount of $1,579.42, and was assessed an additional $2,337 in costs and fees.
How can a retailer prevent their employees from giving away the store?
Select the Right Talent. Pre-employment screening tests can weed out potential sweethearters by measuring applicants’ personal ethics, comfort with risk-taking, and need for social acceptance — and flagging those at the high end of the risk-seeking scale.
Educate Employees. With the National Retail Federation reporting 32 percent of all first jobs in the U.S. are in retail, many of them cashier positions, effective training programs can prevent crime, as well as boost customer service and retain good employees.
Communicate Policy and Consequences. Make employees aware of the problem, teach them the ‘red flags’ and prompt them to report incidents. What also works? Remind them frequently about what’s not tolerated and the repercussions of sweethearting.
Keep a Close Watch. Video surveillance, scanner programs and technology can detect discrepancies and unusual patterns in transactions.
While a cashier scanning an apple but bagging a prime rib, or a hotel desk clerk giving a deep discount to his mom might seem like a drop in the industrial bucket, it adds up to $60 billion in annual losses due to retail shrinkage.
Be Present. Make periodic (yet randomly timed) unannounced visits to each and every retail location.
Boost Prevention Efforts for the Holidays. Many retailers hire temporary employees during busy holiday seasons to meet demand. Some don’t just work for the extra cash, but look to get away with sweethearting because retailers let their guard down. Don’t!
Insure the Bottom Line. Commercial crime insurance helps businesses recover financial losses from theft from sweethearting, forgery, burglary, impersonation, computer fraud, and robbery.
There is nothing “sweet” about sweethearting. But taking the right precautions can help a retailer keep profits from slipping out the door.