Risk Insider: Greg Bangs

Nothing Sweet About It

By: | September 12, 2017 • 3 min read
Gregory W. Bangs is senior vice president, crime regional leader for North America at AXA XL, a division of AXA XL. Over the last 30 years, he’s been underwriting insurance and developing new products in the U.S., UK, Hong Kong and France. He can be reached at [email protected]

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.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]