Risk Insider: Greg Bangs

Nothing Sweet About It

By: | September 12, 2017 • 3 min read
Gregory W. Bangs is chief underwriting officer of global crime at XL Catlin. Over the last 30 years, he’s been underwriting insurance and developing new products in the U.S., U.K., 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

Risk Management

The Profession

Pinnacle Entertainment’s VP of enterprise risk management says he’s inspired by Disney’s approach to risk management.
By: | November 1, 2017 • 4 min read

R&I: What was your first job?

Bus boy at a fine dining restaurant.

R&I: How did you come to work in this industry?

I sent a résumé to Harrah’s Entertainment on a whim. It took over 30 hours of interviewing to get that job, but it was well worth it.

R&I: If the world has a modern hero, who is it and why?


The Chinese citizen (never positively identified) who stood in front of a column of tanks in Tiananmen Square on June 5, 1989. That kind of courage is undeniable, and that image is unforgettable. I hope we can all be that passionate about something at least once in our lives.

R&I: What emerging commercial risk most concerns you?

Cyber risk, but more narrowly, cyber-extortion. I think state sponsored bad actors are getting more and more sophisticated, and the risk is that they find a way to control entire systems.

R&I: What is the riskiest activity you ever engaged in?

Training and breaking horses. When I was in high school, I worked on a lot of farms. I did everything from building fences to putting up hay. It was during this time that I found I had a knack for horses. They would tolerate me getting real close, so it was natural I started working more and more with them.

Eventually, I was putting a saddle on a few and before I knew it I was in that saddle riding a horse that had never been ridden before.

I admit I had some nervous moments, but I was never thrown off. It taught me that developing genuine trust early is very important and is needed by all involved. Nothing of any real value happens without it.

R&I: What about this work do you find the most fulfilling or rewarding?


Setting very aggressive goals and then meeting and exceeding those goals with a team. Sharing team victories is the ultimate reward.

R&I: What is the most unusual/interesting place you have ever visited?

Disney World. The sheer size of the place is awe inspiring. And everything works like a finely tuned clock.

There is a reason that hospitality companies send their people there to be trained on guest service. Disney World does it better than anyone else.

As a hospitality executive, I always learn something new whenever I am there.

James Cunningham, vice president, enterprise risk management, Pinnacle Entertainment, Inc.

The risks that Disney World faces are very similar to mine — on a much larger scale. They are complex and across the board. From liability for the millions of people they host as their guests each year, to the physical location of the park, to their vendor partnerships; their approach to risk management has been and continues to be innovative and a model that I learn from and I think there are lessons there for everybody.

R&I: What is the risk management community doing right?

We are doing a much better job of getting involved in a meaningful way in our daily operations and demonstrating genuine value to our organizations.

R&I: What could the risk management community be doing a better job of?

Educating and promoting the career with young people.

R&I: What have you accomplished that you are proudest of?

Being able to tell the Pinnacle story. It’s a great one and it wasn’t being told. I believe that the insurance markets now understand who we are and what we stand for.

R&I: Who is your mentor and why?


John Matthews, who is now retired, formerly with Aon and Caesar’s Palace. John is an exceptional leader who demonstrated the value of putting a top-shelf team together and then letting them do their best work. I model my management style after him.

R&I: What is your favorite book or movie?

I read mostly biographies and autobiographies. I like to read how successful people became successful by overcoming their own obstacles. Jay Leno, Jack Welch, Bill Harrah, etc. I also enjoyed the book and movie “Money Ball.”

R&I: What is your favorite drink?

Ice water when it’s hot, coffee when it’s cold, and an adult beverage when it’s called for.

R&I: What does your family think you do?

In my family, I’m the “Safety Geek.”

R&I:  What’s your favorite restaurant?

Vegas is a world-class restaurant town. No matter what you are hungry for, you can find it here. I have a few favorites that are my “go-to’s,” depending on the mood and who I am with.

If you’re in town, you should try to have at least one meal off the strip. For that, I would suggest you get reservations (you’ll need them) at Herbs and Rye. It’s a great little restaurant that is always lively. The food is tremendous, and the service is always on point. They make hand-crafted cocktails that are amazing.

My favorite Mexican restaurant is Lindo Michoacan. There are three in town, and I prefer the one in Henderson as it has the best view of the valley. For seafood, you can never go wrong with Joe’s in Caesar’s Palace.

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]