I thought the article printed below was a pertinent article even though it was written about the retail industry as it also exemplifies the current theft epidemic in the bar-liquor service industry.

When the “Great Recession” started a year – year and a half ago, the Hospitality Checkpoint office observed an anomaly in its regular mystery shop reports. The evaluations submitted with incidents of employee theft increased by an astounding 400%. It was astonishing. It was also very disconcerting to observe, albeit a boon for us, but still a bit to stomach.

I’ve always been under the impression of the 25%-50%-25% rule of bartender theft. 25% of bartenders will never EVER steal from you – it’s not in them and they have high integrity. Another 25% are the polar opposite and will rob the house EVERY single chance that they get. From day one they are testing the parameters looking for loopholes of theft opportunities. The other 50% is a bit gray. This group will still when an opportunity presents itself. Maybe they are disgruntled in there job, with their employer/manager or feel slighted in some way. Also, if they happen to be in financial dire straights – mortgage, alimony, child support etc. This group steals only occasionally when the opportunity or need is there. Now with that said, with that formula, 75% of bartenders WILL STEAL from the house at some point.

What happened here is a perfect storm of bartender theft so to speak. That group of 50% that was a gray area, well, they ALL started stealing and stealing big. Customers that we have had for 6 or 7 years with little or no theft occurrences were now having theft issues. Bartenders for the most part live hand to mouth with their money – it’s cash, very liquid, and comes and goes like that feather floating in Forest Gump.

They also have a “standard of living” and when they are used to making $100 – $300 a night, and are now making $50 – $150, well that becomes a financial issue. When their bartending shifts are cut back because of the sag in the economy and the owner wants to cut labor, well that becomes a financial issue. Their shift are cut back and is coupled with a drastic reduction in tips as well, well that becomes a financial issue. Some idiot irresponsible mortgage lender helped get them into that $500,000 home, then the teaser mortgage, resets and triples, well that becomes a financial issue. Now they’ve maxed out their credit cards, well that becomes a financial issue. With all that said, you can interpolate what the easiest and quickest solutions to their woes are – start stealing and that’s what happened and is still happening.

~Michael Zenner

Thefts by employees a big problem made bigger in hard times

By JOE LAMBE The Kansas City Star

Retailers spend a lot of time and money to prevent shoplifting, but a bigger threat to the bottom line is the person behind the counter.

No one knows exactly how much employees steal each year, but one national survey late last year showed that companies lost $18.7 billion in the 12 months ending in June because of worker theft — the largest single cause of retail “shrinkage.”

Another survey for 2008 found that employees stole far more than shoplifters and that among 22 large retailers, one in 30 employees was caught stealing.

“It happens from the top down to the bottom up,” said Terrence Shulman, an author and a counselor on the subject who is a lawyer with a master’s degree in social work.

Two recent local cases illustrate how large the problem can be. A former employee is suspected of stealing more than $300,000 in goods from a Target store in Kansas City. In Johnson County, a salesman and shipping clerk together stole an estimated $30,000 worth of suits from an Overland Park men’s store.

Experts say that with hard times, more employees are stealing, but many have always done it anyway. The U.S. Chamber of Commerce has long said that 75 percent of employees steal from their employers at least once.

They start small, get bolder and often get caught, said Casey Chroust, a vice president with the Retail Industry Leaders Association.

Said Shulman: “More are getting caught because security is getting more sophisticated, but there are fewer loss-prevention officers, so it’s kind of a wash.”

Allan Bachman, the education manager for the Association of Certified Fraud Examiners, last week called the situation “almost a perfect storm” as companies that are trying to weather the recession eliminate protective measures.

Two years ago, the association estimated that American businesses lost 7 percent of annual revenue to fraud, but the group now suspects that figure has grown. A short random survey last spring found fraud increasing as those who monitor it get layoff notices.If a company is floundering, some managers may try to loot the ship before it sinks, experts say. The same goes for employees facing layoffs and demands for harder work.At the boss levels, big money vanishes with fraud such as embezzlement and kickback deals with suppliers.“There is a possibility that schemes are being created right now that won’t be discovered for years,” Bachman said.

Bachman said thieves who steal by fraud are often people in positions of absolute trust. Said Shulman: “It is often the star employee who is led out in handcuffs.”

The Target employee suspected in the massive thefts from the discount chain’s Ward Parkway store had worked there since the store opened and was considered its best employee, police said.Target security officers in January realized items were missing from a loading dock and started an investigation.

Police were called in to investigate and officers conducting surveillance watched as the female employee helped to put merchandise from the loading dock in two movers’ trucks. Officers followed one truck to a Henry County farmhouse, and they found about $100,000 worth of Target goods there. Officers said the house was set up like a store, with mini-refrigerators and freezers on a back porch, household items in one room, and toys and clothes in another. It was one of four such farmhouses they raided. The investigation continues, and the woman has not been charged.

Michael Zenner – CEO

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