Former Federal Agents Can Help Solve Retailers' Employee Theft Problems

From taking a watch straight out of the case to walking out with an armful of $3,000 party gowns, the problem of employee theft is motivated by an ever-growing sense of entitlement, as well as a blatant disrespect for the employer and the law. From my perspective as a former supervisory agent with the Drug Enforcement Administration (DEA), the same practices used in fighting drug dealers applies to tracking down thieves inside the workplace. Professionally conducted interview and interrogation tactics and procedures play a critical role in identifying the prime suspects and solving this costly problem.

Corporate theft, occupational crime, dishonesty and workplace deviance are on the rise in the retail industry. Based on research by Martin Investigative Services, the employee theft rate held steadily at 15 percent from 1969 to 2006. This figure skyrocketed during the third quarter of 2006 to an alarming 75 percent. In his article, “Retail Crime Cost U.S. Retailers $41.7 Billion in 2011” published in Retailing Today, Michael Johnsen reported $18.4 billion of this staggering amount was attributed to employee theft.

Driving factors of employee theft and finding the red flags
There are four types of employee thieves actively engaged in stealing time, money or products from their employers:

Thieves by nature—those who enjoy stealing
Employees who feel entitled—the world owes them more than what they earn
Employees stealing out of desperation—they are either in extreme debt or have a drug/gambling problem compounded by a weak economy
Theft by a target of opportunity. Money in plain sight will be taken.

Many retail executives do not grasp the full magnitude of theft in their company until they see the results of an investigation. To the untrained eye, a retail store or warehouse might be operating normally. To someone with significant investigative experience at the federal level, the work environment can be rife with theft. This problem can be remedied by private investigators who ask probing questions, identify/confirm the facts and corroborate allegations of costly and reputation-damaging acts of theft.

Use laser-precision techniques to find thieves
For many private investigation and corporate security firms, the first plan of attack in uncovering an employee theft may be to plant an undercover agent in a store or warehouse. A more effective approach is to conduct a series of interview and interrogation sessions using former supervisory federal agents who work independently in the private investigation industry.

Interview and interrogation practices have been relied on for decades by federal law enforcement agencies. The application of these same procedures and specialized training in dealing with employee theft often brings quick results. This approach of uncovering the facts takes far less time than using undercover agents.

With so much at stake, it is essential to use private investigators who are able to conduct an interview and interrogation session that parallels federal investigative standards and is acceptable in any court of law. This level of expertise is found among former supervisory agents who have worked for the FBI, DEA, IRS and Secret Service.

The interview and interrogation process
The interview and interrogation approach to uncovering employee theft in an apparel company begins by meeting the president or CEO to gain his/her perspective on the problem. This first step is followed by a series of interviews in the areas where the theft is occurring. Conducting thorough interviews of employees about scheduling, accounting and inventory activities can bring to light a host of suspicious problems that yield a significant amount of evidence in as little as four hours.

By articulating the seriousness of the crime and the determination to solve it, two private investigators with exceptionally strong interview and interrogation skills are able to, in most cases, receive a confession from an employee in minutes. This confession can lead to the identification of either one or more employees engaged in theft regionally or nationally. Once the employees are identified, they are subject to the policies of the company’s human resources department. If charges are made, they can face criminal prosecution.

Breaking a security guard theft ring
The revenue from the flagship store of a large, upscale national clothing chain was suspiciously lower than the previous year. Suspecting a significant case of employee theft, the company’s management used an outside team of private investigators to interview the store’s employees.

After a few days of interviews and interrogations, the employees interviewed were cleared of their involvement in the suspected theft. This enabled the team to concentrate specifically on the actions of the retailer’s security personnel. The team’s concerns were confirmed on the first night when surveillance cameras caught several security guards removing clothes from the racks and placing them in a dumpster at 3 a.m. The items were later picked up and traded in for cash at another store. This case demonstrates how proper interview and interrogation practices can quickly lead private investigators to the source of most employee theft issues and avoid costlier investigative practices that can include undercover work.

The value of an independent evaluation
An independent evaluation or review by a third-party private investigation firm gives large-to-medium-sized apparel and fashion companies an objective look into solving employee theft problems. An investigation from outside professionals, with significant career backgrounds in federal law enforcement, is an effective course of action for meeting companies’ legal and corporate mandates.

This approach also directly targets the source of disappearing merchandise on the retail floor or warehouse where an internal review might possibly be hampered by managers blaming each other and not disclosing all the facts. The main objective of the private investigation firm is to help protect the company’s retail stock, assets and revenue stream through the identification of employees suspected of theft and providing recommendations to enhance security in retail outlets, warehouses and throughout the supply chain.

Thomas Martin is the president of Martin Investigative Services, Inc. in Newport Beach, Calif.
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