Tags: retail | theft | databases | employees

Retailers Embrace Technology to Combat Employee Theft

By    |   Wednesday, 03 April 2013 11:51 AM

An increasing number of retailers are compiling databases on thieving employees in an effort to stem the longtime problem. However, some are concerned the information is leading to false accusations.

The databases are used by tens of thousands of companies, including major retailers like Target, CVS, and Family Dollar to help curb shrinkage. Figures provided by the National Retail Federation in 2011 showed employee theft accounted for about 44 percent of missing merchandise, with a value of $15 billion, The New York Times reported Wednesday.

While the databases are legal, an increasing number of labor lawyers and federal regulators are concerned that innocent employees are being harmed. They also say a number of workers have been coerced into confessing, often without any proof of wrongdoing. In most cases, the workers are unaware that their confessions will lead them to be characterized as thieves, making obtaining future retail work difficult.

Although background checks in the industry have been common, there’s also concern about the legitimacy of theft admissions that are tracked in the system. Federal regulators are eyeing the information, too. Just last summer, the Federal Trade Commission settled charges with HireRight, which provides a retail theft database. The agency said some of the database’s records were inaccurate and that it was difficult for those accused to dispute claims.

Lawyers say that since the recession, employees accused of theft have found it next to impossible to obtain work. A number of attorneys have also filed class action lawsuits against the database companies, which include not only HireRight, but GIS and others.

Often employees accused of theft are quick to admit guilt in an effort to avoid a detailed investigation. In addition, employees don’t have typical due process rights, which would include a warning from an employer. Even when employees don’t admit guilt, they say the information stored in the database regarding the incident makes future employment difficult.

Stores say they are carefully training loss-prevention officers to ensure the information they gather about suspected thefts is accurate. Still, concern over the value of the databases has led some companies, such as Home Depot, to stop using them altogether.

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An increasing number of retailers are compiling databases on thieving employees in an effort to stem the longtime problem.
Wednesday, 03 April 2013 11:51 AM
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