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Working in the Gray: Workplace Deviance, Theft and Fraud
By William England, CFE
Senior Manager, Regional Asset Protection
Winn-Dixie Stores, Inc.
I recently attended a fraud training seminar in New
Orleans where the presenter, Ryan Hubbs, put forth his
research on Using the Deviant Behaviors of Others to
Find Fraud. The crux of the presentation simple, Is
there a correlation between non-fraudulent behaviors in
the workplace and fraud? After researching over 19,000
case reports and news articles involving businessmen,
politicians, military Generals, pastors and priests
charged with theft or fraud, the answer is an
overwhelming Yes.
Try to recall how many times you have seen a political
figure or corporate executive be charged with a fraud of
some sort only to have the investigation later reveal
other reality-TV worthy tidbits like an extra-marital
affair, gambling addiction, obsession with pornography
and the like. Almost always, the subjects being charged
exhibited a deviant behavior that could have been a clue
to investigators saying 'Dig Here'. A quick Google News
search for 'Fraud Charges AND Sex' hit 57,600 articles
published within the last 30 days. There is an
undeniable link. So, how does all of this tie in to the
world of retail Loss Prevention?
I began thinking about all of the non-fraudulent or
theft related behaviors that exist in corporate offices
across America. Sexual harassment, workplace violence,
bullying, office affairs, retaliation, intimidation and
the viewing of adult websites using company workstations
or laptops all occur on a more frequent basis than any
professional would like to admit. Would your Loss
Prevention organization be invited to participate in
these investigations? Would senior leadership even want
their LP teams involved with these types of
investigations?
In retail locations other issues may arise that get a
little more Loss Prevention focus but because they may
not directly impact the shrink number or would be hard
to prosecute, they get low priority or no attention at
all. For example, loyalty program abuses, coupon abuse
and employee discount abuse all cost the company money
but many Loss Prevention departments would likely leave
these types of investigations for Human Resources to
handle. Is this in the best interest of the company?
Human Resources investigations generally are conducted
with a different purpose; to resolve the ethical or
policy aspect of situations. What research illustrates
though is that employees who exhibit these deviant
behaviors, which at their core are blatant and knowing
violations of company policy, many times deserve beyond
a cursory examination. These deviant behaviors could be
indicators of other activities beyond policy violations
which could be costing your company large sums of money.
I contend Loss Prevention should at least play a
supporting role in these investigations. I am not
suggesting we be the first call made on these issues or
that LP should take the lead on every sexual harassment
complaint or sordid office affair, but we need to be in
the conversation on these types of issues. Our Loss
Prevention teams are trained to investigate. It's what
many of us do best. With solid partnerships in Human
Resources, Legal, IT and Accounting, many times these
cases could be reviewed in just a few hours to determine
if they warrant further examination.
If a Buyer is found to have viewed or downloaded adult
materials on their company device, LP should do a little
leg work and review expense reports for irregularities.
Was the adult site subscription put on an expense report
as something else? Shouldn't your exception reporting
system give visibility to loyalty card abuses? When a
cashier appears several times on exception reports for
loyalty program abuse, wouldn't you want to look over
their refunds? Maybe you'd want to watch some video of
them running the register to spot potential
sweet-hearting. A simple policy violation which may have
resulted in a verbal warning might turn into a theft
case worth several thousand dollars. Not giving the
issue some basic attention could further your exposure
and exacerbate your losses.
Test the theory. Review some past cases and see how many
of them were made well after Human Resources or
management has already interacted with your subject.
What is the dollar value of those cases? Do you still
think you can afford to not be in the conversation on
these issues? |
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