Employee Theft: Views from Two Sides Retailers generally underestimate the extent of employee theft, this survey showed. The authors suggest that employee stealing can be eliminated to some extent by responsive employers. JOSEPH F. HAIR, JR., RONALD F. BUSH AND PAUL BUSCH All three authors teach marketing at the University of Mississippi. Estimates of retail losses due to various forms of theft range as high as $5 billion annually. Much of the problem is attributable to cus- tomer shoplifting, which lost retailers an estimated $3.5 billion in 1972) An equally costly problem, however, is theft by em- ployees. The security chief for a large retail drug chain, in an interview with Earnest Dickinson, claims: "About 70% of money lost to crime in business today is lost internally. Employees just wait for the manager to become lax. ''2 Theft by employees amounts to a loss of more than $10 million a day in cash and merchandise-about $3 billion a year? Most studies of retail theft have focused almost exclusively upon shoplifting, with much of the data derived from police and store records. However, few empirical studies have examined the problem of internal theft 1. "Foil the Shoplifter and Lure the Investors," Business Week (December 25, 1972), pp. 22-23. 2. Earnest Dickinson, "Drugstore Security: The Battle to Keep What You Have," Drug Topics (September 25, 1972), pp. 48-49. 3. "Why Employees Steal," U. S. News and World Report (May 3, 1971), p. 78. in retailing. Therefore, the authors conducted research with the following purposes in mind: (1) to assess employers' perceptions regarding the nature and extent of retail shrinkage; (2) to determine what employers believe consti- tutes theft (stealing) by their employees; (3) to determine what antitheft practices and policies are followed by employers when confronted with employees who steal; (4) to get employers' ideas on why employees steal from them; and (5) to compare employer and employee views on internal theft in retailing. The research was based upon a mail survey of retail merchants in the state of Mississippi. A total of 312 completed questionnaires were received. Of these, 254 were usable; the remaining were eliminated due to incomplete or inaccurate responses (the usable response rate was 36%). The six major categories of store types represented were: department stores (23.5%), clothing stores (15.6%), drug- stores (14.7%), discount department stores (10.8%), grocery stores (6.4%), and hardware stores (5.6%). These six categories accounted for 76.6% of the total responding. A large number (66.7%) of the stores reported an annual sales volume under $500,000; 16.9% were in the $500,000 to $1 million category, 25 DECEMBER 1976