EMPLOYEE THEFT IN THE SOUTH AFRICAN RETAIL INDUSTRY: KILLING THE GOOSE THAT LAYS THE GOLDEN EGG?

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Abstract

Employee theft has once again come to the fore as a result of the economic crises prevailing world wide. It is a known fact that as economic hardships increase people are looking at other ways and means to supplement their declining income. One such method is unethical behaviour in the form of employee theft. Retail shrinkage as a result of theft by employees and consumers is a serious problem worldwide and has a direct effect on commerce and industry. Not only does it result in a loss of profit but the retailer is also faced with additional costs such as legal expenses, loss of productivity, expensive security measures, product replacements, increased insurance, loss of trained staff and the expense of retraining new staff in the case of conviction of dishonest employees. The cost of employee theft is enormous and it has a definite and detrimental impact on business activities. Industry estimates place shrinkage at between 5 and 7 percent of turnover, with most companies budgeting for at least 3 to 5 percent. The main purpose of the study was to examine the reasons why employees participate in this type of dishonest behaviour and the methods that they use in such instances. The research followed a quantitative approach where a survey questionnaire was used as the data collection method. As few if any person will admit to stealing, projection techniques were used to obtain the information. It was found that employees are aware of a variety of methods by which employees steal. The impression was gained that employees are not aware of the impact and effect losses of this nature have on the future success of a company. Dishonesty creates its own vicious circle. If management is perceived as treating employees unfairly in order to make even larger profits employees become defiant and react in such a dishonest manner. Employees then regard stealing as paying management back for this. This study highlights the areas where corrective action is required and indicates the need for a strict security policy and a beneficial corporate environment to be created by management.

Keywords: Retail Industry, Employee Dishonesty, Theft, Shrinkage, Shoplifting

How to cite this paper: Cant, M. C., & Nell, E. C. (2012). Employee theft in the South African retail industry: Killing the goose that lays the golden egg? Corporate Ownership & Control, 10(1-4), 444-454. https://doi.org/10.22495/cocv10i1c4art5