Daily Dose of iQ: Retailers Use Massive Databases to Track Employee Thieves

Apr 03, 2013 — Allan Pulga

Employee theft is a major issue in retail. According to the National Retail Federation, 44% of missing merchandise in 2011 was attributed to employee theft, amounting to a total value of $15 billion.

To combat this problem, tens of thousands of retailers -- including Target, CVS and Family Dollar -- are subscribing to large databases of workers accused of stealing and using the system to blacklist offenders and keep them out of the industry, wrote Stephanie Clifford and Jessica Silver-Greenberg of the New York Times yesterday (April 2).

Clifford and Silver-Greenberg note that theft details recorded in these databases are often limited and routinely do not involve criminal charges.

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"Some of the employees, who submit written statements after being questioned by store security officers, have no idea that they admitted committing a theft or that the information will remain in databases, according to interviews with consumer lawyers, regulators and employees."

While the databases are controversial, they are legal. Still, labor lawyers and federal regulators worry they are so sweeping that innocent employees can be harmed.

"The lawyers say workers are often coerced into confessing, sometimes when they have done nothing wrong, without understanding that they will be branded as thieves," wrote Clifford and Silver-Greenberg.

Topics: Retail Operations, Fraud, Mobile Industry

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