Exam 2 Study Guide Chapter 3 Retail Crime and Service Fraud In sales oriented occupations in particular the likelihood of theft is o high Retail businesses like corporations engage in many deceptive and illegal activities What are some of these types of activities o Fraudulent advertising o Illegal pricing practices o Sale of fraudulently represented merchandise o Purchase and resale of stolen goods which means let the buyer beware has traditionally regulated the relationship between buyers and sellers o Caveat Emptor The is the setting where consumers purchase various types of products Experts use the concept of to refer to the theft of goods in the retail industry o Retail system o Shrinkage o Employees o Increased are believed to be the number on shrinkage offenders Has employee theft increased or decreased What are some explanations for the increase in employee theft o Economic changes o Richard Hollinger suggests that more workers being along in stores means that workers will have more opportunities to steal State of Florida In the state of Florida shoplifting leads to a charge and up to o Misdemeanor one year in jail The of the theft will determine the severity of the punishment o value A Diversion program upon first offense has resulted in guaranteed o dismissal 99 9 of the time CBC video The secret world of shoplifting o Depressed economy o Cost a billion in U S o Organized gangs o Approx 10 U S population o 80 shoplifted once o Lose more than 40 billion a year due to shrinkage o Employees most then shop lifter o No typical profile of a shoplifter o More than 600 000 will get caught this year o Shoplifters steal for different reasons o Management is responsible for more than half of theft o Pros Called boosters Employee Crime is the unauthorized taking control or transfer of money and or property of the work organization by an employee during the course of employment o Employee Theft What are some different kinds of employee theft o Pilfering Chiseling Fraud Embezzlement refers to petty theft o Pilfering Chiseling refers to or o Cheating swindling is theft through misrepresentation o Fraud refers to the destruction or fraudulent appropriation of another s money which has been entrusted to one s care o Embezzlement Internal Theft Theft by employees is thought to make up over of companies losses o 50 What are some alternative forms of employee crime o Employees may commit sabotage Conceal their own errors To gain time off To express their contempt and anger with their work and employer What is an example of a theft of ideas designs and formulas o Mark Zuckerburg and Facebook Other types of employee theft in retail settings o Employees charge customers more than they should have o Employees do not give customers all of their change and pocket the Overcharging difference Shortchanging Coupon Stuffing nonexistent returns settings Embezzlement supplies that were not needed Over ordering o Employees steal coupons and use them later o Credits for Employees give credit for returns to collaborators o Theft of and Employees steal items used to produce goods in retail Production supplies and raw materials o Employees steal money from an account to which they have access o supplies Employees order more supplies than are needed to keep the o Theft of Employees steal customers information Credit card information o Theft of Employees steal the items the retail setting is trying to sell Goods o Theft of Employees take money out of the Money from the cash register o deals Employees give friends and family members unauthorized discounts refers mainly to basic bulky components and tools Sweetheart Some factors in employee theft o Company property o Uncertain ownership o Personal property individual Property of small inexpensive items like pens pencils nails bolts drill bits etc includes monogrammed clothing wallets jewelry personal modified tools etc Research has found that employee theft is more likely to be committed by what type of o More likely to be young males and unmarried Research has found that employee theft is more likely to occur from organizations Research has found that employee leads to higher rates of employee theft Research has found that is a major determinant of employee theft Those with greater access to things worth stealing are the most likely to o Large o Dissatisfaction o Opportunity do so o Theft What is one of the fastest growing crimes in America in workers claimed stealing last year o 1 in 28 Employee theft in retail crime Name some types of deceptive practices employees commit in retail crime o Manipulation of products o Coupon stuffing o Sweetheart deals o Collection of taxes on nontaxable items e g labor o Wage theft from register goods or credit card information What are some prevention strategies that have been cited as ways to limit the extent of employee theft o Importation strategies o Internal strategies o Technological strategies o Organizational Culture Strategies o Awareness Strategies strategies strategies that aim to import only the best types of employees who are less likely to engage in employee theft o Importation Ex background checks drug tests etc strategies include policies and practices performed within the retail setting in an effort to prevent employee theft o Internal Ex random inspections audits developing rules that guide returns developing internal control policies strategies entail the use of various forms of technology to prevent employee theft in retail settings o Technological Ex use of video cameras o Closed circuit television What has been hailed as the most effective deterrent in retail settings strategies aim to promote an organizational culture that values honesty and loyalty o Organizational culture In the organization culture strategy supervisors are encouraged to do what o Provide advice to employers about the organization s culture o Build loyalty between the employee and the employer o Establish a trusting relationship between workers o Eliminate temptations Mazur calls for the building of a Strong integrity program to prevent retail theft and entails what Four elements o Mangers would be held accountable for employees behavior and provided incentives as part of the accountability o Managers would ensure that all employees be aware of the rules of conduct in the retail setting o An effort would be made to give employees a sense of authority o Managers would provide employees an outlet for reporting misconduct reporting