Originally created 02/10/02

Crimes inflate stores' prices

Michael Brandenburg puts a lot of faith in his employees.

Mr. Brandenburg, the owner of The Source Water Delivery, gives his employees keys to the business and company vehicles and money for customer transactions. He runs an inventory system based on honesty.

But that trust was tested in September when a delivery driver, 31-year-old Bartholomew E. Gunter, was accused of and eventually charged with stealing three water coolers that cost about $1,350, police said. He will go on trial in state court in April.

"(It) makes me frustrated and helpless," Mr. Brandenburg said.

According to the National Retail Security Survey, employee thefts cost retailers in the United States about $15 billion a year. Dr. Richard Hollinger, a sociology and criminology professor at the University of Florida, said the study he helped conduct does not track losses by regions, so how much it cost Augusta-area businesses is not known.

The Richmond County Sheriff's Office technical crime division investigates at least two cases of employee theft a month, according to Investigator Pat Stahler. In some cases, an offender may be arrested for thefts at different jobs, he said.

Some companies choose not to prosecute, and penalties for the thefts are not harsh.

"It's just not worth it," Dr. Hollinger said. "You're not going to get your money back.

"The cost to go through the prosecution is sometimes more than the cost of theft in the first place. They can get the same effect by firing the employee and sending them on to work for someone else."

Most employees arrested are charged with theft by taking, Investigator Stahler said.

"The sentence is very light," he said. "It's the type of crime that if you did get caught, you'd get probation most of the time, unless you have an extensive record."

The cost of employee theft is not just monetary.

The crimes can damage work relations when an owner discovers the people working for them are dishonest.

"It makes it more difficult to trust people, but you have to," Mr. Brandenburg said. "You have to put your neck on the chopping block and hope the ax doesn't fall."

Companies do have some recourse in deterring the thefts, but the cost of security is often passed along to the consumer.

For example, increasing in-store security with video surveillance comes with a heavy price tag that can be compensated by raising prices.

"These retailers aren't going to put in merchandise and security systems for free," Dr. Hollinger said. "(They) ... aren't going to be able to afford these countermeasures without compensation.

"Either put in security measures for lost merchandise, or lose merchandise. Lose merchandise, and lose business."

It's not uncommon for retailers to include the cost of preventive deterrents in their prices when a business is created.

"It's not like they have a problem and the (merchandise) goes up," he said. "In the larger picture of things they have to make profit."

A majority of retailers in Augusta have security cameras in their stores, but most aren't using them properly, Investigator Stahler said.

"They have cameras in the store, but they don't tape the registers," he said. "All of the transactions that are occurring, if the employee was doing something wrong, they don't have it (on tape)."

For example, police are investigating a theft at a local department store where employees allegedly helped a friend take several hundred dollars in merchandise, but the man paid for only one item, according to a report from the Richmond County Sheriff's Office.

There are other methods to prevent employee thefts such as verifying employment records and conducting a criminal background check.

Companies can acquire a background check for $5 from the sheriff's office. The process can be completed in 10 minutes, and the employer must have a signed waiver from the employee, record officials said.

"I arrested a girl one time for stealing ... (and) three months later I'm shopping at another store and there's the (same) girl ringing up my order," he said. "If that other store had bothered to run a check on her, it would have shown she had been arrested for theft by taking."

Security measures give a company a better chance of survival.

Employee theft, which accounted for more than 46 percent of retail losses last year, can ultimately cause a business to fail. Research from the U.S. Chamber of Commerce shows that 30 percent of all business failures in America are attributed to employee theft, Dr. Hollinger said.

Employee theft is especially hard on small businesses that cannot afford such losses.

"They're just not economically as large, so when they take a serious hit ... they're often not able to financially recover as easily as a large business would," Dr. Hollinger said.

Reach Albert Ross at (706) 823-3339 or albert.ross@augustachronicle.com.

Impact: Employee thefts nationwide cost businesses about $15 billion annually, and those costs are passed along to consumers.


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