A first-of-its-kind study on “sweethearting”–a form of employee theft when the employee gives away products or services for free or at a discount–claims traditional mitigation strategies used by loss prevention professionals often don’t work. The study’s authors approached sweethearting from a marketing perspective, aiming to expose the “dark side” of the practice that hadn’t been previously studied. Employee theft and fraud costs U.S. companies $600 billion each year and it is believed sweethearting is responsible for 35% of companies’ annual profit losses in the retail sector. Sweethearting differs from the traditional definition of employee theft in that the thieving employee takes all the risks and breaks the law without any direct gain. The indirect benefits come in the form of increased tips, increased social status, and “tit-for-tat” agreements. The study found that without taking the motivations behind sweethearting into account, currently used techniques such as register tracking systems and video surveillance, would not serve as deterrents. Two suggested strategies for combating sweethearting include: making sure employee training includes an ethics component, and pre-employment screening for the following three personality traits: personal ethics, need for social approval and general risk taking.
