Does Shoplifting 'Hurt' Workers?

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There is a certain idea that pops up in the discourse every few months (at least for me it is only so often, perhaps for some it is more common) and it never fails to amaze me with the amount of cultural support for capital models it indicates. The idea to which I’m referring here, as indicated by the title, is that shoplifting from businesses hurts workers rather than the company. To do this more or less properly, let’s begin with a hypothesis: a single action of shoplifting from a corporation owned retail store has no direct effects on the wages and treatment of the employees at said retail store. We’re going to ignore the oddly common phrasing of “minimum wage workers” that is used where we’ve simply said “employees” as this is merely meant to conjure up the notion that the workers affected are those at the lowest rank within the corporate structure.

Given that this is a response to arguments that state that theft does have a negative impact on workers, it is likely best to approach this as with a proof by contradiction¹ wherein we assume that the opposite of our hypothesis is true and show that in order to prove it we would have to assume ideas are true that are actually false. There are two methods by which we could prove this: finances and punishment.

The rationale with respect to finances is that stealing from a company creates a loss that is taken directly from the worker’s wages or some hypothetical bonus pool that the worker would potentially earn if it is not used to cover said loss. In order for this to be true we have to assume that whatever company is in question here has no method of handling losses such that they do not affect the overall revenue of their business. That is to say that this company is either unaware of or deliberately avoiding any methods by which they could create a buffer between sales and profits. However, companies are motivated by the preservation of profits to employ any such methods of which they are aware, so we can logically conclude that they would not deliberately avoid these methods and can therefore assume that any company not employing such methods would be either unaware of the methods or due to various factors unable to implement them. Retaining focus on the former possibility here, we are confronted with the question of whether or not it is reasonable to assume that a company is unaware of potential methods of avoiding direct impact of losses on profits. We can once again assume that the preservation of profits incentivizes the company to seek out such methods, the only reason for the opposite here being that the company is either ignorant to the fact that theft is a possibility (or even a probability) or are aware of theft but do not see it as something that would cut into profits. The latter idea here runs contrary to the idea of theft affecting worker solely from a financial perspective and theoretically from a social perspective as well (if the company is not suffering from theft then there is no reason for employees to do so), but we will come back to it when discussing the concept of punishment as the allowance of theft even when there is no suffering lends itself to a greater cultural perception that theft is not an issue. The former, however, assumes that the company is not aware of theft as a potential problem and therefore reacts to its occurrence as it happens. We may concede at this point that there are potentially some companies that are oblivious to the possibility of theft and may act in this way, but if we are to consider any given act of theft it is likely not the first act of theft to occur at whichever company it happens to be against. If, after subsequent occurrences, a company is still unaware of this possibility, then functionally speaking this is no different then when a company determines that theft is not an issue as they are in this situation unaware of the issue. However, if we are to maintain that the sort of theft we are concerned about here is that against “big business”, i.e. corporations, then we can reasonably assume that they are fully aware that theft is something that will likely occur within their stores.

A reason for why we may confidently state that corporations will virtually always be aware of theft is the existence of what is called “Loss Prevention.” Loss Prevention is a concept that exists to encompass the whole of how companies can handle losses, be it external theft (shoplifting), internal theft, or operational errors. The existence of this is indicative of company’s knowing about theft as it is a standard facet of business administration. Acknowledging it also allows us to return to the previously unfinished point that companies may choose to not follow through on methods of buffering loss from profit due to incapability. Typical loss prevention methodology dictate there exist staff whose exclusive role is ensuring that shoplifting is prevented, this staff is a security force who, depending on applicable laws, will observe customers and detain them if there is reason to believe they unlawfully moved merchandise past a point of sale. Because this is a separate staff, there must be some budgeting to cover their wages², that is to say that the company must spend money to ensure that they do not lose money to external theft. This becomes a good indicator of an idea we ought to consider in a broader sense: companies must budget under the assumption that theft exists. It’s important to be specific that they are budgeting in such a manner because by acknowledging that they must budget we can also point to the fact that budgeting is entirely based on projected revenue rather than actual. Both wages and loss prevention measures are determined before the actual work takes place at the beginning of some defined budget period.

It is at this point that we would benefit from putting ourselves in the shoes of this corporation as it is creating this budget. We have predicted expenses for wages based on our current workforce (perhaps including some projected increases for raises as well as any new employees hired on during the period) for both the sales staff and the loss prevention staff. It is common practice, based on this budget to predetermine the hours that will be made available to workers, taking in account the reviews of each worker as well as their hourly wages. However, we know that there is statistically likely to be some amount of merchandise lost to what is called “shrink” (the internal/external theft and operational errors we had mentioned earlier). The loss prevention staff is intended to reduce this shrink as much as possible, but that possibility is heavily dependent on how much we budget towards them. This is due to their ability to prevent loss being typically correlated to the amount of training they receive (which costs money) as well as the amount of staff we can have at any given time. If we reduce this loss prevention staff’s budget we can therefore expect more shrink, but if we raise their budget we will expect less shrink. This is then an optimization problem, how much do we spend on the staff versus how much do we expect as shrink during this budget period. Because we are including this predicted loss in this manner, it is more aptly described as an expense included in the budget than as a loss of profit. That is to say that we do not count shrink as a loss in profits up to a given point. Furthermore, because the aforementioned point is reliant on the company’s analysis used in optimizing the budget between loss prevention and shrinkage, the company necessarily must ensure that the projected shrink is as accurate as possible. Assuming that the methods used to predict this are indeed accurate, any given act of shoplifting must then be predicted at the beginning of the budgeting period. In essence, a single act of shoplifting within a corporate store, assuming that corporation employs some manner of loss prevention, would be already accounted for in the same budget that set forth the amount of wages to be paid out to workers within that budget period.

Now, of course, we can ask questions along the line of: “if shrink is accounted for to begin with, why do managers still yell at employees for allowing shoplifting to happen?” In a sense, this calls back to the optimization problem we had previously discussed. While there is staff that specializes in loss prevention and is paid accordingly (often more than the sales staff), it would be beneficial for the company to distribute the duties of loss prevention to other staff members that are paid less (such as the sales staff) so as to increase the amount of workers on shift at any given time that are capable of preventing shoplifting. This would entail training workers that are not necessarily loss prevention staff; however, if these workers are fully trained to carry out loss prevention duties, then what reason would they have to keep their current position as opposed to move to a position (at the same company or elsewhere) within the higher paying loss prevention staff? This then becomes a matter of determining how to ensure an employee acts in an intended way without training them to act in that specific manner. The general answer to which leads us into the second of the two methods by which I said the hypothesis could be proved: punishment.

Whereas while discussing financial motivations we can easily rely on concepts such as incentivization, social motivations are slightly more abstract and thus more complex. As previously mentioned, a company may seek to have sales staff work as loss prevention. These sales staff workers cannot fully act as loss prevention as they are neither trained nor specialized in that work, and so they can only observe and report any suspected shoplifting. As this goes beyond the standard expectation of sales staff there is need to incentivize such workers to actually take on the work. However, to reward workers for catching shoplifters would contradict the point of using said workers as it would be investing more of the budget into loss prevention, as well as creating an incentive for false flags or something of that effect. To that end, it is more sensible from the perspective of the company to punish failure to act in the case of shoplifting. Typically, there is some legal protections in place that would keep a company from being able to dock wages or fire workers for failing to fulfill a duty well outside the expectations of a retail worker, i.e. stopping someone from stealing (which is typically considered too dangerous for workers to do regardless), and so the company will need to either settle for reprimanding the worker in question or invent some other means by which to essentially scare workers into stopping theft. Sometimes this latter idea comes in the form of a mythical bonus that is to be paid out to workers at the end of the budget period, but any losses due to theft (either external or internal can be done with this) would be subtracted from the pool from which the bonus would be paid. The company, as previously discussed, is already aware of the approximate figure they will lose to shrink, and so can easily promise the money attributed to covering that loss without fear of actually having to pay it out.

Of course, these methods of punishing employees for theft, whether there is any actual theft or not, have the further effect of creating a culture among the workers that is motivated to attempt to reduce shoplifting. Such a culture is extremely beneficial as it would weed out any uncertain potential shoplifters, typically by way of these workers shaming people for shoplifting based on the punishments created by the company. The issue then becomes that this culture is heavily reliant on the myth that shoplifting has negative effects on these workers, but if they were to realize that this is, in fact, a myth, then the cultural notion that shoplifting hurts the low-level employees would eventually fade. Without that notion then there would be a potential increase in external or even internal theft (I would go out on a limb here to say it would be the ladder mostly), which would force companies to attribute higher portions of their budget to loss prevention and projected shrink.