Macy’s is a group of department stores based in America. The organization, founded in 1929, has a number of stores with one in New York City being recognized as the largest in the world since 1924. As with several other retail outlets, Macy’s department stores have experienced and are still under the threat of employee and customer theft. Employee theft has, in the past, contributed to the “shrinkage” of many retail chains (DeMasi, 2006). Similarly, the theft and pilferages at Marcy’s have impacted negatively on the company. In this case, appropriates security policies and measures are essential in guarding the goals of the organization.
The Impacts of theft
A study conducted in 1991 by the University of Florida relating to the retail industry revealed that employee theft was the main cause of retail chain shrinkage; or rather inventory loss (Bailey, 2006). Theft by both customers and employees is linked negatively to an organization’s performance in terms of profits and returns. For instance, loss of inventory may result in a retail store recording a negative return if the value of the stolen goods exceeds the net returns.
Although pilferage has a small effect on the company’s profits, accumulated loss through pilferage for a long time period is substantial enough to scare away investors and shareholders in a given organization (DeMasi, 2006). Worse is the fact that pilferage activities are difficult to be discovered and most of the time remain undiscovered due to their nature of occurrence (DeMasi, 2006). All in all, pilferage reduces the actual income results of a retail store, and in this case at Macy’s.
At Macy’s, theft has also been associated with the management and includes such activities as swindling, embezzlement, bribery, and skimming. In this case, the management of the retail store shifts their focus from the main objective, which is to make profits and concentrates on fulfilling the individual interests. Here, the retail chain suffers in many ways: one is the poor services to customers since funds are mismanaged and diverted. Consequently, a lack of efficient and proper services to the customers leads to their dissatisfaction. It is well known that customers are the building block of any business enterprise and losing them means losing business and profits (DeMasi, 2006).
Theft of ideas and information is another cause for alarm for the retails store. Macy’s department store has experienced a loss of employees due to various claims (Case, 2002). Of interest is that some of these employees utilize the store’s business ideas and strategy to initiate their own enterprises. The impact of this occurrence is very profound since these enterprises use the same strategies or modify these strategies, and becomes rivals to worry about.
Sometimes, these employees may use the ideas and information gathered from the retail store for sabotage purposes. For instance, these employees may engage in spreading messages of hate about the stores to its customers using the store’s real data.
Moreover, theft of ideas, trade secrets, and designs affects the retail store’s employees in that probable expansion is obstructed (Case, 2002)
Appropriate security policies and measures
In addressing employees theft at Macy’s appropriate security policies and measures are essential (Chen, 2006). One viable policy includes the use of refund schemes that are well spelled out and defined (Bailey, 2006). Another area that needs to be investigated is the needs of the employees, which study shows that they may be a cause of employees engaging in theft. And more importantly, the controls and policies should be enforced while management responsibilities are emphasized and monitored as well (Chen, 2006).
Reference
Bailey, A. A. 2006. Retail employee theft: a theory of planned behavior perspective. Volume 34. Issue 11. pg. 802 – 816. New York: Emerald Group Publishing Limited.
Case, J. 2002. Employee theft. Web.
Chen, C. X. 2006. Do Internal Management Controls Mitigate Employee Theft in Chain Organizations? University of Illinois at Urbana-Champaign, Department of Accountancy.
DeMasi, M. 2006. ‘Tis the season: Employee theft shrinks retailers’ holiday profits. Web.
Sandino, T. 2007. Employees theft. University of Southern California, Leventhal School of Accounting.