To Catch a Thief

Thieves in Your Midst

It’s hard to find exact figures on crimes against businesses, but it’s clear that the problem packs an economic wallop. According to the Center for Problem-Oriented Policing, a think tank on policing issues based in Madison, Wisconsin, crimes against businesses cost the U.S. economy at least $186 billion annually. A typical U.S. business loses 6 percent of its yearly revenue to fraud. Consumers suffer as a result; goods and services are typically priced about 15 percent higher than they would be otherwise to make up the losses firms suffer from crime.

Some of those losses come with violent crime, a particularly scary prospect for business owners. Businesses such as convenience stores, gas stations, and other places where a cash register figures prominently are more vulnerable to armed robbery or other violence.

However, though theft is the biggest crime problem most companies face, employees commit most of these thefts. “Armed robbery is certainly a possibility, but the vast majority of exposures a business faces are internal,” says Cary Meiners, second vice president for Travelers Corporation, an insurance company based in St. Paul. “Seventy to 80 percent of all theft is committed by employees, regardless of business type.”

Those thefts take a variety of forms. In retail settings, employees steal the company’s product. Or they buy it, but at steep, self-determined discounts. Still other workers skim the till at restaurants, bars, street vendor stalls, or other cash-based businesses. Retailers must also endure shoplifters, of course.

Company property of all types is vulnerable. Computer chips, scrap metal, equipment, and even organic material such as dirt are all stolen and resold. “We write policies for a lot of contractors, and theft of construction equipment from job sites or from a yard is probably the most common problem,” says Mary Manley, senior vice president of corporate affairs and administration at Edina-based Western National Mutual Insurance Comp-any. Manufacturing companies, rail yards, landscaping companies, auto dealerships and mechanics—any firm with resalable goods or supplies—are at risk.

Some workers leave their employer’s property alone, only to be tempted by inventory or supplies when they’re working for a client. Information is a salable commodity, too. Employees steal customer data from their own or a client’s firm, using that information to commit credit-card fraud. Workers can also use their knowledge of a firm’s computer systems to hack into financial accounts and transfer funds, says Jim Johnson, vice president of sales and marketing at RJF Agencies, Inc., a Plymouth-based business insurance company. “The information on your laptop could be invaluable,” he says.