The Thieving Touch

Rachel Zoe and then-assistant Taylor Jacobson.

Image: Bravotv.com

Celebrity stylist Rachel Zoe never expected that her most trusted associate Taylor Jacobson would steal from her company. But when dress and shoe samples started disappearing and the books didn’t add up, it was obvious to Zoe’s husband and new business partner Rodger that he’d better investigate. And he first looked internally.

Employee theft is a reality that hits businesses small, medium, and large. In the retail world, internal theft (or shrinkage) accounts for approximately 64 percent of loss. But it’s a phenomenon that is industry blind and can comprise cheating on time sheets to pocketing office supplies for personal use and stealing proprietary information.

As Zoe learned on the season premiere of her Bravo show The Rachel Zoe Project, much of the problem comes from disgruntled employees who are unsatisfied at work. Jacobson, frustrated at having spent four years with the company without any real upward movement, may have felt entitled to the gowns and designer shoes because she wasn’t getting the professional recognition she thought she deserved. So as a way to get back at her boss, she started liberally “borrowing” items and not returning them. Zoe couldn’t comprehend how the person she trusted most, allegedly betrayed her. But loss prevention experts say that theft happens when employees have motive and access.

Usually small signs can give away the start of a problem. Changes in behavior such as employees going into back rooms, storage areas, or spending excess time on the computer poking around in files are one tip that all may not be on the up-and-up. And as clichéd as it sounds, shifty eyes can give away a guilty conscience. Thieving employees who are unlucky enough to be caught on camera often look up and around to spot any potential threats.

Once an employee is suspected, handle the investigation with professionalism and discretion. One sure way to get sued is to let co-workers or other employees in on the suspicion without having any evidence. Companies that can afford them should coordinate with their security or loss prevention department. Those who are small may have a harder time ferreting out the information, but there’s plenty they can do on their own.

1. Keep track of what’s missing.
2. Keep track of who has access to the items, information, or passwords.
3. If possible, reset passwords in faster intervals and keep logs on who tries to gain access to rooms or files.
4. Track not only the suspected employee’s actions but also those of others in the department. You may uncover an operation that takes more than one person to run.
5. Once you’ve compiled evidence, run it by a legal source to make sure your accusations—and your approach—are as suit-proof as possible.
6. Confront the employee with an open mind. There could always be an explanation or someone else you need to worry about.
7. If the employee confesses, it’s best to cut ties. Depending on the offense, either get the police involved, report the employee to professional organizations, or choose to end the relationship and move on.
8. When telling the company about an employee’s departure, discretion is best. Say the person is no longer with the company and address one-on-one questions on an as-needed basis. If you decide not to prosecute (and even if you do), it’s best not to share the suspicions with anyone who doesn’t need to know.

At the end of the day, when an employee steals it can feel like a personal affront. Zoe was so shaken by the news that she had to have Rodger tell the rest of her employees because she was “too emotional about it.” And in some ways, the buck does stop with her. While she didn’t mean to make herself a victim, deterring fraud happens with selecting the right employee in the first place.

Whenever possible employers should perform background checks on perspective workers—especially those who will have access to credit card accounts, cash, and merchandise. Ask for their consent to run a credit check, check their references, run a criminal background check and verify their education, suggests Joseph T. Wells, CFE, CPA, Association of Certified Fraud Examiners.

To best protect your business, run periodic and unscheduled audits. They’re the best way to identify a problem. And finally, encourage an open-door, no-retaliation policy. Employees who are invested emotionally in the success of a business won’t tolerate others who try to sabotage it.