Chances are you don't associate the prices at your favorite stores with theft. However, higher prices have become a survival tactic for retailers, who lose between $21,000 and $28,000 per minute to shoplifters and dishonest employees, according to Jack L. Hayes International. One out of 40 retail employees stole at work in 2012, a near 6-percent increase from 2011. Background checks help retailers identify trustworthy job applicants and reduce the risk of internal theft.
Pre- and Post-Employment
According to a 2011 National Retail Federation (NRF) Survey, more than 95 percent of retailers conduct background checks before and after making a job offer, although the timing depends on the position. For example, the hiring process for loss prevention, executive and corporate positions commonly includes pre-employment background checks. Sales associate, distribution center and store manager positions get post-offer scrutiny. The extent of these investigations depends on the position's access to merchandise and money as well as direct contact with the general public.
Retailers must have a background check policy based on job-specific reasons that Title VII of the Civil Rights Act of 1964 calls "consistent with business necessity." In a "Chain Store Age" article, William Hauswirth of Intellicorp, a risk management services provider, suggests retailers tailor their background screening activity to each job. Cashier and sales associate positions merit work history and education verification, criminal history and a Social Security number trace, according to Hauswirth. He proposes adding a credit report to that list for store management and financial positions.
The 2012 guidelines issued by the Equal Employment Opportunity Commission instruct employers to analyze hiring decisions that involve criminal history on an individual basis, noting they can no longer assume that committing a past crime is indicative of future behavior. For criminal history checks, the most popular type of background check, this means that only offenses identified in advance as relevant to a position's responsibilities should be considered -- not all violations. Factors that law firm J.D. Supra advises retailers use to determine those offenses include the seriousness of the offense, damage caused and how long ago the crime took place.
Background checks weigh into retail hiring decisions for reasons other than theft prevention. Retailers have a legal obligation to ensure that those they hire contribute to a safe environment for all employees and customers. At the same time, that legal obligation includes compliance with anti-discrimination laws and state statutes. The NRF reported that retailers tend to review their background check policy every three years or in light of new legislation.
- Jack L. Hayes International: Annual Retail Theft Survey
- Chain Store Age: The Power of Background Checks in Retail
- National Retail Federation: 2011 Background Screening Protecting Retailers and Consumers
- NOAA: Office of the Chief Administrative Officer; Title VII of the Civil Rights Act of 1964
- JD Supra: Retail Industry Update - June 2012: Using Conviction Records As A Screening Tool
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