One of the most commonly held principles of shrinkage reduction, especially for shoplifting deterrence, is achieved by giving good customer service. This idea is predicated upon the assumption that if potential thieves enter the store, they will be deterred from stealing if sales associates quickly make contact with them by offering immediate customer service. The thief will then know that they have been recognized by staff, and their behavior is now being observed in person or by camera. The hope is that if they have criminal intentions, they will soon leave the store and decide not to steal because the LP and sales employees have recognized their presence.
In short, the “good customer service” dictum sends an indirect message that “we know you are here.” Moreover, if the thief has a desire to steal from the establishment, there is a significant likelihood that they might not get away with the theft while sales associates and LP staff are watching.
One of the first things that a retail sales associate is taught on their first day on the job is to promptly approach all customers as they enter the store and welcome them by offering a verbal greeting and excellent service. A recent article published in a marketing journal, however, raises the possibility that customer service can be so good that it actually encourages crime. The argument suggested is, if the relationship between the sales associate and the customer is pre-existing or becomes too strong, it is possible that this close personal relationship could eventually lead to sweethearting.
These marketing scholars who are joining hands with both psychologists and criminologists have empirically examined for the first time the nature of the employee-customer dyad relationship in order to determine what might be the antecedents and consequences of providing such good service and satisfaction that customers are getting the product for free.
The research article that I am referring to is entitled “Service Sweethearting: Its Antecedents and Customer Consequences” by Michael K. Brady, Clay M. Voorhees, and Michael J. Brusco in the March 2012 issue of the Journal of Marketing. Following is the abstract from the article:
Sweethearting is an illicit behavior that costs firms billions of dollars annually in lost revenues. Sweethearting occurs when frontline workers give unauthorized free or discounted goods and services to customer conspirators. The authors gathered dyadic data from 171 service employees and 610 of their customers. They then compared questionnaire responses to relevant items that determined the relationship between the customers and staff plus their attitudes toward the store. The results from the employee data reveal that a variety of job, social, and remuneration factors motivate sweethearting behavior and several measurable employee traits suppress its frequency. The results from the customer data indicate that although sweethearting inflates a firm’s satisfaction, loyalty, and positive word-of-mouth scores by as much as 9%, satisfaction with the confederate employee fully mediates these effects. Thus, any benefits for customer satisfaction or loyalty initiatives are tied to a frontline worker that the firm would rather not employ. Marketing managers can use this study to recognize job applicants or company settings that are particularly prone to sweethearting and as the basis for mitigating a positive bias in key customer metrics.
Without getting too deep into the details of the study, it is clear that the hypotheses that the researchers examined were based upon the existing literature on employee theft and workplace deviance, some of which was mine. To summarize, they found that “results indicated that sweethearts had significantly more favorable assessments of and intentions toward both the employees and the firm.” In other words, those customers who have developed sweethearting relationships with your employees who really liked coming to your stores to get free or discounted merchandise.
The results suggest that not accounting for sweethearting in the customer experience could significantly inflate customer satisfaction scores, loyalty levels, and positive word-of-mouth opinions. In other words, this study suggests that one of the principal reasons why customers like coming—and returning—to your stores to “shop” may involve the substantial discounts that they are receiving from your dishonest employees.
Screening for Sweethearting Characteristics
We all recognize that positive customer-employee relationships are known to increase customer satisfaction and stimulate positive word-of-mouth opinions about retail stores, hopefully increasing sales. However, until I read this paper I had not seriously considered that some liked shopping in our stores because a small number of our employees were regularly “hooking up” customers with merchandise and discounts that were directly inflating the levels of shrinkage and, thus, reducing the profitability of the firm.
As the authors of this article put it, “In a worst-case scenario, managers might reward the very employees responsible for up to 35 percent of the profit losses.” The authors further suggested that perhaps we need to redouble our efforts to “identify the trait profile of the ideal frontline worker.”
Pre-employment screening tests can head off sweethearting if we add measures that look for high scores on “personal ethics” and, alternatively, low scores on the “need social approval from others.” Minimizing the frequency of sweethearting should also be enhanced by avoiding applicants at the very high end of the risk-seeking scale.
This revealing and counterintuitive research study on sweethearting is especially important during the holiday season. We all know that some employees work at our stores during the holiday season for the primary reason to steal products for themselves or to give away products to their friends and family. Better preventative screening steps such as these might provide an effective buffer that “circumvents the need to implement oppressive security measures that alienate all front-line workers.”
This article was originally published in 2014 and was updated March 6, 2017.