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The Robin Hood Dilemma of Retail

Recently, a Home Depot employee was arrested for allowing customers to take merchandise free of charge, totaling over $1,900. According to the employee, she did it to help others, a trend that is rising on the forefront. While employee theft isn’t a new phenomenon, what is unique is the time we live in—the coronavirus era.

We have abruptly shifted to a new world where many are in need (at the time of this writing, 40 million Americans were unemployed), uncertainty runs high, and beliefs of what is right—or wrong—are challenged daily. Is it okay to steal from the rich (store owners and big companies) to give something back to the poor (customers in need)? That is the conundrum facing the retail industry—“The Robin Hood Dilemma.”

Robin Hood Revisited

The Robin Hood story dates back nearly 800 years, telling the story of the good man and social bandit, Robin Hood. Hollywood movies depict Robin and his band of Merry Men stealing from an evil, rich nobleman and then redistributing the money to the poor. In these glamorized versions, Robin is clearly a good and lovable leader, striking out to fight wrongdoing.

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In today’s world, we’re seeing everyday “Robin Hoods” in the actions of trusted retail employees. The same people who work overtime, through the snow and rain, and during a global pandemic to serve retail customers are becoming “social bandits” like Robin Hood. We are seeing signs that many of these essential and dedicated employees are taking sides in situations they feel are more moral than practical.

From a place of compassion and good intent, long tenured employees are giving away products or providing discounts to people they perceive as being in need. Their actions are driven from good intentions and a desire to help others. It may manifest in the form of not ringing up higher-cost meat products or applying unauthorized discounts for those they deem worthy or in need. They perceive that the retailer is “wealthy enough” not to be impacted by their kind gesture. After all, if a trusted employee helps a customer, won’t that make both parties more loyal to the brand? Isn’t altruism a value that has long-term benefit for employees and customers, and ultimately the bottom line?

The Robin Hood Impulse

James Fowler, a political scientist at University of California at San Diego tested if there were such a thing as a “Robin Hood Impulse”. He tested 120 participants to determine if they were inclined to take from the rich to give to the poor, finding that humans’ “taste for equality” is a driving reason why we cooperate with one another. In his money experiment, he discovered that over 70% of participants at some point would take from the richest players and donate to the poorest players, in an attempt to equalize the income among all participants. Fowler’s team said that even players whose own money had been lost in previous rounds of play were willing to redistribute the money in an egalitarian manner.

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At Agilence, we have seen the Robin Hood Impulse at work. One example that jumps out is Rack Room Shoes where they saw “Robin Hood” appearing in the form of unusual shrink activity. Using their data analytics platform, the loss prevention leaders at Rack Room discovered that employees were giving out military discounts to customers not associated with the military in order to be helpful—to deliver a great shopping experience. But unfortunately, this well-intentioned generosity across multiple stores had a significant impact on the bottom-line, jeopardizing the program and its benefits for military personnel. After this discovery, Rack Room’s LP and operations teams took steps to retrain employees and update their systems to ensure military discounts were only used appropriately in the future.

internal theft chart
In 1 hour, a Robin Hood employee can generate a massive amount of shrink vs. more traditional forms of theft/fraud.

Another Agilence customer saw numerous associates applying their employee discounts to multiple customers. One associate in particular used their employee discount over 1,200 times a month, amounting to nearly 5 percent of the brands total discounts, totaling almost $2,500 in lost profit. To put this type of behavior in perspective, at 3 percent margin, the store would need to do almost $83,000 in sales to make up for this one associate’s employee discount abuse.

Shrink was recently documented in Los Angeles shortly after the breakout of COVID-19. Dr. Read Hayes at the Loss Prevention Research Council contributed to a CAP Index study that found that overall shrink increased during the current crisis. The study discovered reports of Instacart personnel stealing customer’s groceries and anecdotal reports of rising internal theft. Dr. Hayes said the “Routine Activity Theory” addresses this behavior. As the pool of likely offenders increases, as do suitable targets, along with lax guardianship, the result is increased shrink. In short, there is greater motive and opportunity, so losses increase.

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What’s the Answer?

Trusted employees act in an unusual manner because they find themselves in unusual times. Can retailers help employees understand and prevent their Robin Hood Impulses?

One loss prevention expert compared COVID-19 to his experience on emergency response teams during a year with five hurricanes. How did he help keep his staff together, especially when they didn’t show up for work? “We had teams in the field specifically for this purpose, with water in our trucks, spare gas if they needed it, and most importantly, we brought with us a genuine desire to help them get back some semblance of normal life. We wanted them to know that they were not alone and that their company was there to support them.”

Employees may be feeling alone out there on the front lines. It is a new era and the rules have yet to be defined. They have job insecurities, fear for their personal and family’s health, and a host of other safety concerns. Loss prevention leaders can help employees feel like part of a team so they don’t act as a rogue agent with customers. Provide them with the guardianship and leadership they need during these difficult times, so they don’t feel the need to take steps to cushion those customers who reflect their own fears. It’s important that LP leaders assuage the employee’s good intentions and desire to help by sharing what the company is already doing to help the community. And if at a corporate level, you haven’t yet started to roll-out new community-facing initiatives, you can use these Robin Hood incidents as potential conversation fuel to pass along to your community outreach and communications teams.

Are there ways you can connect with your customers and help them without giving away the store or draining the bottom line? Show your employees that you care for them and regroup to create a team atmosphere. Remind employees about rewards, loyalty programs, and other ways they can help customers. Communicate what your employees can do on behalf of the company for your customers so they don’t resort to unethical acts and encourage team and individual volunteerism as a means to give back in a healthy and meaningful way.

We must all remember that COVID-19 has taken a toll on everyone’s mental health. In a recent poll, over 45 percent of Americans say they have experienced a mental health impact as a result of COVID-19. If you have medical or mental health employee benefits, publicize their availability. Devise ways to support your team at all levels of the company.

Make the Robin Hood Impulse Work for You

People want to help people. That’s the basis of both the Robin Hood Impulse and the resulting dilemma. We want things to be fair, which can be difficult to define in the new world we live in. We are quickly learning what next steps to take as the country reopens to a new reality, but the path forward isn’t entirely clear.

New procedures and protocols will be put into place to help reduce shrink, serve customers, and preserve the bottom line. Data analytics will help reveal gaps and opportunities for corrections. Communicating and training employees what they should do in this new environment will help alleviate the tendency to make up the rules for themselves.

Finding a way to harness employee loyalty and creativity will help them and your company grow. Stay close to them, let them know they have support and that they are part of a team. Let them know they don’t have to be a bandit but can be an advocate for your company and, ultimately, your customers.

About the Author

Catherine Penizotto
Catherine Penizotto

Catherine Penizotto brings over 30 years of retail and loss prevention experience to Agilence. As vice president of customer success, she is responsible for all aspects of client onboarding, application and technical support services, as well as cultivation of client relationships and planning of Agilence community events. Prior to joining Agilence, she established OPTIC Loss Prevention, a consulting firm focused on helping retail businesses protect their bottom line. Previously, she served as north east regional director of LP for Sears Holdings and held the position of director of asset protection and data integrity at Penn Traffic before that. Penizotto has served many years as a volunteer for the Loss Prevention Foundation.

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