Keven Moore on Insurance: To catch a thief is good, preventing and protecting is even better

I started in the insurance industry as a plain-clothed loss-prevention rep patrolling Gold Circle and McAplins aisle-ways, hiding behind clothing racks and, end-caps, perched in a bird-nest with two-way glass, or monitoring overhead cameras looking for thieves. In those days I was pursuing everything but a career, attending college, chasing my soon-to-be wife and working part-time at UPS chucking 1000-plus boxes an hour in the wee hours of the night.

Getting paid to catch shoplifters was the most interesting and enjoyable job I had ever worked and was nothing more than a big game of “hide and seek” where the stakes were a lot higher for the losers. I realize now that I worked with a great group of men and women who were all ambitious, motivated and loyal to one another. Those traits carried over, as many went on to have distinguished law enforcement careers, working as SWAT members, narcotics detectives and upper management of several of police departments in Central Kentucky. Others went on to other law enforcement careers as State Troopers, FBI Agents, DEA Agents, and one is even currently the president of the Lexington Fraternal Order of Police.

Some remained in the retail industries, climbing their way to upper management of some of the largest retailers in America. But then others have gone on to be accountants, real estate agents, insurance consultants, security consultants, owners of construction companies and one even owns and operates a successful property management firm in Myrtle Beach, South Carolina. Over time I have tried to remain in contact with most. With one ex-coworker we were each other’s best man in our weddings.

Back in the day, we all enjoyed the thrill and the art of catching a thief, but we also loved the adrenaline rush just before making a stop, as you just never knew what to expect. It took talent to assess one’s character and intent from a camera room or while pretending to be a nearby shopper. You have to be right 100% of the time, or stand the risk of subjecting your employer to potential liability lawsuits. It helped that we could reach just about every corner in a store from above, using tiny pin-hole cameras that could pan, tilt and zoom down to read a person’s driver’s license at a cash register even back in the late 80’s and early 90’s. I can’t imagine the technology available 20 years later.

We caught thieves from just about all walks-of-life — from all ages, social and economic status and professions. Many were just housewives, some were professional thieves working in rings, many were trying to feeding addictions, while others were impulsive thrill-seekers or were dealing with internal demons. I caught the very elderly to teenagers, wives of high ranking business executives, business owners, elected officials, standout collegiate football players, ministers, …etc. I just recently realized that I had once sent to jail the father of one of my son’s high school friends.

Some employees and shoplifters we’d patiently wait months to catch because they were just that good, but they eventually would slip up as we learned a little more from them on each greedy return visit. We caught people carrying guns, thousands of dollars in cash, and even multiple I.D.’s.

Many reacted in different ways when we made an apprehension, but most would immediately confess. Few would try to flee or fight their way, though as my high school wrestling days came in handy. I did break a couple of ribs in a scuffle at Turfland Mall once.

My desire to pursue this line of work changed one day back in 1994 working for Regional Department Store down in Arlington, Texas. I had received a panic call from one of my reps just after shots from a semi-automatic 9MM were fired above his head as he tried to stop local gang members after a snatch. As a new father who was beginning to hate the grind of retail, that incident made me realize that—as one who hated to let anybody get away — I would have probably been shot if I had been working..

I began to think about my options for a career change, and with my Masters in Loss Prevention and Safety from EKU, I was offered a position as incorporate safety management back in the St. Louis area. I later moved over to the insurance world and have worked as an insurance loss control consultant ever since.
I now look at theft prevention from a different vantage point, but I still work with a variety of different industries concerned about loss.

There are several steps I suggest to business owners and management, but the first is to make sure you have adequate insurance coverage. Many business owners and companies buy lower limits because they don’t want to admit to weaknesses in their controls. When limits go up, so do the deductibles, and since many in the decision-making chain have never experienced a hearty purchasing scam, nonworking payroll scam, kiting, or small- to medium-sized theft loss, they are not likely to see the value of adding catastrophe limits.

In today’s electronic world, it is much easier for someone to suffer a security breach that can cause losses in the millions. Buying adequate limits is relatively inexpensive, but you should have your insurance agent review your risks against crime policy terms and conditions to make sure your coverage meets your needs.

The second best advice I give to our clients is to look inwardly first, as it has been estimated that your employees are 15 times more likely to steal from you than your customers. Depending on your industry, employee theft accounts upwardly in the amounts of 40-70% of your total shrinkage, with the rest coming from administrative errors, vendor fraud and customers. The Insurance Institute of America indicates that 65% to 75% of all merchandise loses come from employee theft. A more sobering workplace theft statistic is that it’s been estimated by the Small Business Association that as high as 25% of all bankruptcies is the direct result of employee theft.

The largest theft losses I ever investigated came from trusted employees. Some of those thefts reached beyond six figures, but the indirect cost and time to investigation and quantify those thefts were even more staggering and can take its toll on business owners and staff. After talking with one of our clients in Northern Kentucky who experienced a large internal loss mostly covered under their insurance policy, he stated that it was the most excruciating time-consuming experience he had ever experienced.

As a business owner or manager, you would like to be able to just hang the “Ten Commandments” in the break room as your one and only loss control countermeasure. But when dealing with your employees always remember, as the great cowboy poet Ronald Reagan once said, “Trust But Verify” and remove the opportunities for your employees to stray.

For more information on how to prevent employee theft and embezzlement visit www.roedinginsurance.com

Keven Moore is director of Risk Management Services for Roeding Insurance (www.roedinginsurance.com). He has a bachelor’s degree from University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He lives in Lexington with his family and works out of both the Lexington and Northern Kentucky offices. Keven can be reached at kmoore@roeding.com.